[Senate Hearing 105-697]
[From the U.S. Government Publishing Office]



 
49-519 cc

1998

                                                        S. Hrg. 105-697

                WATER RESOURCES DEVELOPMENT ACT OF 1998

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 23, 1998

                               __________

  Printed for the use of the Committee on Environment and Public Works


_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington DC 
                                 20402
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED FIFTH CONGRESS

                 JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire          DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho               FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma            HARRY REID, Nevada
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas             BARBARA BOXER, California
WAYNE ALLARD, Colorado               RON WYDEN, Oregon
JEFF SESSIONS, Alabama
                     Jimmie Powell, Staff Director
               J. Thomas Sliter, Minority Staff Director
                                 ------                                

           Subcommittee on Transportation and Infrastructure

                   JOHN W. WARNER, Virginia, Chairman

ROBERT SMITH, New Hampshire          MAX BAUCUS, Montana
DIRK KEMPTHORNE, Idaho               DANIEL PATRICK MOYNIHAN, New York
CHRISTOPHER S. BOND, Missouri        HARRY REID, Nevada
JAMES M. INHOFE, Oklahoma            BOB GRAHAM, Florida
CRAIG THOMAS, Wyoming                BARBARA BOXER, California

                                  (ii)

  

 
                            C O N T E N T S

                              ----------                              
                                                                   Page

                           OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana.........     5
Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................     4
Boxer, Hon. Barbara, U.S. Senator from the State of California...    10
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island     3
Graham, Hon. Bob, U.S. Senator from the State of Florida.........     7
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     3
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................     6
Reid, Hon. Harry, U.S. Senator from the State of Nevada..........     6
Warner, Hon. John W., U.S. Senator from the Commonwealth of 
  Virginia.......................................................     1
Wyden, Hon. Ron, U.S. Senator from the State of Oregon...........    11

                               WITNESSES

Faber, Scott C., director of floodplain programs, American Rivers    35
    Prepared statement...........................................    91
    Responses to additional questions from:
        Senator Baucus...........................................    98
        Senator Chafee...........................................    94
Fugate, Grover, executive director, Rhode Island Coastal 
  Resources Committee Management Council.........................    40
    Prepared statement...........................................   103
    Responses to additional questions from Senator Chafee........   105
Higgins, Stephen H., beach erosion administrator, Broward County 
  Department of Natural Resource Protection......................    42
    Prepared statement...........................................   108
Koeper, John, executive director, Metropolitan St. Louis Sewer 
  District.......................................................   120
Nagle, Kurt J., president, American Association of Port 
  Authorities....................................................    29
    Prepared statement...........................................    77
    Responses to additional questions from:
        Senator Chafee...........................................    85
        Senator Reid.............................................    87
    White paper, Federally-funded Maintenance Dredging...........    31
Pringle, Kenneth E., mayor, Borough of Belmar, NJ................    37
    Prepared statement...........................................   106
Strayhorn, Louisa M., city councilwoman, Virginia Beach, VA......    46
    Prepared statement...........................................   114
Westphal, Hon. Joseph W., Assistant Secretary for Civil Works, 
  Department of the Army.........................................    12
    Prepared statement...........................................    60
    Responses to additional questions from:
        Senator Baucus...........................................    71
        Senator Boxer............................................    75
        Senator Chafee...........................................    69
        Senator Graham...........................................    75
        Senator Levin............................................    73
        Senator Reid.............................................    73

              ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Articles:
    Vision Statement of the Third Upper Mississippi River Summit, 
      Mississippi Monitor........................................    99
    For A Flood-Weary Valley, A Vote to Let the River Run Wild...   101
Letters:
    Executive Office of the President............................   127
    Henriksen, Terrance D., mayor, City of Grafton, ND, letter 
      and resolution.............................................    55
    Lew, Jacob J., acting director, Office of Management and 
      Budget.....................................................    56
    Metropolitan St. Louis Sewer District........................   117
    Minnesota-Wisconsin Boundary Area Commission.................   141
Statements:
    Beyke, John C., on behalf of the National Association of 
      Flood and Stormwater Management Agencies...................   143
    Conrad, Hon. Kent, U.S. Senator from the State of North 
      Dakota.....................................................    53
    Dean, Henry, chairman, Interstate Council on Water Policy....   117
    Doolittle, Hon. John T., a Representative in Congress from 
      the State of California....................................    56
    Dorgan, Hon. Byron, U.S. Senator from the State of North 
      Dakota.....................................................    52
    Herger, Hon. Wally, U.S. Representative from the State of 
      California.................................................    59
    McGuiness, Dan, director, Upper Mississippi River Campaign, 
      National Audubon Society...................................   137
    Metropolitan St. Louis Sewer District........................    13
    Minnesota-Wisconsin Boundary Area Commission.................   142
    Murphy, Charles W., chairman, Standing Rock Sioux Tribe......   139
    National Audubon Society.....................................   137
    Owens, Pat, mayor, Grand Forks, ND...........................    54
    Red River Valley Association.................................   148
    Sacramento Area Flood Control Agency.........................   120
    Stark, Fred M., mayor, City of Grafton, ND...................    52
    Standing Rock Sioux Tribe....................................   139

                                  (iv)

  

 
                    WATER RESOURCES DEVELOPMENT ACT 
                                OF 1998

                              ----------                              


                         TUESDAY, JUNE 23, 1998

                               U.S. Senate,
         Committee on Environment and Public Works,
         Subcommittee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:35 a.m. in 
room 406, Senate Dirksen Building, Hon. John W. Warner 
(chairman of the subcommittee) presiding.
    Present: Senators Warner, Kempthorne, Inhofe, Bond, Baucus, 
Reid, Graham, Boxer, and Wyden.
    Also present: Senator Lautenberg.

OPENING STATEMENT OF HON. JOHN W. WARNER, U.S. SENATOR FROM THE 
                    COMMONWEALTH OF VIRGINIA

    Senator Warner. The hearing will come to order.
    The Senate is anticipating votes, perhaps in as little time 
as 45 minutes to an hour. So the chairman intends to forego the 
opening statement. If other Senators can see fit to do that, I 
think we can move right along.
    Senator Wyden. Mr. Chairman, may we put a statement into 
the record?
    Senator Warner. Of course. Without objection, all 
statements can be inserted into the record.
    The purpose of the hearing is to examine the 
Administration's proposal to reauthorize the civil works 
activities of the Corps of Engineers. It's been the committee's 
practice, since the landmark Water Resources Development Act of 
1986, to enact the water resources legislation on a consistent 
2-year cycle, and today this committee renews its commitment to 
make every effort to do just that.
    We're fortunate to have a brand new Secretary of the Army, 
one who comes from the Senate family, who is highly respected 
by members and staff alike throughout the Senate, the Honorable 
Joseph Westphal, Assistant Secretary for Civil Works, U.S. 
Department of the Army. He's accompanied by Major General 
Russell Fuhrman, Director of Civil Works, and Mr. Michael 
Davis, Deputy Assistant Secretary of Civil Works for Policy and 
Legislation.
    I first wish to thank you, Mr. Secretary, for working with 
my staff as it relates to the Metropolitan Washington, DC. 
water supply. It is critical that we modernize that system, as 
you well understand. Parts of it were built in the 1850's, and 
I think your technical people would be the first to tell you, 
the time has come to face up to that responsibility. You were 
instrumental in the last 48 hours in getting that matter worked 
out as best we can in the Administration and Congress, in the 
few hours that remained before hopefully confirming the 
Secretary of the Army today. I thank you.
    Senator Boxer. Mr. Chairman, may I ask you one brief 
question?
    Senator Warner. Yes.
    Senator Boxer. I've been contacted by a number of 
environmental groups that are not going to be testifying today, 
but would like to submit some testimony for the record.
    Senator Warner. Senator, without objection.
    Senator Boxer. Thank you.
    Senator Warner. Of course, they'll be reasonable in length, 
but I'm glad that you brought that up, and we will do that. 
We'll provide the opportunity.
    Senator Boxer. They're interested in the Challenge 21 
program, and they wanted to have their comments included.
    Senator Warner. Understood.
    [The prepared statements of Senators Warner, Chafee, 
Inhofe, Bond, Baucus, Lautenberg, Reid, Graham, Boxer, and 
Wyden follow:]
   Prepared Statement of Hon. John W. Warner, U.S. Senator from the 
                        Commonwealth of Virginia
    Good morning. I would like to welcome Secretary Westphal to the 
committee this morning as the new Assistant Secretary of the Army for 
Civil Works. We are pleased that you have been confirmed for this 
challenging position and look forward to working with you. The 
committee also welcomes our other witnesses--many of whom have traveled 
far to join us this morning.
    Today, the purpose of the hearing is to examine the 
Administration's proposal to reauthorize the civil works activities for 
the Corps of Engineers.
    It has been the committee's practice since the landmark Water 
Resources bill of 1986 to enact a Water Resources Development Act on a 
consistent 2-year cycle. Today, I renew our commitment to this process.
    A predictable reauthorization process ensures that our Nation's 
water resource infrastructure is constructed and maintained in a timely 
and efficient manner. This process allows the Army Corps of Engineers 
to continue to ``cost share'' project costs with local sponsors.
    In return, citizens have received significant protection from 
flooding and coastal storms. We have maintained our competitive edge in 
a ``one-world'' economic market through the construction and 
maintenance at our Nation's ports and waterways.
    While some may question the economic benefits to the taxpayer from 
investments in these local activities, there is ample evidence to 
confirm that these projects are in the national interest.
    In 1997 alone, Corps flood control projects prevented approximately 
$45.2 billion in damages. The Corps continues to support our Nation's 
commercial navigation through deepening and maintaining our Nation's 
waterways. The value of the commerce on these waterways totaled over 
$600 billion in 1996, generating 15.9 million jobs.
    The national interest in water resource development is clear. We 
are concerned, however, about the Administration's declining budget 
requests for the Corps civil works activities. There is a growing 
disparity between the number of projects which have been fully analyzed 
by the Corps, received Chiefs Reports and authorized by this committee 
compared to the projects funded through the annual Appropriations 
process.
    For example, the Water Resources Development Act of 1996, 
authorized approximately 250 projects for construction. However, less 
than 50 percent--123 projects--have actually received any funding to 
begin construction.
    In addition, the President's fiscal year 1999 construction budget 
request of $784 billion represents a significant reduction from the 
current fiscal year construction funding of $1.47 billion. Certainly, 
this budget request cannot support the work being recommended by the 
Chief of Engineers and again the Congress will need to supplement the 
Administration's request. The Senate Energy and Water Appropriations 
bill, passed last week, contains $1.2 billion for construction 
activities for next fiscal year.
    I remain committed to the cost-sharing principles established in 
the WRDA 1986 which call on local sponsors to be full partners in the 
development of projects. It is my intent to proceed with project 
authorizations that adhere to these principles. They have been 
successful in leveraging non-Federal funds and have ensured that only 
those projects with the strongest local support move forward.
    The committee will hear from several witnesses today about the 
Administration's proposal concerning shore protection projects. I will 
carefully study this proposal and hope that--should the committee 
concur with this approach--that the Administration will begin to budget 
for these vitally needed projects.
    It is disconcerting that the Administration has not implemented the 
provisions of the 1996 Water Resources bill which directed the 
Secretary to recommend shore protection authorizations to Congress and 
to renew budgeting for construction of these authorized projects. While 
I welcome the opportunity to resolve this longstanding issue with the 
Administration regarding Federal support of on-going and new shore 
protection projects, I am concerned that the Administration is not 
firmly committed to maintaining a long term shore protection program.
    Secretary Westphal, I hope that we can begin to make progress on 
this serious issue.
    In closing, I would like to reiterate my support for passage of a 
Water Resources Development Act of 1998. This vital legislation would 
ensure timely and efficient development and maintenance of our Nation's 
water resource infrastructure. I look forward to working with my 
colleagues on the committee to proceed with the development of 
legislation to mark-up in the very near future.
                                 ______
                                 
Prepared Statement of Hon. John H. Chafee, U.S. Senator from the State 
                            of Rhode Island
    Thank you, Senator Warner, for calling today's hearing. We have a 
very short amount of time this year, maybe 9 or 10 weeks, in which to 
complete action on the Water Resources Development Act (WRDA) of 1998. 
I am confident, however, that we will be able to get our work done.
    Very briefly, Mr. Chairman, I'd like to say that I am pleased to 
see our new Assistant Secretary, Dr. Westphal, testifying before the 
committee this morning. I want to congratulate him on his recent 
confirmation and look forward to working with him on a variety of 
important matters.
    Today, I am eager to learn more from Dr. Westphal about the 
Administration's 1998 WRDA proposal. I will be interested to hear what 
the top priorities are, what the overall WRDA dollar level should be, 
and finally, what advice they have to offer on some of the more thorny 
issues.
    In particular, I am wondering if the Administration believes that 
we must fix the Harbor Maintenance Trust Fund this year (as part of 
WRDA). If so, I am eager to review any proposals they might have to 
restore a harbor maintenance user fee that will meet the tests laid out 
by the Supreme Court this past March.
    Again, thank you, Senator Warner, for chairing this hearing. I feel 
strongly about getting the WRDA bill done this year. We have a 
responsibility to the non-Federal project sponsors who have been doing 
their part by sharing feasibility study costs and construction costs, 
likewise.
    Finally, I want to thank Grover Fugate for coming down this morning 
from Rhode Island. We have just come out of a very rough storm season 
in which the South Coast of my State was really battered by 
nor'easters. Grover and the Coastal Resources Management Council did a 
great job responding to--and trying to diminish--the terrible damage 
caused by the storm surges. I am delighted he could make the trip today 
to discuss shoreline issues.
    I look forward to his testimony and indeed that of our other expert 
witnesses.
                                 ______
                                 
   Prepared Statement of Hon. James M. Inhofe, U.S. Senator from the 
                           State of Oklahoma
    Mr. Chairman, Thank you for holding this important hearing today. I 
would also like to thank the ranking member, Senator Baucus and the 
chairman of the Subcommittee on Transportation and Infrastructure, 
Senator Warner, for their leadership on this issue.
    I want to start by stating that I have always had a good working 
relationship with the Corps of Engineers. As a member of the House 
Committee on Public Works and Transportation Committee (now the 
Committee on Transportation and Infrastructure) and now as a member of 
this committee. I have had many occasions to work with the Corps and 
have been generally pleased with their actions.
    The Water Resources Development Act of 1998 (WRDA)gives us an 
important opportunity to assist our communities with flood control and 
river and harbor protection projects. I have always supported the 
prudent expenditure of funds on infrastructure projects and will 
continue to do so in this bill.
    There are, however, some areas of this language that cause me some 
serious concern. After reading the bill, I noticed that a couple 
sections deal with wetlands. Section 17 of this bill would authorize a 
new tax on commercial permit applicants to help the Corps cover the 
cost of preparing the Environmental Impact Statement required by the 
National Environmental Policy Act (NEPA) and the cost of delineation of 
wetlands for major development affecting wetlands. This section changes 
current policy by eliminating the fee charged to private individuals 
and shifts the fee completely to commercial applications. I question 
why anyone should pay a tax for the pleasure of going through the 
wetlands permitting process.
    Section 4, which the Corps also calls ``Challenge 21'', will 
authorize a new Corps program that will seek non-structural approaches 
to preventing or reducing flood damages, which will include wetland 
restoration. To construct these projects, Congress will authorize $325 
million over 6 years and establish a $75 million per-project cap. My 
concern with section is that Congress waives its ability to approve of 
the individual projects. We set two reporting requirements; that the 
Secretary must notify the appropriate committees and he must wait for 
21 calender days before proceeding with a project. In my opinion, we 
are giving up too much of our oversight authority.
    My concern all along has been that we have wetlands policy spread 
out over too many jurisdictions covering too many functions. These 
examples highlight a fractioned wetland policy in which we address 
certain problems in one area with one approach and other problems in 
other areas with a different approach. I would like to see all wetland 
initiatives in a comprehensive bill so that we are very clear in our 
policy regarding wetlands. As most of you know, I am planning to 
introduce a comprehensive wetlands bill this summer. It is my sincere 
desire that the Corps will work with me on that to create a meaningful 
piece of legislation that all members on this committee can support.
    On a final note, it is my understanding that the Corps will be 
providing my staff with draft data regarding a request that I made a 
year ago. I requested that the Corps calculate the average time from 
the initial application for a wetlands permit until the Corps deems the 
application packet complete. I will be anxiously awaiting the results 
of that study.
    Thank you for the time Mr. Chairman. I look forward to working with 
you to draft a meaningful WRDA bill.
                                 ______
                                 
 Prepared Statement of Hon. Christopher S. Bond, U.S. Senator from the 
                           State of Missouri
    Thank you Mr. Chairman, I am grateful for your holding this hearing 
and look forward to working with you to enact a water resources bill.
    Welcome Dr. Westphal. For years we have been receiving loyal and 
dutiful public servants from the Corps who are sent up to defend 
ridiculous budgets written by idealogues at the OMB that we reject on a 
bipartisan basis year after year. The reason we reject them is that we 
represent the millions of people who depend on your mission.
    At no time since I have been in the Senate has the Army Corps of 
Engineers been in greater need for an advocate to fight off those whose 
proposals undermine the very mission that has saved countless lives, 
prevented billions of dollars of flood damage, provided competitive 
international trade advantages for U.S. products and provided economic 
development opportunities in areas where unemployment and poverty is 
historically prevalent. Millions of U.S. citizens are depending upon 
you. I have heard many reports of your strength and knowledge and look 
forward to working with you.
    Dr. Westphal, I won't, but I am tempted to ask you this: if 
Congress adopted anything resembling the President's budget for water 
projects, would you recommend that he veto it? I won't ask you this 
because you shouldn't have to choose between loyalty and responsible 
common sense. I think the measure of your job performance will be your 
independence from OMB. They know the cost of everything, maybe you can 
explain to them the value of something.
    We have a project in Kansas City which protects industries 
employing 12,000 workers and the Administration sent up a budget which, 
if adopted, would send the contractors home next May. It is not just 
dangerous, it is inefficient and more costly.
    They didn't just decimate structural flood control but 
environmental programs as well and I am hearing from hundreds of 
constituents about park closures at Corps-operated lakes. Constituents 
report that rangers are blaming closures on congressional budget cuts, 
which, as you know, is not true. I am sending you a letter on this 
subject today and I hope you can respond. We have social-security-aged 
locks and dams on the upper Mississippi River which must be modernized. 
We can all discuss how best to do it but we must do it without delay.
    I have a proposal worked out with American Rivers to improve the 
health of Missouri waterways but under a $3.2 billion budget as 
proposed by the Administration, it couldn't be funded. We can't operate 
that way. If the Administration wants Congress to fund ``Challenge 
21'', they shouldn't send up a $3.2 billion budget next year.
    There are some in this body who oppose congressional earmarks 
because they argue budgeting should be left to ``professionals'' who 
exercise care and wisdom in the absence of politics to formulate 
responsibly budget priorities.
    As long as this budget is written by OMB, with the Corps gagged and 
standing on the sidelines, that argument will remain, well, laughable.
    What OMB calls ``savings'' would cost our nation and cost the 
taxpayers immensely through cost-overruns, delays, contract 
interruptions not to mention increased flooding, property damage, 
transportation bottlenecks and environmental neglect.
    The Senate, led by Senator Reid and Domenici has gone a long hard 
way toward trying to resuscitate this cadaver but we have more to do 
and I look forward to working with you as we move ahead and I 
Congratulate you on your confirmation. Many are depending upon your 
leadership.
                                 ______
                                 
     Prepared Statement of Hon. Max Baucus, U.S. Senator from the 
                            State of Montana
    Thank you, Mr. Chairman, and I would like to welcome Dr. Westphal 
to what I believe is his first appearance before the Congress in his 
recently confirmed position as Assistant Secretary of the Army for 
Civil Works and his first appearance before this committee. 
Congratulations and I look forward to working with you.
    Mr. Chairman, today's hearing on S. 2131, the Administration's 
proposal for the Water Resources Development Act of 1998 (WRDA), gives 
us the opportunity to listen to both the Administration and our other 
witnesses discuss the policies and projects for the Corps of Engineers. 
This year's WRDA bill proposes a number of new initiatives, including 
the establishment of the Challenge 21 program, a Water Resources 
Foundation and an aquatic restoration program for the Missouri River.
    There are also proposals for changing the cost share for shoreline 
protection and allocating additional recreational fees collected at 
Corps facilities.
    I applaud the Administration for recognizing recreation in the 
Corps' mission and the need to keep our recreational facilities in 
shape. With the recreational facilities managed by the Corps being 
second only to our national forests as this country's most visited 
Federal lands, and generating $10 for every $1 of investment, the 
Corps' contribution to recreation is extremely important. In my State 
of Montana, in eastern Montana, there is a Corps facility called Fort 
Peck. For the residents of eastern Montana, Fort Peck is the only 
recreational facility for hundreds of miles. It is estimated that 86 
percent of the visits to Fort Peck are Montana residents. That can 
partially be attributed to the quality of the facility, a beautiful 
lake with world-class fishing combined with an opportunity to view the 
largest earthen dam in this country. But is also attributable to the 
vastness of my State and the limited recreational opportunities in 
eastern Montana. I encourage you, Dr. Westphal, to come visit one of 
the Corps' crowning achievements.
    I also look forward to hearing the views of the Administration and 
the representative from the American Association of Port Authorities on 
the future of the Harbor Maintenance Trust Fund. Now that the Supreme 
Court has ruled that the ad-valorem fee on exporters is 
unconstitutional, we need to put our heads together to come up with a 
solution to ensure the continued viability of our nation's ports.
    I look forward to hearing from all of you this morning.
                                 ______
                                 
 Prepared Statement of Hon. Frank R. Lautenberg, U.S. Senator from the 
                          State of New Jersey
    Good morning Mr. Chairman. I want to speak briefly on two issues 
important to the economic health of my State. The first is the 
continued viability of our ports.
    This committee recently completed work on the most comprehensive 
infrastructure enhancement program in years--to fund the investments to 
maintain our nation's highways and mass transit. This is what we would 
call the ``above ground'' infrastructure. Now we must quickly turn our 
attention to the infrastructure ``under water,'' which is an equally 
vital component of the Nation's transportation network.
    American ports are facing tremendous pressures in the competition 
for international trade. I can think of no better example of how this 
competition is being played out than in the New York-New Jersey Harbor, 
our Nation's busiest port, which faces threats from the deeper Canadian 
ports.
    The Kill van Kull and Newark Bay channels which serve New Jersey 
and Staten Island, Mr. Chairman, are not naturally deep. They range in 
depth from 35 to 45 feet, even after dredging projects. I recognize the 
urgent need to move ahead quickly with plans to deepen these channels 
to accommodate the larger generation of ships.
    But we need help from the Administration to solve this problem. We 
need a long-term solution to the problem of underfunding for our 
shipping channels.
    As a member of the Budget and Appropriations Committee, I can 
attest to the great difficulty we faced in funding some of these 
projects without proper support from the Administration in its budget 
submission. I plan to pay close attention to the Administration's 
response to the Supreme Court's decision on the Harbor Maintenance Tax 
and to overall funding for port projects.
    American ports stand to lose billions of dollars in revenue and 
jobs to foreign competition if we fail to maintain the infrastructure 
they need to move goods throughout the United States. The ports and 
shipping companies say that they need 50-foot channels to accommodate a 
new breed of cargo ships that are expected to dominate the industry in 
the future.
    As an example of this problem, next month, a so-called ``K Class'' 
ship called the Regina Maersk will be sailing into New York Harbor with 
only half of the cargo it is capable of holding.
    One of the issues I hope to address in this year's WRDA bill is 
what the Federal share of channel deepening projects greater than 45 
feet should be.
    Currently, the Federal share for channel deepening projects in 
excess of 45 feet is 50 percent. This policy was established 12 years 
ago in WRDA 1986, when Congress determined that the shipping industry 
standard for container ships and other vessels was 45 feet. Now that 
the industry standard is greater, and deeper drafts--up to 50 feet--are 
now required, I believe that it is time to revisit this policy.
    Mr. Chairman, I look forward to working with you to appropriately 
adjust this cost-sharing formula.
    The second issue of concern to me is the Federal role in protecting 
our coastal areas from the devastating effects of storms and erosion. I 
am pleased to welcome Ken Pringle from the Borough of Belmar, New 
Jersey, who will speak first-hand about this vital program.
    The Federal shore protection program has worked extremely well in 
my State. As demonstrated by the recent series of winter storms along 
the coast, investments in shore protection projects have prevented 
millions of dollars in Federal disaster assistance and have protected 
lives and property.
    I look forward to working with other coastal Senators on the 
committee to maintaining the Federal role in shore protection. The 
concept of shore protection is no different than flood control--it 
focuses on prevention to avoid huge disaster relief bills in the 
future.
    Two years ago we enacted the Shore Protection Act, which is 
contained in Section 227 of WRDA 1996. This provision stated that the 
Federal Government has a role in shore protection, including the 
placement of sand on beaches to guard against storms.
    I hope that members of the committee will remember the work that 
went into crafting this provision and to think carefully before making 
any changes which would undermine the Federal commitment to shore 
protection. Thank you.
                                 ______
                                 
     Prepared Statement of Hon. Harry Reid, U.S. Senator from the 
                            State of Nevada
    I want to first express my appreciation to the Assistant Secretary 
of the Army Joseph Westphal, Deputy Assistant Secretary Michael Davis 
and General Russell Fuhrman for their testimony today, as well as the 
second panel of many fine representatives of cities and counties. Their 
contribution of experience, expertise and judgment is vital to the 
business of this subcommittee.
    The work of the Army Corps of Engineers is of vital interest to 
sound development of the Nation's water resources, flood damage 
reduction and the regulation of wetlands. Those of us from western 
States understand that water management is essential for sustainable 
growth and development. Proactive monitoring and control of water 
resources is crucial to flood hazards mitigation which provides 
security and peace of mind for residents throughout the State. In 
Nevada, we currently have projects in work to provide for flood control 
in Las Vegas, water quality improvement at Lake Tahoe, restoration of 
the Truckee River and flood warning enhancement at Reno, among others. 
I have no doubt that if we can maintain the Corps' program, we will 
succeed in providing for the water demands of an increasing population, 
while balancing the social needs with our stewardship obligation to the 
environment.
    The U.S. Army Corps of Engineers, with a total Fiscal Year 1999 
level of $3.394 billion budget, has served the Nation well in the 
development of water projects in flood control, water quality, 
environmental restoration and other public infrastructure. The approach 
the Administration took with the Corps' Fiscal Year 1999 budget is 
deeply troubling. Almost $1.5 billion was cut from the water projects 
from around the Nation. If the future of the Corps' programs are to be 
determined by the Office of Management and Budget without regard for 
the Corps' projects, much less congressional direction, then the many 
needed projects throughout our States, basins, and communities will be 
irreparably undermined. I hope that we can work with the Corps to get 
this biennial Water Resources Development Act passed and that future 
budget proposals from the Administration will be supportive of the 
legislation that is produced.
                                 ______
                                 
     Prepared Statement of Hon. Bob Graham, U.S. Senator from the 
                            State of Florida
    Mr. Chairman, members of the committee, and guests. I would like to 
take this opportunity to highlight the critical importance of the Water 
Resources Development Act of 1998 for the State of Florida.
    As you know, water issues in Florida cover the gamut, including 
everything from coastal protection to inland water quality management, 
from statewide drought to statewide flooding. Our history dealing with 
water resources has caused some of our own problems that we seek to 
correct today.
    In the Water Resources Development Act of 1998, there are many, 
many critical items for the State of Florida. This morning, I would 
like to highlight three of these items including shore protection 
policy, alternative water source development, and the Everglades and 
South Florida Ecosystem Restoration.
    In the area of shore protection: The Administration's policy the 
last several years has been to discourage Federal involvement in new 
shore protection projects. Section 227 of the Water Resources 
Development Act of 1996 specifically authorized Federal involvement in 
the protection, restoration and enhancement of sandy beaches, including 
beach restoration and periodic beach renourishment. Regardless of 
congressional action in this critical area, the Administration has 
continued to consider shore protection projects a low priority and has 
declined to budget for new projects.
    I am proposing legislation for inclusion in WRDA 98 that will 
modify the current shore protection paradigm by increasing the State's 
role while still providing for a Federal role in shore protection. I am 
proposing that criteria be established for the concept of an eligible 
State. An eligible State would be one which has been accepted by the 
Secretary of the Army as meeting two statutory requirements.
    The first requirement is organizational. A State must establish 
regional shore protection entities which conform to the natural 
shoreline of the State. Normally this would mean between major 
shoreline cuts such as harbors. For instance, in South Florida, a 
natural region might be that between the Port Everglades and the Port 
of Miami. These regional entities would have the responsibility for 
establishing priorities among coastal renourishment projects within 
their region, and to be the local sponsor for those projects which were 
recommended. The State must also establish a State entity to oversee 
the regional entities for the specific purpose of establishing 
statewide priorities among those projects that are recommended by the 
regional agencies. The States will be allowed considerable latitude as 
to how to structure both the regional and State organizations, the 
method of selecting membership, the relationship with other State 
agencies and the specific geography of the regional entities.
    The second requirement is financial. To be eligible for Federal 
assistance, each State would have to submit a financing plan for each 
proposed shore protection project. The financing plan will be a part of 
the project cooperation agreement and must assure that the non-Federal 
share for initial construction and any future renourishments be 
securely financed by the State. The non-Federal share of the initial 
and future project costs will be computed in accordance with existing 
law. However, the Secretary of the Army will be required to give 
priority to projects for which a State increases the non-Federal 
contribution beyond that required by law. The priority of the project 
for funding will be determined by the size of the increase (by 
percentage) of the non-Federal share.
    Current law provides that one hundred percent of the cost of 
preventing or mitigating shore erosion attributable to Federal 
navigation projects or other Federal activities be borne by the Federal 
Government. Current law also requires the Secretary of the Army to give 
preference to these type of projects. Unfortunately, due to past 
decisions by the Federal Government many local entities have lost 
confidence in the Federal Government's ability to accurately assess the 
non-Federal cost of a project. Many local communities do not see the 
Federal Government serving as an honest broker that upholds the 
interests of all parties concerned. Instead, many communities feel the 
Federal interest is being held above the local interest to such an 
extent that some have resorted to litigation against the Federal 
Government. In an effort to restore confidence in the Federal 
Government's role as an honest broker, I am proposing that an 
independent board be established to determine the percentage of a shore 
protection project attributable to Federal activities. This board shall 
consist of one person appointed by the Secretary of the Army from the 
Coastal Engineering Research Laboratory and two persons appointed by 
the Governor of the State in which the project is located. One of the 
individuals appointed by a State's Governor shall be from academia and 
shall have outstanding credentials in shoreline and coastal systems. 
The other individual appointed by a State's Governor shall be an 
official within the State entity described earlier under the eligible 
State concept. The independent board will be responsible for approving 
or modifying the percentage of the project attributable to Federal 
activities.
    The legislation I have proposed for shore protection policy will 
build upon the existing system by adding necessary policy changes that 
will allow the Secretary of the Army to administer a more effective 
program. The legislation will provide a framework and incentive for 
greater State and less Federal participation. This will allow limited 
Federal resources to stretch further and will ultimately allow more 
shore protection projects to move forward.
    In the area of alternative water supply: One of the unique aspects 
of the Florida water system is that we frequently undergo periods of 
drought and periods of flooding. This is the nature of a system that 
has been modified by human manipulation of natural flowways. In the 
State of Florida, our growing population coupled with the need to 
protect our natural systems has created a water quality challenge. From 
1995 to 1996 Florida added 260,000 new residents, or the equivalent of 
four new Daytona Beaches. Between 1980 to 1995, Florida's public water 
supply needs increased 43 percent, more than double the national 
average of 16 percent. This shows no signs of slowing down. Today, 
Florida continues to grow at the rate of more than 800 people per day.
    Many other States on the eastern seaboard face similar challenges. 
For example, a recent article in New Jersey Monthly stated that New 
Jersey leads the Nation in the percentage of land mass that is 
classified as having a high vulnerability for serious water quality 
problems. According to the U.S. EPA, more that 66 percent of that State 
falls into the most precarious category for water quality.
    In addition, as early as 1983, a U.S. Army Corps of Engineers study 
stated that deficits in water supply for the area south of the James 
River are projected to be as much as 60 million gallons per day by the 
year 2030. Groundwater withdrawals have caused water level declines of 
as much as 200 feet in some areas.
    In the State of New York, water levels in aquifers are predicted to 
decline by as much as 18 feet and low flows in streams may be decreased 
by 90 percent in parts of Long Island.
    In each of these cases, water supply is inherently tied to water 
quality. Problems such as groundwater overpumping, damage of existing 
wetlands, and saltwater intrusion of aquifers can cause irreparable 
damage to our water systems and surrounding ecosystems. For example, 
since 1906 wetland acreage in the State of Florida has shrunk by 46 
percent, resulting in a loss of critical habitats as well as a key link 
in the replenishment of our aquifers. The development of alternative 
water sources that will help to resolve these types of issues and allow 
States to provide for future water supply needs without sacrificing 
environmental protection is my goal. Using this scenario, I am 
proposing to authorize a program in WRDA 1998 that would fund the 
design and construction of water source projects to conserve, reclaim, 
and reuse this most precious resource. The bill would authorize grants 
to State agencies for the purposes of maximizing available water supply 
while protecting the environment through the development of alternative 
water sources. Provided on a 50 percent matching basis, these Federal 
funds would augment existing State funds and make progress in this area 
possible.
    The State of Florida is taking this issue seriously, and in 1998 
alone has budgeted $75 million in regional and State funds for 
development of alternative water supplies. The approach to alternative 
water supply development that I am proposing for inclusion into WRDA 
1998 will insure water availability without compromising water quality.
    Finally, in the area of the Everglades and South Florida Ecosystem 
Restoration: The Everglades restoration project is the largest 
restoration program in the world today. This vast region, which is home 
to more than six million Americans, seven of the ten fastest growing 
cities in the country, a huge tourism industry, and a large 
agricultural economy, also encompasses one of the world's unique 
environmental resources. Over the past 100 years, manmade changes to 
the region's water flow have provided important economic benefits to 
the region, but have also had devastating effects on the environment. 
Biological indicators in the form of native flora and fauna have shown 
severe damage throughout south Florida.
    The work of the Army Corps of Engineers is essential to this 
effort. The critical projects authorized in WRDA 1996 has demonstrated 
substantial success. The South Florida Ecosystem Restoration Task 
Force, the Governor's Commission for a Sustainable South Florida, local 
sponsors, and the Army Corps have completed a review of over 100 
potential projects, narrowed the list to 35 and ranked them in order of 
priority for accelerating the restoration of the South Florida 
ecosystem.
    The Army Corps of Engineers began their work on these projects in 
December 1997 when they received fiscal year 1998 funds. Between 
December 1997 and June 1998, the Army Corps has issued 10 approvals for 
project letter reports, initiated plans and specifications on 4 of 
those 10 projects, initiated NEPA documentation on 5 of those 10 
projects, and completed draft cooperative agreements with local 
sponsors on all 10 projects.
    Construction on one project, the Southern Corkscrew Regional 
Ecosystem Watershed/Imperial River Flow-way restoration project is 
scheduled for groundbreaking in mid-July 1998. This project, a 
partnership between the Corps, the South Florida Water Management 
District, and Lee County, will restore historical sheet flow across a 
4,600 acre tract of wetlands in southern Lee County. This will 
establish more natural hydrology on wetland habitat for wildlife, it 
will improve water quality of stormwater runoff into the Imperial River 
and Estero Bay, it will recharge surficial aquifers and preclude salt 
water intrusion, and it will augment flood control by improving natural 
storage in wetlands.
    One of the four projects for which plans and specifications have 
been initiated is the construction of culverts along the Tamiami Trail, 
the only major thoughway from the west coast of Florida to the east 
coast of Florida in the southern part of the State. This project 
involves the construction of multiple culverts that will allow 
increased flows of water from the northern end of the Everglades to the 
southern end without eliminating this transportation vehicle that is so 
critical to the citizens of Florida. In the original project outline, 
completion was estimated to cost approximately $6.6 million. During 
their study of the hydrologic conditions in this area in preparation 
for construction, the Corps has concluded that the number of culverts 
required can be reduced from over 2 dozen to 12 or less, resulting in a 
reduced total project cost. Due to the unique type of authorization, 
these funds, originally allocated for Everglades restoration, can now 
be re-allocated to other critical projects. In this way, the 
authorization provided by this committee, has provided an incentive for 
keeping project costs low by allowing funds to be allocated within the 
Everglades restoration project.
    The Army Corps has effectively streamlined its internal process to 
effectively implement the critical projects. Current planning indicates 
that these 10 projects will exhaust the $75 million available under the 
1996 authority.
    In light of the success of this program, the criticality of the 
Everglades restoration program, and the fact that over 20 priority 
critical projects will not be authorized under the 1996 authority, I 
plan to recommend that Congress extend the program authority to the 
year 2002 and raise the program limit to $150 million. This increase 
will allow implementation of 20 additional projects according to 
existing cost estimates. The extension of the authority to 2002 will 
allow the existing Corps projects to continue as planned (the 
initiation of this program was delayed for 1 year due to the fact that 
no appropriations were provided in 1996.) The additional 2-year 
authorization will provide adequate time for the Army Corps of 
Engineers to begin work on additional critical projects that will be 
funded by the additional authorization that I am recommending under 
WRDA 1998.
    Many of these 20 projects are critical to the restoration of the 
Everglades. One such project, the Ten Mile Creek Water Preserve Area 
will create a more natural salinity range in the North Fork Aquatic 
Preserve and the St. Lucie River Estuary through the creation of an 
8000 acre-foot storm water retention reservoir. This project will help 
protect the fragile estuary system of Indian River Lagoon which has 
been severely impacted by increased flows.
    Together, these three initiatives will help to insure the future of 
the State of Florida by protecting our water resources that are so 
critical to our environment and our economy.
                                 ______
                                 
    Prepared Statement of Hon. Barbara Boxer, U.S. Senator from the 
                          State of California
    Thank you, Chairman Warner, for your leadership in moving us ahead 
with consideration of WRDA 98.
    The Water Resources Development Act has been an important mechanism 
for California and the Nation to maintain our harbors and waterways and 
to protect our citizens and businesses against the devastating effects 
of floods. Since the Act was first passed in 1986, the Army Corps of 
Engineers has built numerous flood control works, coastal harbor and 
inland waterway improvements. These works have not only protected our 
communities but have also been an important instrument to their further 
economic development.
    WRDA 98 will provide authorization for new projects that are sorely 
needed in light of the devastating ``el Nino'' weather system 
California has endured in the last year. Flood control has never been 
so important as it has been with the enormous rainfall we have 
received.
    The legislation recommended by the President is welcome news for my 
State of California. Not only has the Administration submitted a long-
term flood control protection plan for the Sacramento area but the 
President has proposed a new initiative, known as Challenge 21, to 
provide our communities a way to reduce flood costs in a more natural, 
environmentally beneficial manner.
    I look forward to the testimony on this Challenge 21 plan. I 
believe many communities will be interested in this approach. In fact, 
in my State the people of Napa County learned how to modify their flood 
control plan and by working together produced a consensus plan that 
incorporates natural elements of flood control.
    I also want to thank my colleagues here for their help in providing 
improved flood protection for the Sacramento area in the WRDA 1996 
bill. Now the plan for the American River Watershed in the current 
Administration bill builds on the authorization for flood control that 
this committee approved in 1996.
    Sacramento, our State capitol, is located at the confluence of both 
the Sacramento River flowing from the north and the American River, 
which cascades from the High Sierra mountains from the east. There are 
400,000 residents, 130 schools and 5,000 businesses located in the 
floodplain and $37 billion worth of property at risk. The most likely 
cause of a flood would be a breach in the American River levees which 
could inundate 55,000 acres.
    The damages from even a 100-year flood would be comparable to the 
1989 Loma Prieta earthquake which caused 63 deaths, almost 4,000 
injuries and $8 billion in direct property damage. Our awareness of 
this risk has heightened since the Corps determined late last year the 
100-year level of flood protection has dropped to 77-year level now. 
Sacramento has one of the highest levels of risk and one of the lowest 
levels of protection. Over the next 30 years, Sacramento has a 1-in-3 
chance of flooding.
    In 1996, this committee approved a so-called ``common elements'' 
plan to provide a minimum level of flood protection. These were 
improvements that were common to all three flood control plans then 
under study. This latest plan, builds on a growing community consensus 
on the most cost-effective plan for flood protection. This plan is a 
two-part approach which involves increasing the flood control capacity 
of the Folsom Dam on the American River and raising and strengthening 
the existing American River levees.
    Mr. Chairman, the Sacramento area has gone through a wrenching 
debate over the best approach to flood control with the specter of 
disaster always hovering above them. There is still a minority pushing 
for construction of a dam on the American River at costs ranging from 
$1 to $2 billion. The Auburn Dam would destroy nearly 50 miles and 
10,000 acres of the American River and the diverse habitats of its 
canyons, where there are three species, including the bald eagle, on 
the Federal list of endangered and threatened species. Congress now has 
twice rejected the high-cost, 500-foot Auburn Dam alternative that 
would have been built on an earthquake fault. Now, we have come 
together and resolved to move ahead on a realistic plan. This plan was 
approved by the Sacramento Area Flood Control Agency in March by a 10-
to-2 vote. The Sacramento City Council has unanimously approved the 
plan and the National Wildlife Federation, Friends of the Earth, and 
the Sierra Club and have endorsed it.
    It's time for us to move forward with a plan for permanent 
protection. Mr. Chairman, I ask unanimous consent that testimony from 
the Sacramento Area Flood Control Agency be entered into the committee 
record.
    Thank you.
                                 ______
                                 
      Prepared Statement by Hon. Ron Wyden, U.S. Senator from the 
                            State of Oregon
    Columbia River ports are one of the Nation's largest hubs for 
exports and international trade. But we need to accommodate the larger 
cargo ships that are now the state-of-the-art to stay competitive.
    We have to keep the Columbia open for business to protect jobs in 
farms and factories from the Willamette Valley all the way to Montana 
and the Dakotas. The Columbia is our region's main street for wheat 
farmers and cattle ranchers throughout the West, and for the paper, 
lumber and aluminum mills throughout our region.
    But today, the larger ships that are carrying more and more of the 
world's cargo exceed the current 40-foot channel depth. Already, one 
shipping line has moved its business from Portland to Vancouver, B.C. 
because of inadequate depth in the channel.
    Deepening the Columbia Channel will improve the competitiveness of 
our ports and our entire region. This project will determine whether we 
will continue to have first-class ports in the 21st century.
    I am absolutely committed to seeing this project move forward. I 
want to work with the committee and the Corps to all explore options 
for advancing this project in the Water Resources bill this year.
    The Army Corps' hopper dredges stationed in the Pacific Northwest, 
the Essayons and the Yaquina, are also critical to maintaining 
navigation channels and to commerce in our region.
    Dredges must be available on short notice to respond to emergency 
situations, such as restoring the Columbia channel following flooding. 
In addition, Corps dredges perform maintenance dredging work in the 
Columbia River channel and in a number of coastal ports each year.
    Northwest port officials are convinced that maintaining a strong 
Corps dredging presence is essential for commerce in our region. These 
are hard-nosed business people. If they felt they could get better 
service for their money using private industry dredges, they would do 
so in a heartbeat. But they're not going to take riverboat gamble and 
go with unproven dredging contractors.
    In the 1996 WRDA law, a compromise was negotiated to put another 
Corps dredge based in the Gulf of Mexico, the Wheeler, in reserve 
status as an experiment to see if private industry can do the work that 
Corps dredges have done in the past. The 1996 law called for the Corps 
to provide a report to Congress within 2 years on whether the Gulf 
dredge should be reactivated or maintained in reserve status.
    Mr. Chairman, the required report has not been provided to 
Congress. This committee has no information to evaluate the impact of 
laying up dredges on our nation's commerce.
    Despite this, the Corps has floated various proposals that would 
further cut back on the volume of dredging work performed by the Corps 
dredges.
    I find it troubling that the Corps is proceeding in this way 
without having provided the report required by Congress. What is even 
more troubling is the Corps also seems to be totaling ignoring evidence 
uncovered by the U.S. Army Audit Agency indicating private contractors 
may have conspired to limit competition by rigging bids on Corps 
dredging projects.
    Mr. Chairman, the Corps should not be rushing forward with reckless 
proposals to eliminate the Federal dredge fleet. We need to proceed 
cautiously in this area or we could end up with many of our ports left 
high and dry while the taxpayers get ripped off by unscrupulous 
contractors.

    Senator Warner. Thank you, Mr. Secretary. If you could 
summarize what you have in mind. The bill is very extensive, 
I've looked it over, and I don't know that you need to go 
section by section. I think highlighting those portions that 
might be somewhat different between the 1986 to 1996.

 STATEMENT OF HON. JOSEPH W. WESTPHAL, ASSISTANT SECRETARY FOR 
CIVIL WORKS, DEPARTMENT OF THE ARMY; ACCOMPANIED BY MICHAEL L. 
DAVIS, DEPUTY ASSISTANT SECRETARY OF CIVIL WORKS FOR POLICY AND 
LEGISLATION; AND MAJOR GENERAL RUSSELL L. FUHRMAN, DIRECTOR OF 
                          CIVIL WORKS

    Dr. Westphal. Thank you, Mr. Chairman. It's a great honor 
to be here today, and especially to have my first testimony 
after being confirmed just a few days ago before this 
distinguished subcommittee, and before you, Mr. Chairman, my 
Senator and my friend and my mentor here in the Senate. So 
thank you very much.
    Mr. Chairman and distinguished members of the committee, I 
am accompanied by the Director of Civil Works, Major General 
Russell L. Fuhrman, and Deputy Assistant Secretary of the Army 
for Civil Works, Michael Davis. I will rely a lot on them for 
specific and technical information that may address some of the 
questions the members have today that I may not be able to 
address. But hopefully, I will be able to in the near future.
    I think we share with the Congress and with this committee 
a strong commitment for water resources development and 
biennial authorization for this bill. A strong water resources 
development program is a sound investment in our Nation's 
economic future and in environmental stability for that future. 
Communities across the country rely on water resources projects 
to reduce flood damages, compete more efficiently in world 
trade, provide needed water and power, provide recreational 
opportunities and protect and enhance our aquatic resources.
    We also have a responsibility to our project sponsors who 
are doing their part by sharing feasibility study costs and 
construction costs. Our goal is to match our sponsors' 
commitment with realistic, cost-efficient schedules and timely 
authorization for justified and environmental acceptable 
projects.
    A 2-year authorization cycle shows our support for orderly 
water resources development. The Water Resources Development 
Act is the principal vehicle for obtaining necessary 
legislation to authorize projects that our studies have shown 
to be good Federal investments. Legislation is often necessary 
to realize the goal of making our programs more effective and 
efficient by addressing policy issues.
    Mr. Chairman and members, as you are well aware, there are 
many pressing needs for water resource development in this 
country. We must work together to address these problems in the 
full light of our fiscal capabilities and constraints. And to 
help us meet our mutual objectives, we suggest the following 
principles be enforced in formulating our Water Resources 
Development Act for 1998.
    First, at the heart of the Water Resources Development Act 
of 1986 were the beneficiary pay reforms, which included cost 
sharing. Cost sharing serves as a market test of a project's 
merits, ensures active participation by project sponsors and 
beneficiaries, and ensures project cost effectiveness. We have 
found it to be an eminently successful policy. Cost sharing 
reforms enacted in WRDA 1996 should also be preserved.
    Second, the Nation's water resources infrastructure must be 
maintained and improved to meet future needs. But in consonance 
with other national priorities and a balanced budget. We should 
never create false hope by authorizing projects that we cannot 
reasonably expect to fund or complete within a reasonable 
timeframe.
    In light of the $20 billion backlog of ongoing Corps 
construction projects and other authorized projects awaiting 
construction, the dollar magnitude for new projects and 
programs in the Administration's proposal is constrained. It is 
limited to authorizing vital new projects and programs, some of 
which are expected to be phased in over a number of years to 
give priority to completion of ongoing construction projects.
    The total cost of the bill is $1.462 billion, with a 
Federal cost of $829 million, and a non-Federal cost of $633 
million. This will allow us to move forward with a more 
sustainable long-term construction program and more timely 
project delivery to non-Federal sponsors.
    To justify the authorization of appropriations of 
constrained Federal dollars, we must assure the public that 
proposed projects have the full review and are in accord with 
the Federal laws and policies established to protect the 
environment and to set priorities for the use of those funds. 
The Administration urges Congress to restrict new 
authorizations, to justified projects likely to be funded over 
the next several years.
    Now, for the Army Civil Works legislative program in this 
bill, Mr. Chairman, members, the Army Civil Works legislative 
program consists of important legislative proposals for the 
administration of the civil works program and authorization for 
projects recommended by the Administration. Let me just 
emphasize a few of these.
    Senator Boxer mentioned Challenge 21. Challenge 21 is the 
centerpiece of the Army Civil Works legislative program for 
1998, an important initiative, because it will provide the 
Nation with a comprehensive tool for reducing flood damage. 
This initiative expands the use of non-structural options to 
achieve the dual purposes of flood damage reduction and the 
restoration of riverine ecosystems.
    Challenge 21 responds to those communities who have 
expressed a strong desire to reduce repeated losses and improve 
the quality of their environment. This new program will give 
the Nation additional tools for protection against flood 
damages. Challenge 21 will focus on non-structural solutions to 
reducing flood damages while maintaining the flexibility to use 
more traditional structures, like levees or flood walls, etc., 
where appropriate, create a framework for more effective 
Federal coordination of flood damage reduction programs, create 
a partnership with the community to develop a comprehensive 
solution to reducing damages and improving quality of life, and 
focusing on watershed-based solutions that can include the 
restoration of riparian wetlands and ecosystems.
    Under this program, the projects will be coordinated fully 
with Federal, State, tribal, and local communities. Because the 
cost of projects will be cost shared, no project will be 
implemented unless State, tribal, and local sponsor support it. 
Thus, through coordination with other Federal agencies and 
State and local communities, Challenge 21 addresses a lesson 
we've learned from the past decades of floods, flood damage 
reduction efforts must include partnering between the Federal 
agencies and State, tribal, and local communities.
    Watershed by watershed, Challenge 21 will build on existing 
programs and initiatives and expand partnerships with other 
Federal and non-Federal national and local entities. Among our 
key Federal partners, would include, for example, FEMA and the 
Department of Agriculture. Through Federal partnering, a 
Challenge 21 project could include an urban structure 
relocation piece led by FEMA and a rural wetlands restoration 
piece led by the Department of Agriculture's Natural Resource 
Conservation Service.
    Thus, Challenge 21 relies on the collective knowledge, 
expertise, and authority of many Federal water resource 
agencies.
    Mr. Chairman, there is in my formal statement more 
information about Challenge 21. But due to the committee's time 
constraints and votes, let me just go on.
    Senator Warner. We have a very good writeup prepared by our 
staff before us. So I think most members have a good 
understanding of this initiative.
    Dr. Westphal. Right. Mr. Chairman, the other key issue in 
this bill, of course, is shore protection policy. The 
Administration is also proposing a new approach to shore 
protection that will increase predictability and emphasize our 
commitment to undertake shore protection work. With the 
adoption of this approach, the Administration will consider, 
consistent with overall funding constraints, shore protection 
projects on an equal basis with other water resource 
development projects.
    As you know, the Administration and the Congress have not 
given shore protection policy the same level of priority in 
funding. The Administration has two concerns. First, 
commitments on existing shore protection projects that involve 
periodic nourishment require a significant amount of future 
Federal funds. And we have found it difficult to initiate new 
projects in face of the costs of these comments.
    Second, the Administration's concern is that while these 
shore protection projects produce storm damage prevention 
benefits, they also provide local recreation benefits, and that 
some of the revenue created in these areas and these projects 
should be dedicated to shore protection projects that provide 
such recreational opportunities.
    To resolve both of these concerns, we have included in the 
Army Civil Works legislative program a proposal to advance the 
dialog on how to reconcile this important issue. And Mr. 
Chairman, it's on the record there, the proposal made by the 
Administration. I'll continue on with other WRDA initiatives in 
1998.
    We have in the bill another initiative concerning the 
Everglades and the South Florida ecosystem restoration. This 
provision extends the authorization for critical ecosystem 
restoration projects in South Florida through fiscal year 2000 
to take advantage of the synergy and collaborative approaches 
that have evolved to implement a shared vision for ecosystem 
restoration. We need this extension because funds were not 
available to begin work on this important project in fiscal 
year 1997 as anticipated.
    This program has been very successful. Fourteen reports 
have been received for critical projects, and 10 have been 
approved for implementation. These projects will provide 
immediate and substantial benefits to the ecosystem.
    We are also proposing a lower Missouri River Aquatic 
Restoration Program, building on the legislation introduced by 
Senator Bond. This proposal will authorize a comprehensive 
report to be completed at full Federal expense within 1 year 
after funds are made available. The report will identify a 
general implementation strategy and overall plan for 
environmental restoration and protection along the lower 
Missouri River between Gavins Point Dam and the confluence of 
the Missouri and Mississippi Rivers and recommend individual 
environmental restoration projects that can be considered by 
the Secretary for implementation under section 206 of the Water 
Resources Development Act of 1996.
    There are also several measures that will help us to better 
manage our important natural resources, primarily at numerous 
lakes and reservoirs. One of our more important measures will 
allow resource managers to retain funds resulting from 
increased collections of recreational user fees above the 
baseline collection. Eighty percent of the increased 
collections will go to the site from which the fees were 
collected, and 20 percent would be used agency-wide. This will, 
I think, serve as an incentive to improve collection and 
recreation user fees.
    Also, there are several measures that will allow us to 
improve our program management. For example, we have included 
proposals to allow public and non-profit organizations to serve 
as project sponsors on aquatic ecosystem restoration and 
beneficial uses of dredge material projects. Another example is 
a provision that would allow the Secretary of the Army to 
accept non-Federal funds from State and local governments to 
expand our services in compiling and transmitting information 
on floods and damages.
    Mr. Chairman, members of the committee, included in the 
Army Civil Works legislative program are projects recommended 
for authorization that have been reviewed and approved by the 
Administration and a conditional authorization for Grand Forks, 
ND, and East Grand Forks, MN.
    The Administration bill includes authorization of much-
needed additional flood protection to Sacramento, CA. The 
proposal is supported by a non-Federal sponsor, the Sacramento 
Area Flood Control Agency, and includes several phases. First, 
the Corps will complete the common elements authorized in the 
Water Resources Development Act of 1996. Second, the Folsom Dam 
will be modified so it could be operated in a way to better 
provide flood protection. Third, downstream levees would be re-
engineered to safely pass the increased discharge from the 
modified Folsom Dam.
    We understand the natural concern that some have about 
providing flood protection with levees. I should note that the 
existing levees have functioned well, and that the Corps will 
ensure that the new levees are engineered and constructed to 
pass the design flood in a safe and reliable manner.
    Other projects included in the Administration's bill are 
the Amite River and tributaries, Louisiana, East Baton Rouge 
Parish watershed, the Guanajibo River in Puerto Rico, and the 
Rio Niagua in Salinas, PR. There are additional projects under 
review at this time that will be furnished to the committee as 
soon as the Administration reviews are complete.
    Mr. Chairman and distinguished members of the committee, 
again I thank you for the opportunity to come before the 
subcommittee. I look forward to working with you and members of 
the committee and your staffs in developing an absolutely great 
WRDA bill this year, and support your efforts.
    Senator Warner. Mr. Secretary, you've had a lot of 
experience, and we look forward to working with you.
    Dr. Westphal. Thank you, sir.
    Senator Warner. I think this initiative by the President, 
which has been introduced by Mr. Chafee, Mr. Baucus, and 
myself, is a good foundation. And it's the intention of this 
committee to build on it.
    The challenge before this committee is, this is a most 
unusual legislative cycle for a variety of reasons, my 
colleagues understand that very clearly. We're going to have to 
use the rough and tumble tactics we used in the highway bill, I 
think, if we're to move this bill through. Fortunately, on my 
right and on my left are able persons who've made possible that 
highway bill, and I hope that we can join together in a 
bipartisan way and get this legislation through.
    So we'll start now on questions, and the chair will try and 
very rigidly apply the 5-minute rule, so each of the members 
present now can have that opportunity. We'll start off with the 
shore protection. Will you begin the budget for these projects? 
You know, there's not that history, and that's what concerns 
us. The past Administration refused to budget to support the 
authorization.
    Dr. Westphal. Well, Mr. Chairman, I think this new proposal 
will put all shore protection, beach nourishment projects on 
equal footing. I think there--I'm certainly going to work with 
OMB to make sure that we do budget for these projects.
    Senator Warner. That's the answer we want, you personally 
will do everything you can to see that it is covered in budget.
    Dr. Westphal. Yes, sir.
    Senator Warner. The Challenge 21, in the Administration 
bill you propose new continuing authority. We've covered all 
that. The program is drastically larger than any other. Why 
shouldn't this program be consistent with the current 
continuing authorities program?
    Dr. Westphal. Mr. Chairman, let me defer that question to 
Mr. Davis. He has worked long and hard on this particular 
proposal.
    Senator Warner. We welcome Mr. Davis, and your thoughts on 
that.
    Mr. Davis. Mr. Chairman, we carefully looked at a variety 
of different levels as we were designing the Challenge 21 
program. We were looking at some examples of communities around 
the country where we might be relocating structures. Typically, 
it's a fairly expensive proposition to relocate houses and 
businesses. So we believe that the $75 million Army Civil Works 
limit in the legislation is the appropriate level to allow us 
to work with small- and moderate-sized communities, that 
anything much less than that probably would not provide us too 
much utility in terms of meeting the objectives of Challenge 
21.
    Senator Warner. All right. Now to the Harbor Maintenance 
Trust Fund. On March 31, the Supreme Court issued a decision. 
Since then, the Administration has informed Congress that it 
intends to pose a replacement system with a new collection 
method and a new way to distribute the funds called a Harbor 
Services Fund. What's the status of the effort?
    Dr. Westphal. Mr. Chairman, the Office of Management and 
Budget and the Corps of Engineers staff have been working on 
this proposal now for quite a while, certainly long before I 
came on board. Since my arrival, I've asked an additional set 
of questions about the fund and about the fees and what the 
possible impact would be to competitiveness among ports, our 
ports as well as our international competitive advantages.
    And so they are continuing to work on this proposal and 
continuing to try to come up with something that will meet the 
legal tests and the economic tests that I think everybody wants 
on this. I expect that the Administration will have a proposal 
before the committee some time in the next few weeks. I 
couldn't tell you exactly when. I think the idea is to try to 
make sure that we give you a proposal that really is sound and 
well-analyzed, and that you can then move forward.
    As this legislative session is a short one, I'm not certain 
that you're going to be able to finish it out this year, but we 
at least like to get you something as soon as possible.
    Senator Warner. Give it a shot to work with.
    Last question: recreation user fees. Section 13.2131 
authorizes the use of recreation fees to total more than $34 
million for the use of parks
    Dr. Westphal. Yes.
    Senator Warner. Of the total collected over $34 million, 80 
percent will remain in the park where the fee is collected, 20 
percent will be used for other activities. Do you have any 
estimates of how much funding will be allowed to remain at a 
park--what percentage--are you going to stay to those 
percentages?
    Dr. Westphal. I believe all the money, correct me if I'm 
wrong, but I believe all the money will remain in the place 
that it is collected from. In other words, no funds will be 
shifted from one park to another.
    Senator Warner. So you might not split the fee now? Does 
anyone have an answer as to what you're going to do?
    Mr. Davis. Mr. Chairman, the $34 million baseline is what 
we're collecting now. We believe that if the amounts above that 
$34 million could be rolled back into the project site, and 
under our proposal, 80 percent would go back to the project 
site, and then 20 percent would be used across the Nation to go 
back to various project sites.
    Right now, there's no incentive for our resource managers, 
who are really constrained by limited budgets, to aggressively 
collect the fees. So we believe that while we're not raising 
individual fees, that they will collect more fees and so this 
will go above the $34 million baseline. That's where we would 
generate this revenue.
    Senator Warner. Thank you.
    Senator Lautenberg.
    Senator Lautenberg. Mr. Chairman, I appreciate the 
courtesy. I am here at your invitation, so I will defer to the 
members of the subcommittee.
    Senator Warner. All right, thank you very much.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman. As you know, we 
have a Senate Armed Services Committee meeting simultaneously 
with this, so I'll be leaving in just a moment.
    I'd like first of all to say how pleased I am that Dr. 
Westphal is in the position he's in. I was very supportive of 
his nomination, and I think it was an oversight of our chairman 
to fail to mention that you had very deep roots in Oklahoma----
    [Laughter.]
    Senator Inhofe [continuing]. That he had been a professor 
at the Oklahoma State University, and that we've worked 
together in many capacities.
    Let me mention something to start with that's parochial, 
which I mentioned to you I would do. I attend a lot of town 
hall meetings, probably more than most people do. I have 
approximately 10 each weekend, even during session.
    I was in town meetings in Durant and McAlister a couple of 
weeks ago, and I've never seen such organized opposition to the 
operation of the Corps. Normally there would be a few people 
who aren't happy with some things, but this is very well 
organized. It has to do--I'll mention them since I know you 
have very competent staff that will be taking notes about this: 
Sunset Park on Lake Texoma, the road has been ripped up by the 
Corps and the park has been locked shut. And at Crowder Point, 
at Lake Eufala, the park has not been maintained for about 5 
years now.
    I'd like to hear, since you're new on the block here, how 
you plan to address some of these problems. I know it's not 
going to be the policy of the Corps just to abandon some of 
these facilities.
    Dr. Westphal. I will address them, and the best way for me 
to address them, of course, is to work alongside the Director 
of Civil Works, Major General Fuhrman. And I might let him say 
a few words about this. But I think the thing to do is to 
simply look into your concerns immediately, through the 
Director of Civil Works, talk to the District Engineer in Tulsa 
and find out exactly what are the issues and why, and try to 
get you a response as soon as possible.
    Senator Inhofe. It wouldn't be necessary for General 
Fuhrman to make any statement at this time. By the way, I have 
worked very closely with the Corps of Engineers, not just in 
the 8 years I spent in the House, but also a mayor of Tulsa. 
They'll tell you we had a very close working relationship.
    But around the State, there are problems like that, and I 
would like to address these two specific ones, and then perhaps 
talk about some others. As you were going through your summary, 
Dr. Westphal, you talked about some of the user fees. In 
looking over my summary, I saw the shoreline management program 
fees and the regulatory program funding. These are the only two 
that I would consider to be fee or tax increases. Were you 
referring to one of these when you were talking about your user 
fees?
    Dr. Westphal. No. We were talking about the harbor services 
maintenance.
    Senator Inhofe. I see. But couldn't these be characterized 
as fee increases, Mr. Davis?
    Mr. Davis. Yes, sir.
    Senator Inhofe. All right. We do want to look at those, 
because anything that affects a fee increase is something that 
gets our attention, of course.
    On Challenge 21, one of the problems I have with this, it's 
my understanding from the staff summary that we received, 
you're talking about a total, this bill over a 6-year period, 
$325 million. A cap would be $75 million. Let's say that an 
average project would be, I don't know, $30 million or 
something like that, I wouldn't have any idea.
    You're talking about a very limited number of projects, 
which I like, because I see that I think we're giving up some 
oversight by virtue of adopting this policy. I would ask you 
first if you would agree with that statement. We in the 
committee would be giving up some of the oversight to the Corps 
by allowing the Challenge 21 program to go into effect.
    Mr. Davis. Senator, that is part of the programmatic 
authorization. It would create a somewhat more streamlined 
approach to delivering projects to the community.
    I think your assumptions are correct, that in the 6-year 
period, there will be a very limited number of projects. We're 
guessing anywhere from 10 to 20 projects probably over the 6-
year period. In fact, we're viewing this as somewhat of a 
demonstration over a 6-year period.
    Senator Inhofe. Would you anticipate 2 years from now 
coming back to this committee wanting to expand that program?
    Mr. Davis. I don't think in 2 years. We do anticipate at 
about year four preparing a report back to this committee to 
disclose to you fully what we've done, the successes we're 
having, or the failures we're having, and work with you then to 
make any adjustments, either in terms of extending the program 
or changing the program.
    Senator Inhofe. My time is up, but I do want to monitor 
that program to see just what types of programs are out there 
and what oversight we might be giving up. So I'll be working 
with you to make that determination, and welcome aboard.
    Dr. Westphal. Thank you, Senator.
    Senator Warner. Thank you very much, Senator.
    Senator Wyden.
    Senator Wyden. Thank you very much, Mr. Chairman.
    I have three questions, and I'm going to be brief. Dr. 
Westphal, No. 1, I note in your testimony that you want to 
reduce the time it takes for harbor projects to actually get 
on-line. As you know, in our part of the world, the Columbia 
River project, the deepening of that channel, that's my No. 1 
concern as a new member of the Senate. It's our region's 
mainstream. It creates all the jobs all the way from the 
Willammette Valley to Montana and the Dakotas, jobs for exports 
and wheat and shipping.
    On the recently passed ISTEA legislation, Senator Graham 
has joined us and Senator Smith and Senator Chafee and I teamed 
up in a bipartisan way to create a process in ISTEA to 
streamline the administrative chores that are necessary to get 
these infrastructure projects completed.
    You haven't had time to review that, but my first question 
is, would you look at that and be willing to work with us on a 
bipartisan basis? Because I think what we did in ISTEA could 
really be a road map to getting your objective of shortening 
the time necessary to complete these projects.
    Dr. Westphal. Yes, Senator, it would be ideal to look at 
some models. If you have one in ISTEA, we will certainly look 
at that and work with it.
    Senator Wyden. You will have it this afternoon.
    Second question, with respect to the Corps' new agenda, and 
Mr. Davis was out there in Oregon working with us on it, have 
you given some thought to trying to move up the priority list, 
again, to shorten the timetable for projects, when a project 
has addressed major environmental concerns?
    For example, in our part of the world, on the Columbia 
project, we are engaged in a major wetland restoration effort, 
and an effort to improve a species habitat. Given the fact that 
the Corps is going to make those values more important in the 
years ahead, would you be willing to look at a kind of 
expedited, fast-track kind of process, so that you could create 
incentives for those areas that were willing to do heavy 
lifting in terms of environmental protection?
    Dr. Westphal. Yes, I think that would be an excellent 
opportunity to move ahead on some things that have a really 
huge national benefit.
    Senator Wyden. All right. The third area that I wanted to 
ask you about real briefly involves something that Senator 
Kempthorne and I and a number of Senators have looked at, and 
that's the question of the minimum dredge fleet in the Pacific 
Northwest. We have written to you all twice now, in August 1997 
and then in November 1997, offering our comments with respect 
to the minimum dredge fleet study. In the November 1997 letter, 
Senator Kempthorne and I and others said, ``We ask that the 
study include certain analysis to allow Congress to evaluate 
the Corps' recommendations regarding the future of the fleet. 
We ask that the analysis include an examination of 
responsiveness to routine and emergency dredging requirements, 
industry competitiveness, comparison of dredging costs and 
industry capacity.''
    Now, the northwest delegation, again on a bipartisan basis, 
has repeatedly been trying to get this information from the 
Corps. Do you all anticipate responding to us at some point?
    Dr. Westphal. Senator, I did not get a briefing on the 
dredging fleet. It was one of the few things that we just 
didn't have time in the last 2 days, since I've gotten 
confirmed. But I did ask about responding in the form of a 
study, and I understand a study is due this summer. Whether 
that study will address your specific concerns, I personally 
don't know. General Fuhrman may be able to address that.
    If not, I certainly will see to it, I'll get a copy of that 
letter and make sure that we're----
    Senator Wyden. We would very much like to have the data and 
analysis the Corps is using to develop these proposals. This is 
a safety and security issue, particularly for small ports in 
our part of the world. As you know, on the basis of some of 
these past audits, getting rid of this system, which really 
does meet our needs, and privatizing this completely, could 
really cause chaos in our part of the world. We would like to 
have a response, and have been waiting now many, many months 
for it.
    Having said that, Mr. Westphal, we wish you well, and have 
heard, as Chairman Warner noted, many good things about your 
experience. These issues are at the top of my agenda as a new 
member of the U.S. Senate. I look forward to working with you 
and I yield back, Mr. Chairman.
    Senator Warner. Thanks, Senator. I suggest that you drop 
the phrase ``new member.'' You've won your spurs in this 
outfit.
    Mr. Bond.
    Senator Wyden. May I ask a unanimous consent request, Mr. 
Chairman? I ask unanimous consent that my statement be made a 
part of the record, the questions of Senator Levin be submitted 
to the witnesses and they respond to them at a reasonable time, 
along with my questions?
    Senator Warner. Fine. You'll submit Senator Levin's 
questions on his behalf. I'll accept that, done.
    Senator Bond.
    Senator Bond. Thank you very much, Mr. Chairman, and I too 
ask that my full statement be made a part of the record.
    I want to join with you in welcoming Dr. Westphal, and I 
guess if Senator Inhofe has claimed him as an Okie, we would 
like to say also that we're very proud of the relationship 
we've had with him through the University of Missouri, and 
we're very pleased to see a man of his leadership and capacity 
in this position.
    Dr. Westphal, I guess I would be tempted to ask, if 
Congress adopted anything resembling the President's budget for 
water projects, would you recommend that he veto it? And I'm 
not going to ask that, because you shouldn't have to choose 
between loyalty and responsible common sense.
    Dr. Westphal. Thank you.
    [Laughter.]
    Senator Bond. I think that the measure of your job 
performance is going to be your independence from OMB. They 
know the cost of everything, but perhaps you could explain to 
them the value of some things.
    We have a project in Kansas City which protects industries 
employing 12,000 workers. And the Administration set up a 
budget which, if adopted, would send the contractors home next 
May, stop it right in the middle, cause tremendous cost 
overruns, as well as danger. It's not just dangerous, it's 
inefficient and more costly.
    They didn't just decimate structural flood control, but 
environmental programs as well. And I'm hearing about lots of 
problems, as Senator Inhofe mentioned, from constituents near 
Corps-operated lakes. They report that the rangers are blaming 
closures on congressional budget cuts, which as we all know is 
not true. That's not where the budget cuts are coming from.
    Dr. Westphal, I'm sending you a letter on the subject 
today, and I hope you can respond. We have social security aid, 
locks, and dams on the upper Mississippi River which must be 
modernized. We can all discuss how best to do it. But we all 
know that we have to do it without delay. If neglect continues, 
we will soon be in the unenviable position of trying to catch 
up with the water infrastructure of developing nations, who are 
really winning our markets.
    I have, as you indicated in your statement, and I thank you 
very much for the comment on it, a proposal that was worked out 
in what some have described as detente. Our good friend, Scott 
Faber, of American Rivers, the Corps of Engineers, the barge 
industry and the Missouri Farm Bureau, to improve the health of 
our waterways, the environmental well-being.
    But frankly, under a $3.2 billion budget, that was proposed 
by the Administration that couldn't be funded. We just can't 
operate that way. If the Administration wants the Congress to 
fund Challenge 21, they shouldn't send up a $3.2 billion budget 
next year.
    There are some in the body who oppose congressional 
earmarks because they argue budgeting should be left to 
professionals to exercise care and wisdom, in the absence of 
politics, to formulate responsible budget priorities. As long 
as this budget is written by OMB with the Corps gagged and 
sitting on the sidelines, that argument remains at best 
laughable.
    So let me ask you a question that all of my colleagues at 
agriculture are interested in, we think American agriculture 
can be very competitive in the world market, we can do our 
share and gain the revenues if we are competitive. But we can 
only be competitive if we maintain our efficient, 
environmentally friendly river transportation system.
    Can you envision maintaining our export capacity without 
modernizing locks and dams on the upper Mississippi River?
    Dr. Westphal. Senator, I think we have to modernize and 
improve and work and do the best we can to do the best job 
possible to maintain our entire system operating, the upper 
Mississippi and lower Missouri, lower Mississippi, everywhere. 
And I certainly will work hard to assure that that 
modernization takes place in a timely manner by working with 
OMB to avert these types of budget crises in the future, and 
come up, work with this committee, work with the Congress, the 
House and the Senate, to produce a budget next year that I 
think can get us on a stable road toward the proper management, 
upkeep, modernization of our system nationwide.
    Senator Warner. Senator Bond, I'm sorry to interrupt. I 
have to go to the floor, I'm co-managing the annual 
authorization bill on Defense. I will return. Can you take my 
place for a while?
    Senator Bond [assuming the chair]. Mr. Chairman, can I look 
around and see who's left?
    Senator Warner. It's interesting, this year's budget was 
$1.3 billion, the request was $740 million and the 
appropriations committee moved it up to $1.2 million. But 
therein lines the challenge in the allocation of these funds.
    Had the Senator from Missouri completed?
    Senator Bond. Mr. Chairman, I like the sound of Dr. 
Westphal's last response, so I won't push him. We hope that you 
do have the independence to fight for the kind of funding that 
anybody who takes a responsible look at the condition of our 
locks and dams knows that we must have.
    And with that, let me turn to our distinguished Senator 
from California, Senator Boxer.
    Senator Boxer. Thank you so much, Senator Bond, and 
welcome, everybody.
    I want to just say that the Corps has come such a long way 
in the way it views these projects, and I've had so much 
experience, both as a local elected official and Member of 
Congress and now of the Senate. When the Corps used to come in, 
the community was always very nervous about these huge walls 
and concrete ditches. Now we're working with you and NAPA to 
create a wonderful way to control flooding.
    Of course, after El Nino we have to move. Cordo Madera 
Creek was stopped, the flood control project there, for 25 
years, because the community wasn't going to go with a big 
concrete ditch. So we're moving in the right direction.
    I like Challenge 21, because it recognizes this, and it 
officially recognizes this. The point is, what we can do is 
more environmentally friendly projects that work very well, 
that cost less. And as you point out, bring in the local 
people, so that we're all making these decisions, not a top-
down kind of decisionmaking.
    So with that as a preface, I want to thank my colleagues, 
in addition to you, for helping us in 1996 in the WRDA bill to 
plan for protection for the Sacramento area. And I want to just 
take a moment until my time expires, perhaps, talking about 
this important project.
    Sacramento, our State capital, is located at the confluence 
of both the Sacramento River, flowing from the north, and the 
American River, which cascades from the High Sierra mountains 
from the east. There are 400,000 residents, 130 schools, 5,000 
businesses located in the flood plain, and $37 billion worth of 
property at risk. The most likely cause of a flood would be a 
breach in the American river levees, which could inundate 
55,000 acres.
    Now, given this situation, there's been a great deal of 
concern from the community. Because the damages from even a 
100-year flood will be comparable to the 1989 Loma Prieta 
earthquake, which caused 63 deaths, almost 4,000 injuries and 
$8 billion in direct property damage.
    Now, we know we have to do something, and therein was the 
challenge for the community. And of course, it's California, a 
big argument about exactly what to do.
    I am pleased to tell you that the community has moved 
toward an agreement here. And that agreement is reflected in 
this budget, because although I am also not happy with the 
amounts, I would concur with my distinguished friend from 
Missouri. We are moving to fund the American River project, 
which is called a step release plan, and we are saying no to an 
enormous Auburn Dam project which would take place on an 
earthquake fault, would cost between $1 billion and $2 billion, 
compared to a $400 million project. And in terms of a 400-year 
storm event, wouldn't do any better than the step release 
project that we're putting forward.
    We still have a few people, I say to my friends here, who 
want to see the Auburn Dam built. I am not going to come to my 
colleagues and ask you to fund this kind of a project. We can 
do flood protection, very good flood protection, for less, and 
we can do it in a way that doesn't destroy the environment. So 
I am very pleased that the Administration's proposal reflects 
this new consensus, the local electrics all agree with this.
    As I say, there are some who believe the Auburn Dam is the 
answer.
    I lay this out here, because there could be some future 
debate on the floor of the House on this. We have a divided 
congressional delegation on it. But it's going to be an 
interesting debate.
    So what I would like to do is ask that my full statement be 
placed in the record at this time, and as I have a couple of 
minutes left----
    Senator Bond. Without objection, your full statement will 
be included, Senator Boxer.
    Senator Boxer. Thank you, Mr. Chairman.
    Without going through all these questions, I'm going to 
submit some for the record, I want to ask this question. The 
American River Project in the Administration's bill calls for 
raising and strengthening the downstream levees on the American 
River. Based on the Corps of Engineering's experience, do you 
believe the Corps can safely construct the step release plan to 
provide the intended level of flood protection?
    Dr. Westphal. Yes, I do. We're pretty confident about that.
    Senator Boxer. General, do you agree with that?
    General Fuhrman. Yes, we can safely construct those levees.
    Senator Boxer. Excellent.
    I have a question on the Maritime Infrastructure Bank, very 
quickly. I know that the Corps and the OMB are working on ways 
to prepare a proposal to finance navigation and other 
improvements at our major ports dealing with international 
trade.
    Will this plan include assistance for medium-size ports and 
small craft harbors which contribute to regional economic 
development? If it does not, will you work with me in looking 
at the California Maritime Infrastructure Bank? Because we do 
have that in our State, and we really need to help some of 
these smaller harbors. California is going to grow another 18 
million people. We are the point of the Pacific Rim trade. 
Would you respond to that?
    Dr. Westphal. Senator, I'll be delighted to work with you 
on that. I think that's a very important priority.
    But I cannot tell you right now exactly what the plan will 
do with respect to the small harbors.
    Senator Boxer. When will you have the answer?
    Dr. Westphal. We are under such, it's such a complex issue 
and there's so much study going on in our analysis, I think it 
will be several weeks before we get something to the committee. 
But as soon as we do, I will be glad to work with you on it.
    Senator Boxer. Thank you very much.
    Senator Bond. Thank you, Senator Boxer.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman.
    First, I have an opening statement that I would like to 
submit for the record.
    Senator Bond. Without objection.
    Senator Graham. Thank you, Mr. Chairman.
    My questions are going to focus on two areas. First, is the 
Florida Everglades, and second are shore protection issues. One 
of the innovations in the WRDA bill of 1996 was the 
establishment of a concept called the Everglades and South 
Florida Ecosystem Restoration Critical Projects, which was a 
means of approaching projects which were urgent but which 
required additional scientific exploration before they were 
finalized. This committee agreed under certain conditions to 
allow these projects to go forward without the type of formal 
authorization project by project that is normally utilized.
    In the 1996 bill, there were some 100 potential projects 
that were submitted as possible critical projects in the 
Everglades. Those were narrowed down to 35, which were actually 
approved in the legislation. There were caps imposed on those 
projects, including a global cap of $75 million.
    That global cap has been largely exhausted with 12 of the 
35 projects having been undertaken. There are now proposals to 
provide additional funding, so that the balance of those 35 
projects could be funded as well as, I believe there may be 
recommendations for two to five additional projects to be added 
to that original group of 35.
    So I guess my question is, have you reviewed this matter, 
and if so, do you have a recommendation as to what 
authorization would be needed for the projects, those that were 
not funded in the last 2 years, and those that might be added 
to be implemented, and what would be an appropriate time 
extension of the program authority in order to complete these 
critical projects?
    Dr. Westphal. Senator, I have not had time to fully review 
this. And to give you a really complete answer, let me turn to 
the Deputy Assistant Secretary, Michael Davis, who has worked 
on the task force.
    Senator Graham. Thank you.
    Mr. Davis. Senator, I think under the existing legislative 
framework that you gave us in 1996, we have to have at least a 
1-year extension of the authority to take advantage of this 
whole $75 million Federal funding that would be available for 
critical projects. As you said, we currently have about 14 
projects under review, 10 of those have been approved and are 
moving forward. Roughly the top 12 of those would exhaust that 
$75 million.
    So as you indicated, there is a list of 35. We would only 
get through the first 12 under the current $75 million limit.
    Senator Graham. So I guess the question is, do you have a 
recommendation as to what additional authorization levels 
should be provided for those critical projects that will be 
initiated during the next 2-year period, and second, a 
recommendation as to the time of extension for those additional 
projects?
    Mr. Davis. If the funding limit remains at $75 million, we 
believe that 1 year would be an appropriate extension. If we go 
beyond that, then that would be commensurated with the amount 
of money, of course. If you recall, in 1996, the Administration 
submitted a bill that asked for $150 million critical projects 
program. So while we haven't gone through the formal clearance 
process within OMB and the Administration, I suspect the 
Administration would continue to support limits up to that 
amount.
    Senator Graham. I would like to ask if you would raise 
those issues with the Administration, so that we could have 
their current recommendation. I know the priority that the 
Administration has placed on Everglades restoration. There is a 
strong sense of urgency, of moving forward.
    We've gone from a winter situation in which we were dealing 
with a flood, and now we're into summer, dealing with a 
drought, both of which indicate the fragility of that important 
national treasure, and the need to restore the natural 
conditions to the maximum extent possible at the earliest 
possible date. And these critical projects have that as their 
common objective.
    The second area is related to shore protection. There have 
been some indications that the Administration may be reviewing 
its prior policy of ``no new starts'' for shore protection 
projects. Could you comment as to whether the Administration 
intends to reverse its previous ``no new starts'' policy and 
include shore protection projects along with navigation, flood 
control and environmental restoration as major program areas 
for which the Administration will recommend budget authority?
    Dr. Westphal. Yes, Senator. I think the language in the 
legislation would essentially put shore protection on a par 
with these other projects. And it's not intent on not 
recommending new starts.
    Senator Graham. What?
    Dr. Westphal. It is not intent on saying, ``no new starts'' 
on shore protection.
    Senator Graham. Well, that's very good news. I know it's 
good news shared by all the members of the committee who 
represent areas that are affected by this, and the constituents 
of Senator Bond, who want to come and take advantage of good 
restored coastal areas.
    [Laughter.]
    Senator Bond. Thank you very much, Senator Graham.
    Senator Lautenberg.
    Senator Lautenberg. Thank you, Mr. Chairman, briefly a 
couple of things.
    No. 1, in reference to Senator Graham's inquiry, and 
welcome, Secretary Westphal, we'll skip the Assistant and all 
that kind of stuff. And that is, that to recognize shore 
restoration projects for what they really are, when one talks 
about flood control, it's fairly easy to see that it's 
protection of life and property and economy and so forth.
    But it's no different with shore protection. These are 
virtually, in my view, the same thing. The coastal States have 
the same concern about their coastline as those States more 
inland have concerns about floods, etc. Therefore, as far as 
I'm concerned, the priorities ought to be just about the same. 
Because ultimately, the economy of these areas, the economies 
are very seriously affected if there is virtually no sand 
replenishment, no restructuring of the shoreline facilities.
    So I hope, Dr. Westphal, that that will be kept in mind as 
this legislation develops. And I want to ask one question, that 
is, what is the differentiation between the difference in 
Federal share for the 50-year renourishment programs and that 
which is 65 percent non-Federal, as I understand it, and 35 
percent local, as opposed to the 65 percent Federal, in one 
case 65 non-Federal and another.
    Who there can give me just a quick understanding of which 
falls into place at what time?
    Dr. Westphal. For the initial project, it's 65 Federal 
share. For the periodic nourishment, it comes in the out years, 
it would be a 65 non-Federal cost share.
    Senator Lautenberg. So if it's a new project, one that 
hasn't been treated before, it's 65 percent non-Federal?
    Dr. Westphal. Sixty-five percent Federal.
    Senator Lautenberg. Sixty-five percent Federal.
    Dr. Westphal. Of the initial construction, the initial 
construction project.
    Senator Lautenberg. Right.
    Dr. Westphal. New start, 65 percent Federal, 35 percent 
non-Federal.
    Senator Lautenberg. And thereafter, the updates are at a 
different ratio?
    Dr. Westphal. Right.
    Senator Lautenberg. I'm interested in the non-structural 
alternatives to flood control. That's a very, I think, 
interesting approach to how we solve the problem longer term. 
And the idea is gaining popularity in my State, New Jersey.
    How do we move along these projects that are already 
authorized by the committee, already in the planning stages, 
and while supporting some of these new approaches, it presents 
kind of a dilemma as to where the priorities fall?
    Dr. Westphal. I think, Senator, the non-structural approach 
is a growing approach, as we look at flood issues, not so much 
in terms of flood control now as we look at them in terms of 
preventing flood damages. So as we look at opportunities to 
save billions of dollars in losses and to save lives and to 
work out ways in which we can also protect and enhance 
environment and security of people, we're turning more and more 
to non-structural types of opportunities. Challenge 21 is a way 
of beginning that process.
    But that's not to say that in situations we must continue 
to have the structural ability to protect the communities and 
cities and towns and farms and people's livelihoods and lives 
through structural methods. We will continue along both paths, 
and where it's feasible to do one, we'll try to do it.
    I don't believe that the Administration is following one 
path over the other. I think we're trying to do it in an even 
and balanced way.
    I think the non-structural opportunities, I think also work 
well with the whole set of priorities that the Administration 
has placed on emergency response disaster relief with FEMA and 
its programs. I think it allows us to work with them very well, 
and in a very consistent and very deliberate fashion to bring 
about some reduction in the amount of damage that our 
communities can sustain.
    Senator Lautenberg. Thanks, Mr. Chairman.
    Senator Bond. Senator Lautenberg, I see that there is a 
vote, it has already started. Senator Graham, do you want to 
ask questions of this panel before we leave?
    Senator Graham. If I could, Senator, it will be short, and 
it will be more in the nature of a concern.
    Senator Bond. I tell you what, Senator Graham, you will 
have the gavel, stay as long as you want. Then you might excuse 
and recess the hearing until the chairman can return and 
introduce the next panel.
    Senator Graham. We will take final action on the WRDA bill 
before----
    [Laughter.]
    Senator Bond. Yes, right. Thank you, Dr. Westphal.
    Senator Graham [assuming the chair]. Dr. Westphal, I was 
remissed in not expressing my pleasure that you are going to be 
filling this position. I have had an opportunity to work with 
the Corps of Engineers for a number of years, and have been 
impressed with the quality and professionalism of the Corps, 
and the Corps' growing recognition of the challenge of 
preserving our environment while it meeds some of our 
traditional protective needs, such as for flood control. I'm 
certain that you and those who join you today will continue to 
enhance that proud tradition.
    One concern that I have is the President's proposal for 
Challenge 21 initiatives. I think the program of hazard 
mitigation has a great deal to recommend it. My concern is 
fiscal, and that is, with the recommendation for an 
authorization level of $325 million, will there be a 
commensurate increase in the recommended budget authority for 
the Corps of Engineers, or will this $325 million become a 
competitor with existing Corps commitments for future funding? 
Could you enlighten us as to how you see this relating to the 
overall existing program and commitments of the Corps?
    Dr. Westphal. I believe the program is seen essentially as 
another way of addressing the issue of flood damage reduction, 
much the same as you would look at building a levee or another 
structural means of flood control or flood prevention. So in 
that regard, I think it is treated as just another tool used by 
local communities to address a very serious and dangerous 
problem, where it's relevant to address it.
    The Corps has asked each of the divisions to come up with 
examples of projects that could work well with this type of 
approach, and they have submitted a number of examples, so I 
think we're ready to begin with that. But I don't think that it 
unfairly competes with anything else that would be required in 
another community that would be of a structural nature.
    Senator Graham. So are you saying that if there has already 
been a decision made that there will be some Federal role in a 
particular geographic area for flood control that this will 
fund one of the alternative means of achieving those 
objectives?
    Dr. Westphal. Well, Senator, remember, the Challenge 21, 
the whole idea of this program is to assure that local 
communities have a say in what types of approach is taken. It's 
a cost-shared project just like any other project. So the 
communities must decide whether they want this non-structural 
means or whether they want something else. And they're going to 
be footing part of the bill, they're brought into the picture 
directly as a participant and a decisionmaker in what kind of 
method they're going to use.
    Senator Graham. Would one of the sanctioned tactics for 
Challenge 21 be land acquisition?
    Dr. Westphal. Yes. But again, as this is a community 
decision, it would be cost-shared. Yes.
    Senator Graham. I might say, I'm a strong believer in 
riverine protection by acquisition, and am proud of the fact 
that the State of Florida has had an aggressive program of 
acquiring the flood plain of many of its major rivers. I doubt 
that there is a major river in the United States which has as 
much of its flood plain in public ownership as does the 
Appalachicola River, for instance. And by doing that, the 
circumstances which then lead to the necessity for public 
intervention after the disaster, such as replacing structures 
that were inappropriately located in that flood plain, has been 
significantly mitigated.
    So I support this principle, and look forward to learning 
more about the details of how it's going to be implemented.
    I'm afraid that I'm going to have to leave for the vote. 
Therefore, I will take the great authority that has been vested 
in me to temporarily adjourn the meeting until we return after 
the vote is completed.
    Thank you.
    Dr. Westphal. Thank you, Senator.
    [Recess.]
    Senator Kempthorne [assuming the chair]. Please take your 
seats so we can continue this hearing. And would the next panel 
of very good witnesses come forward.
    I'll explain to all of you, the reason you're seeing 
musical chairs up here, we have the Defense bill, a number of 
us are on the Armed Services Committee as well as on this 
committee. So we're shuttling back and forth. Senator Warner 
asked me if I would convene the second panel, so that we could 
begin taking your testimony. And Senator Warner will be here 
momentarily. So I appreciate this, and appreciate your 
understanding of that.
    Our second panel consists of Mr. Kurt Nagle, president, 
American Association of Port Authorities; Mr. Scott E. Faber, 
who is the director of Flood Plain Programs, American Rivers; 
Honorable Louisa M. Strayhorn, councilwoman, Virginia Beach, 
VA; Mr. Grover Fugate, executive director, Rhode Island Coastal 
Resources Management Council; Honorable Kenneth Pringle, Mayor, 
Borough of Belmar, Belmar, NJ; and Mr. Stephen Higgins, Beach 
Erosion Administrator, Broward County, FL.
    With that, Mr. Nagle, would you like to begin.

STATEMENT OF KURT J. NAGLE, PRESIDENT, AMERICAN ASSOCIATION OF 
                        PORT AUTHORITIES

    Mr. Nagle. Thank you, Senator Kempthorne.
    Good morning. I'm Kurt Nagle, president of the American 
Association of Port Authorities. AAPA represents the public 
port agencies throughout the western hemisphere. My remarks 
today reflect the views of AAPA's U.S. delegation.
    AAPA commends you and this committee for convening this 
hearing on the Water Resources Development Act of 1998. Also, 
I'd like to thank the members of this committee for their 
strong leadership earlier this year on TEA 21. As you know, TEA 
21 marks the next step in the development of a truly intermodal 
transportation system as new policies are put in place to 
address the growing need for efficient freight movement from 
ports to highways and railways.
    This Nation's public ports are partners in this effort to 
develop a truly intermodal transportation system. If I leave 
one message with you today, it is that ports and all who 
benefit from the services we provide depend on biennial passage 
of water resources legislation as well as continued adequate 
annual appropriations levels.
    Navigation projects are our Nation's highways to the 
international marketplace. As you know, the Federal investment 
in improvements to our Nation's infrastructure is matched by a 
local share, as well as a very substantial local investment in 
landside terminal facilities. These investments generate 
significant economic returns at the local, regional, and 
national levels.
    All of the benefits that justify inclusion of navigation 
projects in the water resources bill are national economic 
development benefits. In my testimony today, in addition to 
stressing the importance of passing a water resources bill this 
year, I'd like to stress four points.
    First, the need to continue to review and improve the 
partnership between the Corps of Engineers and the ports forged 
in WRDA 1986. Second, the port industry's alarm at the 
President's fiscal year 1999 budget request as it relates to 
investment in our Nation's deep draft harbors. Third, the need 
to ensure continued funding for maintenance dredging in light 
of the Supreme Court decision ruling the harbor maintenance tax 
unconstitutional as it applies to exports. And fourth, the need 
to continue to review and improve dredge material management 
policies and practices to avoid costly delays in dredging 
projects, ensure the protection of the environment, and gain 
additional benefits to the Nation.
    The enactment of the Water Resources Development Act and 
Federal investment in navigation is of critical importance to 
the Nation's economy. If projects are not authorized, the 
national benefits, as well as regional economic diversification 
and job creation opportunities, will be delayed.
    I would like to address some of the policy changes that 
U.S. ports would like to see included in this authorization 
bill. First, AAPA believes that Congress should revise the 
cost-sharing formula to adjust the upper cost-sharing threshold 
to reflect the changes that have happened in the general cargo 
fleet over the last 12 years.
    The fact is that in the years since the cost-sharing 
formula was established in 1986, the container ship fleet has 
undergone a major evolution. The world's major ocean carriers 
have greatly increased the size of vessels and the number of 
large ships that they deploy. A recent Maritime Administration 
report documents the trends in general cargo ship design and 
their impact on transportation infrastructure. The report finds 
that by the year 2010, one-third of containerized cargo will be 
transported on vessels carrying more than 4,000 20-foot 
equivalent units, or TEUs.
    AAPA therefore believes that the norm for general cargo 
navigation channels will be as great as 53 feet. And we ask 
that the cost-sharing formulas in WRDA be amended so that the 
60 percent cost share should be triggered at 53 feet, rather 
than the current 45 feet, to reflect the changes in these 
vessel types and sizes.
    In our written testimony we identify additional 
recommendations for policy changes that will simplify and 
streamline the partnership between the Federal Government and 
the Nation's public ports.
    Let me turn to the Administration's proposed budget request 
for the Corps of Engineers, which is nothing short of a 
disaster for deep draft navigation projects. The proposed 
budget seeks appropriations for investments of only $40 million 
in fiscal year 1999 for new construction of deep draft 
projects. This amount is only 12 percent of what is needed to 
fund ongoing and authorized new projects.
    We appreciate the Senate's leadership in passing an annual 
appropriations bill for the Corps of Engineers that restores 
more than $140 million in needed funding for harbor 
improvements over that proposed by the President.
    With regard to the harbor maintenance tax, AAPA is greatly 
concerned that given the Supreme Court decision to strike down 
the tax as it relates to exports, the Federal Government must 
continue to ensure that maintenance dredging continues 
uninterrupted. AAPA members believe that, as was the case prior 
to 1986, maintenance dredging should be funded from general 
revenues. There is no user fee system that can equitably raise 
revenues from the users of navigation channels in any 
reasonable relation to the distribution of benefits to the 
entire Nation.
    Many options were considered by the Congress in developing 
the ad valorem harbor maintenance tax funding mechanism for 
maintenance dredging back in the early to mid 1980's. 
Unfortunately, the only option to survive the debates, the 
harbor maintenance tax, the ad valorem fee, was found 
unconstitutional by the Supreme Court. It does not appear that 
there are significant new or old options that would work better 
today.
    I would also like to submit for the record, if I might, a 
white paper on the maintenance dreding issue and why treasury 
funding is appropriate.
    Senator Kempthorne. Without objection.
    [The white paper follows:]
 Federally-Funded Maintenance Dredging: Sustaining America's Access to 
                               the World
                              introduction
    The U.S. Supreme Court issued a short, unanimous decision in March 
1998 finding the Harbor Maintenance Tax (HMT) unconstitutional as 
applied to exports. The decision states that the HMT is a tax, not a 
user fee, because the ad valorem tax is not a fair approximation of 
services, facilities or benefits furnished to the exporter. The Court 
said that in order to be a user fee, the connection between a service 
the government renders and the compensation it receives for that 
service must be closer than is present in the case.
    The HMT was enacted by Congress in 1986 to recover 40 percent of 
the cost of maintenance dredging in the Nation's deep-draft navigation 
channels. Previously, such dredging expenses were paid for entirely out 
of the General Treasury. In 1990, Congress more than tripled the HMT to 
recover 100 percent of maintenance dredging expenses. This paper 
describes why the maintenance and improvement of navigation channels 
has historically been a Federal responsibility and suggests a number of 
reasons why the Federal Government, through appropriations from the 
General Treasury, should resume responsibility for funding maintenance 
dredging.
             why is there a federal interest in navigation?
    Waterborne commerce has been key to the growth and security of the 
Nation since colonial times. The Founding Fathers knew that only 
through active commerce, an extensive navigation system, and a 
flourishing maritime industry would the new nation survive against 
foreign powers. Such systems were also viewed as essential to holding 
the several States in union. Consequently, the Constitution vested with 
the Federal Government sole jurisdiction to regulate interstate and 
foreign commerce. The Supreme Court has held that Federal supremacy in 
the regulation of commerce includes ``navigation within the limits of 
every State in the union; so far as that navigation may be, in any 
manner, connected with `commerce with foreign nations, or among the 
several States . . .' '' (Gibbons v. Ogden, 53 U.S. at 457,13 L.Ed. at 
1064).
    Since the birth of our Nation, Congress has authorized and funded 
activities to ensure free and open access of the Nation's waterways to 
navigation. In 1789, Congress authorized the first navigation channel 
improvement projects. The General Survey Act of 1824 established the 
U.S. Army Corps of Engineers as the agency responsible for the Nation's 
navigation system. Since that time, the Federal Government has 
consistently exercised its power to develop and maintain a navigation 
system for the benefit of the whole nation.
Trade Benefits
    Today, safe and efficient navigation is just as important as it was 
in colonial times. The entire U.S. economy depends on an efficient and 
reliable transportation system to remain competitive in domestic and 
international markets. International trade's impact on the U.S. Gross 
Domestic Product (GDP) is growing dramatically. In 1970, trade 
represented only 13 percent of U.S. GDP. By 1996, trade had grown to 
account for 30 percent of GDP, or about $2.3 trillion. More than 11 
million U.S. jobs now depend on exports--1.5 million more than just 4 
years ago. Significantly, jobs supported by goods exports wages are 13 
to 17 percent higher than non trade-related jobs in the economy.
    Navigable channels, railways, highways, and ports are links in the 
transportation chain that allow manufacturers, buyers, and sellers to 
send and receive goods quickly, safely, and efficiently. The resulting 
benefits are ready access to a wide variety of products and services, 
internationally competitive exports, and lower costs for consumers. 
Maintenance of deep-draft navigation channels is a key component of an 
efficient national transportation system, and increasingly so as larger 
and larger vessels are built.
    To maintain and improve our inland transportation system, the 
Federal Government spends nearly $35 billion per year on projects 
authorized under the Intermodal Surface Transportation Efficiency Act. 
Federal spending for maintenance dredging of navigation channels is 
only about $500 million.
    All ports and Federal channels serve multi-State needs. The foreign 
trade activities of each State are supported by a variety of ports both 
within and, more often, outside the State. On average, each State 
relies on between 13 to 15 ports to handle 95 percent of its imports 
and exports. The goods from 27 States leave the country through the 
ports in Louisiana alone. Midwestern grain supplies the Pacific rim 
market through ports in the Pacific Northwest. Imported crude oil 
refined in New Jersey and Pennsylvania reaches consumers on the entire 
East Coast--from Maine to Florida. Steel that travels to major 
Midwestern industrial centers is delivered cheaply and efficiently 
through Great Lakes ports. Ports on the West Coast handle goods such as 
cars, computers, and clothing, which are destined for consumers 
throughout the country.
    Many of this country's export products are price-sensitive 
commodities which require well developed and maintained navigation 
channels to remain competitively priced in international markets. For 
example, 95 percent of U.S. coal exports leave the country through U.S. 
deep-draft ports. For each foot of draft not dredged, shippers carry 
less product--making each voyage less efficient and more costly. 
Maintaining a channel at 43 feet instead of 44 feet may mean the 
difference of 750 fewer tons of coal loaded on a single ship, often 5 
percent of a ship's total cargo potential.
    Because shipping contracts can hinge on a few tenths of a cent per 
bushel of grain or ton of coal, transportation costs can be the 
deciding factor for foreign buyers choosing between American or foreign 
bulk products. Without access to efficient waterborne transportation, 
U.S. bulk commodities could not compete in international markets.
Safety and Environmental Benefits
    In the same way that highways are plowed clear of snow and ice in 
the winter, more than 90 percent of the Nation's top 50 ports in 
foreign waterborne commerce require regular maintenance dredging. 
Together these ports move nearly 93 percent of all U.S. waterborne 
commerce (by weight) in a given year. Without dredging, many port 
facilities and navigation channels would be rendered non-navigable in 
less than a year. For example, it is not uncommon for a river to 
accumulate sediment at a rate of 5 to 6 feet a year. Without routine 
dredging, areas of the navigation channel could change from 40 to 35 
feet in 1 year. Such a dramatic change would prohibit many ships from 
entering the channel or force ships to carry only a fraction of their 
intended load.
    Making waterways safe for navigation is another important national 
benefit of routine maintenance dredging. Channels that accumulate 
sediment become dangerous because they increase the risk of ships 
running aground. Groundings are expensive not only in cargo and time 
lost, but groundings may also pollute the environment if ships' hulls 
are breached and cargo is spilled. Well-maintained channels eliminate 
any surprise shoalings or buildups that may cause mishaps harmful to 
the environment.
    When waterways are not regularly dredged, ships may have to be 
lightered--that is, they have enough cargo transferred to or from 
vessels of lesser draft so that the primary ship is light enough to 
transit the harbor safety. Aside from the additional handling costs 
associated with the practice, lightering bulk liquids increases the 
chance of spillage and pollution. That environmental risk could be 
avoided if the primary vessel could unload all of its material at the 
port.
National Defense Benefits
    In the late 18th century, the new Congress also recognized the 
importance of Federal responsibility over navigation for the critical 
role it plays in our Nation's defense. That role has never been more 
apparent than during the loadouts of military cargo and personnel 
during Operation Desert Shield/Desert Storm. The huge buildup of U.S. 
forces in and around the Persian Gulf would have been impossible 
without the modern facilities and strong support provided by America's 
commercial ports.
    According to the U.S. Military Traffic Management Command (MTMC), 
between August 1990 and march 1991, MTMC loaded 312 vessels and more 
than 4.2 million measurement tons of cargo at 18 U.S. ports for 
delivery to the Persian Gulf in support of Desert Shield/Desert Storm. 
Approximately 50 ports have agreements with the Federal Government to 
provide ready access for national emergency purposes.
         developing ports and harbors is a shared reponsibility
    U.S. port development and maintenance is a shared responsibility of 
Federal, State, and local governments, with extensive private sector 
participation. Under this relationship, rooted in the U.S. 
Constitution, the Federal Government maintains harbor access channels, 
while individual ports construct and maintain the landside terminal 
facilities, dredge their own berths, and contribute to channel 
improvement cost-sharing programs. Relying in good faith on this long-
standing partnership, local port authorities have spent over $16.8 
billion since World War II and expect to spend an additional $1.3 
billion annually to construct and maintain the landside facilities over 
the next 5 years.
    In addition, local ports fund a share of Federal navigation 
improvement projects, either 35 percent or 60 percent depending on 
depth. Investment decisions made by the Federal Government, local ports 
and the private sector have been based on the expectation that the 
Federal Government will continue to fund maintenance dredging. These 
local investments have created the system of ports the Nation relies on 
to meet its national defense needs and growing international trade.
    Although the Federal Government traditionally funded maintenance 
dredging of Federal navigation channels from General Treasury revenues, 
in 1986, Congress created the Harbor Maintenance Trust Fund to pay for 
a portion of channel maintenance dredging. Revenue for this trust fund 
is generated by assessing a fee (the ``Harbor Maintenance Tax'' or HMT) 
on the value of export, import and domestic cargo moving through the 
nation's deep draft ports. At the same time, local cost-sharing was 
instituted for funding new construction projects (widening and 
deepening) projects. By contrast, on the inland waterways, operations 
and maintenance costs are paid out of the General Treasury and new 
construction costs are funded, in part, by an inland waterways fuel 
tax.
    The cost sharing enacted in 1986 passed Congress after a lengthy 
impasse over water resources development policy. Although the benefits 
are clearly national in scope, the HMT and cost-sharing reforms were 
instituted in an effort to recover the cost of maintenance dredging 
from navigation channel users. The Supreme Court ruled HMT is not a 
true user fee and is, thus, a tax applied unconstitutionally against 
exports. Exports are protected from taxation in the Constitution 
because of their importance to the health of the Nation.
   why the federal government should fund maintenance dredging from 
                            general treasury
    Maintenance dredging should be funded from the General Treasury, as 
was the case before 1986. There is no user-fee system that can 
equitably raise revenues from the users of navigation channels in 
reasonable relation to the distribution of benefits to the Nation. Many 
options were considered in developing the ad valorem HMT funding 
mechanism for maintenance dredging. Unfortunately, the only option to 
survive the debates from 1981 to 1986, the HMT, was found 
unconstitutional by the Supreme Court. It does not appear that there 
are significant new or old options that would work better today.
    The assessment of a tonnage fee on cargo or vessels would severely 
affect bulk commodities, such as grain or coal, which compete in 
international markets where pennies a ton can make or break a sale. 
These shipments, which are amongst our Nation's leading export 
products, now use the most cost-effective route--typically moving by 
barges down rivers to coastal harbors. Those harbors, in turn, tend to 
require significant maintenance dredging because of the river sediment. 
In general, dredging demands related to the shipping of these types of 
export products are greater than those related to import products.
    Another alternative considered would have required local ports to 
raise their own funding for maintenance dredging. Such a change could 
pit U.S. ports against each other, the result of which could impact 
commerce and national security. The concept also alters the fundamental 
Federal role in maintaining the national navigation system. Like a 
tonnage tax, local funding, if passed on to port users, could increase 
transportation costs, pricing bulk commodities out of international 
markets either through increased charges at the currently utilized 
port(s) or by increasing inland transportation costs due to diversion 
from the inland waterway system.
    Recognizing that these options could be injurious to the nation's 
trading position, and to individual ports, Congress in 1986 chose to 
enact a uniform ad valorem tax on cargo. By applying a uniform fee on 
all cargo moving through any port in the country, the tax did not 
affect the competitive position of any port. (This is true relative to 
U.S. ports, but ignores the fact that cargo has been diverted to 
Canadian ports to avoid paying the fee.) Congress intended to minimize 
the potential negative effect on export competitiveness, and minimize 
the diversion problem by setting the fee fairly low, at a level to 
collect 40 percent of the dredging costs. However, in the 1990 budget 
agreement, Congress tripled the fee, and a $1.2 billion surplus has 
accumulated in the trust fund. Prior to the Supreme Court decision, the 
surplus had been expected to reach nearly $2 billion by the end of 
fiscal 1999.
    The HMT ultimately added hundreds of dollars to the cost of 
shipping a single container of high value cargo, and has caused traffic 
to be diverted to non-U.S. ports to avoid payment. The imposition of 
the HMT caused a rail-barge service on the Great Lakes to go out of 
business.
    Other options for raising revenue from direct users of the 
navigation channels are not likely to produce sufficient funds. In 
addition, direct navigation users are already significantly taxed. A 
1993 General Accounting Office study found that 12 Federal agencies 
levy 117 assessments on waterborne trade. In 1996, receipts from these 
fees were 154 percent of the level raised only 10 years earlier, making 
our exports more expensive and less competitive in international 
markets.
    Customs revenues in fiscal year 1996 totaled $22.3 billion, of 
which roughly 70 percent (or $15.6 billion) is attributable to cargo 
moving through seaports. These funds, currently collected from users of 
navigation channels, are more than 31 times greater than the cost of 
maintenance dredging (approximately $500 million). Expected increases 
in customs collections due to increased trade would likely be enough to 
pay for maintenance dredging.
    As described above, benefits of safe and efficient trade provided 
by a nation's system of navigation channels are spread throughout the 
country. In addition, the benefits to the Nation resulting from 
national defense, commercial fishing, and recreational users are 
immeasurable; assessing fees on these users, however, was not part of 
the 1986 HMT funding mechanism. The burden for raising funds to pay for 
dredging should be spread across the whole nation because all our 
citizens benefit.
                               conclusion
    Since the first wooden vessels arrived on our shores, this nation 
has relied on and prospered because of its access to water and thereon 
to the rest of the world. Both economically and strategically, there 
are no greater national assets than our ports and Federal navigation 
channels--our water connections to the global marketplace and means of 
national defense.
    Until 1986, the Federal Government fully funded the maintenance of 
our Nation's navigation channels, maintaining a partnership with State 
and local port authorities. Local port agencies have invested billions 
of dollars in landside terminals to develop the array of ports along 
the sea coasts, Great Lakes, Alaska, Hawaii, Puerto Rico, Guam and the 
U.S. Virgin Islands.
    The HMT, instituted in 1986 to recover first 40 percent, then 100 
percent (and more) of dredging maintenance costs, has been ruled 
unconstitutional by the U.S. Supreme Court. Based both on this decision 
and the rancorous debate during the 1980's, any alternative trade tax/
user fee funding mechanism will have significant legal and political 
challenges to overcome. In addition, enormous national economic and 
national security benefits are threatened if the Federal Government 
does not continue to make these navigation channel investments.
    With the United States' future role in the global economy at stake, 
it is critical that our Federal navigation channels be properly 
maintained. General Treasury funding of this maintenance should be 
resumed.

    Mr. Nagle. Finally, with regard to dredge material 
management, we have seen progress since the adoption of a 
national dredging policy to facilitate the timely and cost-
effective dredging of our Nation's navigation channels. 
However, we still have more work to do. We still need to work 
toward consistent and expedited review of all dredging and 
disposal alternatives, separate from the 404 wetlands provision 
of the Clean Water Act, and for consideration of relative cost, 
risk and benefits of each alternative.
    Additional changes should be considered to emphasize 
prevention of pollution that contaminate sediments, and to 
require full consideration of the use and value of the waters 
and channels to navigation in establishing appropriate criteria 
and standards.
    Finally, AAPA wants to maximize the opportunities for the 
private sector, using Section 217 of WRDA 1996, to take a 
greater role in using dredge material in innovative uses, such 
as the creation of mitigation banks or the restoration of 
brownfield sites.
    AAPA appreciates the efforts by this subcommittee to 
address some of these issues in the last Congress, and we look 
forward to working with you as you consider changes to the 
Clean Water Act and other environmental laws this Congress and 
beyond.
    Mr. Chairman, we thank you for the opportunity to present 
the views of the U.S. public ports, and would be happy to 
answer any questions at the appropriate time.
    Senator Kempthorne. Mr. Nagle, thank you very much. We 
appreciate it.
    Mr. Faber.

 STATEMENT OF SCOTT C. FABER, DIRECTOR OF FLOODPLAIN PROGRAMS, 
                        AMERICAN RIVERS

    Mr. Faber. Thank you, Mr. Chairman.
    American Rivers strongly supports the Corps' growing 
environmental mission, including the environmental management 
program on the upper Mississippi River, the Section 1135 
program, Section 206 program, the Challenge 21 initiative now 
proposed by the Corps. But this morning, I'd like to talk about 
another Army corps, the Corps of Discovery led by Lewis and 
Clark, and the opportunities to revitalize the Nation's longest 
river, the Missouri River.
    In 1804, Lewis and Clark bore witness to some of nature's 
greatest scenes. Their journals are filled with descriptions of 
the river valley and its inhabitants, ranging from herds of 
10,000 buffalo to a flock of white pelicans more than 3 miles 
long. The Corps of Discovery recorded scores of plants, 
insects, fish, birds, and animals previously unknown to 
science, ranging from the least terns and prairie dogs to 
cutthroat trout.
    The Missouri that Lewis and Clark saw featured thousands of 
islands and sand bars separated by two constantly shifting 
channels. Dense forests, shallow wetlands, and endless prairies 
bordered the river. The water flowed through thousands of 
smaller side channels that provided a wide variety of water 
depths and speeds.
    Most of what Lewis and Clark saw, we cannot. Nearly 200 
years after their famous voyage of discovery, Lewis and Clark 
would hardly recognize the Missouri River. Today, white 
pelicans are rarely seen on the Missouri, and the least tern is 
considered endangered by the Federal Government.
    As we forced the rivers restless braided channels into a 
single, deeper canal, we eliminated nearly all the islands and 
sand bars and side channels that characterized the original 
river, the places fish and wildlife need to feed, reproduce and 
conserve energy. As these critical nurseries were destroyed, 
more than 30 of the species native to the Missouri River have 
been placed on Federal and State watch list. Many species have 
fallen to less than 10 percent of their historic population 
levels.
    Fortunately, the Missouri River enhancement program 
proposed by Senator Bond represents a rare opportunity to 
repair the Missouri River. As we prepared to celebrate the 
200th anniversary of Lewis and Clark's voyage of discovery, we 
have a once in a lifetime opportunity to boost recreation and 
tourism, revitalize riverfront communities, and restore natural 
places for river wildlife.
    While we cannot restore the river Lewis and Clark knew, we 
can repair much of it. We can create a Missouri River that 
Lewis and Clark would recognize.
    Unlike the existing Missouri River Fish and Wildlife 
mitigation program, which authorizes the Corps to reopen 
historic side channels and sloughs, S. 1399 authorizes the 
Corps to modify the rip-rap, wing dikes and other river 
training structures which line the river's banks to create 
shallow-water habitat in the river's main channel, places where 
fish can feed and conserve energy without interfering with 
commercial navigation or private property rights. That's why 
the legislation has not only been endorsed by American Rivers, 
but also by the Missouri Farm Bureau and by MARC 2000, a 
navigation industry trade association.
    I see these efforts to repair the Missouri as a central 
piece of a growing trend, a national campaign to retrofit our 
working rivers. In the past, we asked the Corps of Engineers to 
make our rivers, like the Mississippi, the Missouri and the 
Columbia, reliable arteries for commerce. And they have 
succeeded.
    But today we are asking the Corps to rise to a new 
challenge, to retrofit our working rivers so that they continue 
to be living rivers as well. As you know, the Corps is known as 
the Nation's problem solvers. But this problem, managing our 
rivers to meet the needs of nature and navigation, is perhaps 
the greatest problem they'll ever face.
    It's not a problem for which there are easy answers. We 
need to look no further than the upper Mississippi River, where 
despite the Corps' best efforts, habitat for river wildlife 
continues to be lost faster than it can be replaced. Of course, 
far more than fish and wildlife are at stake. More than 12 
million people annually recreate on and along the Mississippi, 
four times more than Yellowstone National Park, spending $1.2 
billion and supporting 18,000 jobs.
    I urge you to give the Corps the resources they need by 
including S. 1399, the Missouri River Enhancement Program, in 
the Water Resources Development Act of 1998, expanding programs 
like the Upper Mississippi River Environmental Management 
Program, nd continuing to support programs like the Challenge 
21 Initiative proposed by the Corps. Thank you.
    Senator Warner [resuming the chair]. Thank you, Mr. Faber.
    The chair wishes to apologize to the panel and to others, 
we have this bill on the floor and I'm one of the co-managers. 
But I'm back here now until we can complete the testimony of 
the panel.
    Our colleague from New Jersey has asked if we might take 
Mayor Pringle next to accommodate the Senator from New Jersey. 
We're happy to do that.
    Senator Lautenberg. Thanks very much, Mr. Chairman. Thanks 
for your kindness in permitting me to sit in on this 
subcommittee, of which I am not a member, but I have an active 
interest, as you know, in infrastructure, particularly as that 
infrastructure affects the environment and vice versa.
    I'm delighted to see a friend, a distinguished mayor from 
New Jersey here, Mayor Ken Pringle. Each year I get to march in 
the St. Patrick's Day parade there, early in March. Sometimes 
the wind blows and the rain comes, but we stick it out, because 
this parade is one of the most popular in the whole State of 
New Jersey, and by no means is Belmar a major city in size. But 
it's a major city in its effect on what happens in our shore 
and resort industries.
    So I'm pleased to welcome Mayor Pringle here. I look 
forward to his comments, Mr. Chairman, and hope that it will 
help us decide on the kind of legislation that we ought to be 
passing here.
    Senator Warner. Thank you.

 STATEMENT OF KENNETH E. PRINGLE, MAYOR, BOROUGH OF BELMAR, NJ

    Mayor Pringle. Thank you, Senator.
    Good morning, Mr. Chairman and members of the committee. I 
want to thank you for having me here.
    I've been the Mayor of the Borough of Belmar for 8 years, 
and I'm pleased to be here to bring my perspective as a small 
town mayor to the Federal shore protection program.
    Belmar is only a one-square mile town. We have a year-round 
population of 5,700 residents. But on a typical Sunday 
afternoon in the summertime, up to 20,000 people will squeeze 
onto our beaches, which are only about a mile long and 150 
yards wide at high tide, a little bit wider at low tide.
    Senator Warner. Councilwoman Strayhorn, just out of 
comparison, how many in Virginia Beach on a Sunday afternoon, 
same time period?
    Ms. Strayhorn. About 200,00.
    Senator Warner. About 200,000.
    Senator Lautenberg. Well, it's easier to manage when you 
get that large a number.
    Ms. Strayhorn. We'll talk about that.
    [Laughter.]
    Senator Warner. Thank you. I just wanted to get a little 
perspective.
    Mayor Pringle. That's quite all right. We go by people per 
square yard in Belmar, the most densely populated State and the 
most densely populated beaches.
    The Borough of Belmar has been an active partner with the 
State of New Jersey and the Corps of Engineers in this largest 
shore protection program in the United States. It now includes 
11 municipalities and 21 miles of coastline in our area.
    We're here today to urge continued support for that 
program, and to thank the committee for recognizing its 
importance and the need to invest in our shore communities.
    I want to take a moment to note the longstanding 
contributions of Senator Lautenberg toward maintaining this 
investment. He's been a tireless champion of our coastal areas, 
and to environmental protection in our area. All along the 
shore are very thankful to him for that.
    Belmar was an early convert to the cause of beach 
nourishment. We had an infamous nor'easter in 1992, in which 
the whole Jersey shore, Belmar and the towns around us, in 
particular, were battered by a combination of high winds, 
abnormally high tides and almost 3 days of pounding surf. Along 
the southern half mile of Belmar's coast, which had eroded away 
almost to nothing over the years preceding that storm, we had 
seven blocks of boardwalk and two pavilions that were 
completely destroyed, including three blocks of boardwalk that 
had been protected by a stone sea wall that ran parallel to the 
boardwalk.
    Other towns on either side of us, like Spring Lake, Avalon 
and Bradley Beach, were devastated by the same storm, and lost 
their entire boardwalks and sustained enormous damage to upland 
improvements. The cost to the Federal Emergency Management 
Administration in terms of emergency funds following that storm 
for cleanup and repair was several million dollars.
    Senator Lautenberg actually toured that site with us in the 
days immediately following the storm. And when we walked along 
our boardwalk, we found that Belmar's northern end had fared 
much better than our southern end. We realized that the only 
difference between our northern end and our southern end is 
that Belmar's northern beaches were much wider, due to the fact 
that the Shark River inlet just to the north of Belmar traps 
sand that drifts northward along the coast.
    That wide beach had protected the northern end of Belmar 
and kept our boardwalks from suffering the same fate as our 
southern boardwalks. It became clear to us that the best 
defense that day was not stone sea walls or jetties, but rather 
long, sloping beaches that could sustain the fury of a storm.
    As a result of what we learned then, the residents of 
Belmar and other towns hailed the arrival of the Army Corps 
project when it arrived last summer with two large, ocean-going 
dredges that worked around the clock for the entire summer, 
pumping tens of millions of cubic yards of sand on our beaches, 
literally creating beaches right before our eyes.
    Despite a series of nor'easters that hit us this past 
winter and spring, our beaches have survived very well in 
Belmar. We've had very little sand loss. More importantly, we 
were able for the first time to leave in place this past winter 
portable boardwalk sections that we installed after the 
nor'easter of 1992. This has been a boon to runners and walkers 
and bicyclists and mothers who push their children on our 
boardwalk every day.
    The wider beach has also significantly expanded our ability 
to entertain tourists in our community. In fact, just this past 
weekend, we had a very large amateur volleyball tournament at 
the southern end of our beaches. That would have been entirely 
impossible before this year.
    As other communities will attest, the Corps of Engineers 
projects have improved their resistance to these devastating 
storms. Based on our experience in Belmar over the past winter 
and what we seem to be experiencing in terms of greater 
frequency and severity of storm activity off our coast each 
winter, it's clear that projects like this will save millions 
of dollars of damages to our county in the coming years.
    The Clinton administration's proposal for a change in the 
cost-sharing formula for periodic renourishment of beaches has 
us concerned. Belmar will be due in the next few years for its 
first periodic renourishment. Under the current proposal, non-
Federal sponsors would pay 65 percent, the Federal share would 
drop to 35 percent.
    There's no question that my community and communities like 
us are willing to pay our fair share of the cost of financing 
these types of projects. We certainly gain a benefit, and we 
recognize that. Our concern, Mr. Chairman, is that whether for 
initial construction or periodic renourishment, we need that 
share to be a fair burden on our communities. The funding 
levels should be based upon an assessment of projects around 
the country, and also on the ability of the local government to 
pay.
    The Borough of Belmar does its part to maintain a stable, 
reliable source of local funding for our program. We in New 
Jersey, at least outside of Atlantic County, do not have 
statutory authority to charge a hotel or local sales tax. We 
rely instead upon a user fee, essentially, a beach badge to 
gain admission for residents and non-residents alike. By law, 
this is a fee that can be used only for the cost of operating 
and improving our beaches.
    Our main concern today is that we keep these fees 
affordable to families who use our beaches. Belmar's 10 percent 
share of the most recent beach nourishment project, this is the 
original project, was $612,899. We've had a great summer the 
last 2 years, and our revenues from those summers will enable 
us to make a cash down payment of $300,000 toward that amount. 
We're borrowing the balance and will pay that off over the next 
few summers if weather permits.
    But it is important that the future share that we have to 
pay be reasonable so that we're not forced to raise our beach 
badges to the point where they're beyond the reach of the types 
of families who regularly come to Belmar from New York, 
Pennsylvania, New Jersey, and of course, Virginia.
    Shore communities around the country believe that beach 
nourishment projects are in the national interest, not just the 
State and local interest. They're our first vital defense to 
storms, and every dollar of that investment reduces the cost of 
emergency management funds that will have to be put forward in 
the event a storm causes damage. And that's not counting the 
untold losses in private investment, many of which are either 
uninsured, or uninsurable.
    I'd also like the committee to keep in mind right now that 
the revenues from tourism in New Jersey don't go to local 
governments. We rely primarily on property taxes in New Jersey 
for our local revenues. Instead, tourism revenues go to State 
and Federal treasuries.
    The Jersey shore is an enormous economic engine. In 1996, 
travel and tourism in New Jersey's five coastal counties 
generated over $12 billion and was responsible for 161,000 
tourism-related jobs. The total payroll is $3 billion. We think 
this is an industry that is a worthwhile Federal investment.
    I want to thank you for giving me the opportunity to share 
my views here today, and I'd be pleased to answer any questions 
you may have.
    Senator Warner. Thank you, Mayor Pringle.
    We would like to welcome Mr. Grover Fugate, who is the 
executive director of the State of Rhode Island Coastal 
Resources Management Council. Mr. Fugate, welcome to the 
committee.

 STATEMENT OF GROVER FUGATE, EXECUTIVE DIRECTOR, RHODE ISLAND 
         COASTAL RESOURCES COMMITTEE MANAGEMENT COUNCIL

    Mr. Fugate. Thank you. First of all, I'd like to thank the 
committee for having me here this morning.
    Rhode Island, although the smallest State in the Nation, 
has a long coastline and is one of the second densely populated 
States, after New Jersey, in the United States. Rhode Island's 
tourism generates about a little over $2 billion, about $2.2 
billion to the economy, and is the largest segment of our 
economy in the State.
    As a coastal manager, we're very concerned about managing 
all aspects of beaches, including looking at beach nourishment 
as one of the tools that we use to reduce damage, but also as a 
management tool for other ends.
    I'd just like to go through a few overheads here, and I 
apologize in advance, because some of them are kind of light. 
But I want to illustrate a few points here regarding the Rhode 
Island case. What this slide shows, although it's outdated 
somewhat, is the tracks of major hurricanes over the last, say, 
70 years. As you can see, most of these hurricanes track in a 
north-south fashion. In Rhode Island, we have the lucky 
advantage of turning the corner, so as hurricanes track in that 
north-south fashion, we turn the corner and we take the full 
brunt of the storm.
    Again, as you can see, most of the tracks showing on this 
chart show that they've been tracking through the Hartford, CT 
area. That is a particularly damaging path for us, because we 
catch the brunt of the forward movement of the hurricanes, plus 
the wind factors.
    Our beaches, because of this and several other factors, are 
extremely susceptible. Some of the other factors include the 
fact that we are a sediment-starved system. We have no major 
rivers pumping sediment into the coastal area in Rhode Island. 
The only source of sediment are old glacial deposits usually in 
headlands or beaches themselves and some small offshore 
deposits.
    In addition, our beaches along the south shore are 
typically barrier spits. They are very low in profile compared 
to other barriers in the United States, and very narrow. All 
those factors make the coastline in Rhode Island extremely 
susceptible to both hurricane and nor'easter damage.
    This next slide is a chart showing transepts taken along 
the shoreline of the State, and then projecting whether they're 
either erosional or accretional. As you can see the scale off 
to the side on the right hand side is in feet. Many of those 
areas of shoreline are approaching 3 feet of erosion per year.
    If you look at the line here as being zero, if you're on 
this side of the line, it's accretional, if you're on this side 
of the line, it's erosional. Overall, our shore is an erosional 
or transgressive shoreline. It is moving back in response to 
both storms and erosion.
    Senator Baucus. How much of it is due to the global warming 
or--the Atlantic coast is declining, isn't it, anyway, in 
relation to the Pacific?
    Mr. Fugate. The Atlantic coast there, particularly within 
the New England area, there's a theory called isostatic rebound 
theory, which means that after the last glaciation, after the 
weight of the ice was lifted, a lot of the New England area was 
still lifting relative to sea level rise. Unfortunately, in 
Rhode Island, we're not lifting fast enough, erosion is 
catching up with us and our beaches are rolling over. There's 
no doubt that sea level rise is playing a factor.
    Historically, within Rhode Island over the last 50 years, 
we have had about six inches, just in historic sea level rise, 
not even counting anticipated accelerated sea level rise.
    Senator Baucus. Thank you.
    Mr. Fugate. One other factor that I'd like to point out, 
this is a picture just showing the sediment movement along the 
south shore of Rhode Island. Back in the 1950's, the early 
1950's, there were a series of hardened breachways that were 
put in on the coastal ponds, which completely altered the 
ecosystem. As you can see, they allow for a large influx of 
sediment into the coastal ponds. They're acting like huge 
vacuum cleaners, actually taking sediment out of the beach 
systems.
    A project that we're engaged with the Army Corps right now, 
thanks to Senator Chafee, is a project to take a holistic 
approach to looking at management of these ponds, and with a 
thought to reverse some of the impacts that we have caused in 
the 1950's. What we're hoping to do is dredge those flood tidal 
deltas, put the material on the beach, restore coastal 
habitats, restore grass, nourish the beaches for tourism, 
restore navigation in these coastal ponds which have been lost 
through the sedimentation and completely rehabilitate these 
areas and try to maintain them on a sustainable system.
    I guess my main remark today, in looking at beach 
nourishment, is to remind, as you're all aware, that I think 
we've interfered in the natural system through our past 
activities, to the extent we can't walk away any more. We have 
to actively manage these areas. And beach nourishment is going 
to still continue to play a very important tool in trying to 
manage these areas, so that we can sustain these benefits.
    Thank you.
    Senator Warner. Thank you.
    Mr. Higgins.

 STATEMENT OF STEPHEN H. HIGGINS, BEACH EROSION ADMINISTRATOR, 
    BROWARD COUNTY DEPARTMENT OF NATURAL RESOURCE PROTECTION

    Mr. Higgins. Thank you, Mr. Chairman, distinguished members 
of the subcommittee.
    Thank you for the opportunity to appear before you today to 
testify on ways to strengthen and make more cost effective the 
Nation's shore and beach protection program. It's my hope that 
my testimony and that of the others which appear before you 
will help to illustrate the overall importance of beaches to 
local, State, and national economic development, and the need 
to continue an active Federal presence in shore protection.
    I wear several hats today in that I represent a local 
government, Broward County, in southeast Florida. I also 
represent the Florida Shore and Beach Preservation Association, 
which is a statewide league of counties and cities with a 
common interest in beach erosion. And the American Coastal 
Coalition, which is the national coastal advocacy group.
    The hats I'm wearing are made of a common material, 
however, the effort to spread the word about the value of 
America's beaches, and the need to continue what has been a 
successful and beneficial partnership among local interests, 
States and the Federal Government in protecting a vital 
national asset.
    Mr. Chairman, beaches are a fundamental and critical piece 
of economic environmental infrastructure. They are economic 
engines which rival major commercial ports in revenue and job 
generation, and traditional flood control works in protection 
of private and public property.
    Having grown up in southeast Florida, I witnessed the 
chronic and widespread economic decay which resulted from the 
loss of sandy shoreline at Miami Beach in the 1960's, and 
watched the rebirth of that area after the Corps of Engineers 
assisted in the restoration and maintenance of that beach.
    In Broward County, my home, federally-assisted shore 
protection efforts have ensured the sustainability of 
infrastructure which provides $800 million in annual regional 
economic input, creates and sustains 26,000 jobs, protects over 
$4 billion in upland property, and provides upwards of $100 
million in annual local, State, and Federal taxes. This is in 
just one moderate-size county with 24 miles of beach.
    A recent study by the Travel Industry Association of 
America concluded that almost 80 percent of the nearly $500 
billion in annual tourism expenditures occurs in States with 
coastal congressional districts, and that those coastal 
districts alone generate over $185 billion per year in tourism 
expenditures, while sustaining 3 million jobs with a payroll of 
almost $50 billion annually.
    Bearing in mind these figures, Broward County has in the 
planning stages a major shore protection project which will 
keep our beaches healthy well into the next century. The 
project involves traditional beach nourishment using offshore 
sand sources, and will restore and nourish more than half the 
county shoreline. In order to increase the durability of the 
project, to reduce the ambient erosion rate, the county also 
proposes to construct some highly engineered sand holding 
structures in the most erosive area, which happens to be just 
downstream of the Federal navigation project at Port Everglades 
and to introduce sand bypassing at Port Everglades.
    The estimated cost of all this work, including the sand 
bypassing, is about $30 million. The calculated Federal share 
of the beach nourishment and structures components, based on 
historical Federal participation and on Corps of Engineers 
approved studies, is about $17 million, which Broward County 
has requested several years running now in appropriations 
bills.
    For $17 million, the Federal Government helps to ensure the 
existence of an item of infrastructure which produces the 
better part of a billion dollars in annual economic activity, 
protects from storm damage and subsequent Federal 
rehabilitation assistance billions of dollars in public and 
private property, and produces tens of millions of dollars in 
annual Federal tax revenue. If a healthy local and regional 
economy is at all contributive to the vitality of the national 
economy, as intuition would suggest, Broward County's project 
would appear to be a cost-effective investment for the Federal 
Government.
    Having made these comments, Mr. Chairman, we as coastal 
interests also acknowledge and understand the tightening 
budgetary constraints under which all levels of Government must 
operate. A water resources development type, such as beach 
erosion control, which requires expensive and sometimes 
frequent maintenance, is a budgetary concern.
    For this reason, it's incumbent on all of us to try to find 
better, more efficient and more cost-effective ways to maintain 
our beaches. A series of proposals has been put forth by the 
American Coastal Coalition for inclusion in the Water Resources 
Development Act of 1998, which will help accomplish these 
objectives, and they are as follows.
    We urge Congress to mandate that shore protection is one of 
the Corps' primary missions. Currently, the Corps' shoreline 
protection role is merely an outgrowth of its storm protection, 
flood control and environmental restoration missions. It should 
not be a Corps stepchild, and in view of the extraordinarily 
positive cost-benefit ratios attributable to beach 
replenishment projects, it's fiscally improvident to sacrifice 
shore protection as a Federal mission based on short-term 
budgetary savings.
    We call on Congress to authorize a new national shoreline 
study to assess the regional and national economic impact of 
beaches and to take a complete inventory of the condition of 
the Nation's sandy beaches. The last inventory was taken in the 
late 1960's, and there has never been a national assessment of 
the far-ranging economic impact of beaches. Without this data, 
it is impossible for Congress to consider major changes in 
national shoreline protection policy, or to budget for the 
Federal share of beach repair and maintenance.
    The Federal Government has a statutory and moral 
responsibility to mitigate the damage that it's caused beaches 
by dredging and stabilizing port and inlet channels. There are 
too many examples of the Government's failure to recognize and 
respond to that responsibility. Language should be included in 
WRDA 1998 which ensures that this mitigation responsibility can 
be used as the basis for Federal participation in a shore 
protection project which is needed due to Federal actions.
    One immediate change in policy that we strongly recommend 
would direct the Corps to place beach quality sand dredged from 
channels on adjacent beaches, regardless of whether it is the 
so-called least cost option. On many occasions, dredge material 
is deposited in the ocean, because placement on a nearby beach 
is not deemed the least cost option. Subsequently, taxpayers 
pay for pumping sand back onto the beach as part of a shore 
protection project, thus the least cost option may ultimately 
result in a higher cost to taxpayers.
    We support statutory language in WRDA 1998 that directs 
beach quality sand dredged from a navigation project to be 
placed on nearby public beaches, unless such disposal is not 
economically and environmentally sound.
    In some areas of the country, near-shore sources of sand 
for beach nourishment are becoming scarce. Recognizing this 
fact, Congress adopted legislation making it possible for the 
Minerals Management Service to enter into agreements with the 
Federal Government as well as with non-Federal sponsors of 
beach nourishment projects, to acquire sand from the outer 
continental shelf.
    While Congress gave MMS the discretion to determine if it 
should charge non-Federal sponsors for this sand, the MMS has 
determined that as a matter of policy, it will impose a charge. 
This will increase the costs to States and local governments 
unnecessarily. Therefore, we support statutory language which 
removes from MMS the discretion to charge any fee for OCS sand 
to a non-Federal sponsor of a federally authorized shore 
protection project.
    We realize that while this issue is not technically within 
the jurisdiction of this committee, we believe the 
jurisdictional issues can be overcome.
    The WRDA bill introduced by the Administration included 
language which altered the cost-sharing formula for periodic 
beach nourishment, making the non-Federal interest responsible 
for 65 percent of the cost. While this may be seen as a gesture 
indicating a willingness to continue participating in shore 
protection and beach protection, it appears not to be based on 
any real analyses of who benefits from the projects, and was 
not accompanied by new project authorizations.
    It's likely that the current cost-sharing formula can be 
restructured to reflect more accurately the true beneficiaries 
of beach projects. However, to be useful, such a restructuring 
must be based on engineering, science and economics, and must 
be accompanied by an intelligent program of authorizations of 
shore protection projects and studies.
    We recommend the establishment of a national shoreline and 
shore erosion data bank. Several Federal agencies currently 
collect or have the ability to collect data that is vital to 
the management of our coastlines. Data are also collected by 
States, local governments, and academic institutions.
    To facilitate the long-term management of our shorelines, 
all interests should have access to all the useful data they 
need to make responsible policy determinations. The 
authorization of a national shoreline and shore erosion data 
bank in WRDA 1998 and the funding of that bank in the Energy 
and Water Development appropriations bill for fiscal year 1999 
would be a significant step for pulling together and augmenting 
the available data, and establishing a mechanism for its 
maintenance and dissemination.
    The American Coastal Coalition calls on this subcommittee 
to insist, as part of WRDA 1998, that the White House Office of 
Management and Budget and the Army Corps of Engineers implement 
the letter and the spirit of the Shore Protection Act, as 
incorporated in section 227 of the 1996 WRDA, and the vast body 
of other Federal laws which clearly establish a Federal role 
and responsibility to participate in the repair and maintenance 
of sandy beaches.
    Finally, we urge this subcommittee to energetically support 
the research efforts that have placed America at the forefront 
of coastal engineering worldwide. Both the Corps of Engineers 
and the academic community have, with the help of the Federal 
Government, contributed to a dramatic improvement in the body 
of knowledge about coastal dynamics and the coastal systems, 
knowledge which has begun to result in lower project costs and 
increased project effectiveness.
    Since these are the very attributes that we all seek, 
please provide the necessary authorization to sustain this 
vital research.
    Mr. Chairman, we believe that beaches are fundamental to 
the economy at all levels, that there is an emerging body of 
knowledge and literature that so indicates. We believe that it 
is proper and appropriate that the Federal Government 
participate in partnership to restore and maintain the Nation's 
beaches.
    We know there are ways to reduce the long-term cost of 
beach erosion control projects, methods such as reimbursable 
projects, combining beach erosion control with navigation 
projects, regionalizing shore protection efforts, implementing 
innovative erosion reduction features, and allowing the Corps 
the flexibility to carry over allocated funds to subsequent 
fiscal years. These measures would increase project 
effectiveness and reduce long-term costs.
    Mr. Chairman, thank you very much for the opportunity to 
address the subcommittee today, and to lay before you some of 
the most pressing shore protection policies.
    Senator Warner. Mr. Higgins, we thank you for making the, 
comparatively speaking, long journey from Florida, a State that 
is very much in our hearts and thoughts these days. In my 
lifetime, I cannot recall a single geographic area of this 
country subject to so many ill fortunes and ill winds of mother 
nature. I hope in due course this thing can be stopped, and you 
all can return to your way of life. I wish you luck. Thank you 
for making the trip.
    Mr. Higgins. Thank you, Mr. Chairman.
    Senator Warner. Now, from my State, Ms. Strayhorn, we're 
delighted, thank you for your patience. But I thought we'd wrap 
up with you.

 STATEMENT OF LOUISA M. STRAYHORN, CITY COUNCILWOMAN, VIRGINIA 
                           BEACH, VA

    Ms. Strayhorn. Well, I appreciate that. And it's very good 
to see you again, Chairman Warner.
    Senator Warner. Nice to see you.
    Ms. Strayhorn. I appreciate the opportunity to testify 
before the committee about the city's past and ongoing work 
with the U.S. Army Corps of Engineers, and that city, of 
course, is Virginia Beach, about our numerous beach and 
navigation projects, and to request serious reconsideration of 
Federal beach replenishment cost-sharing.
    As you well know, Chairman Warner, Virginia Beach is a 
beautiful resort city located only a few hours' drive from this 
Nation's capital, and it is the largest city in the 
Commonwealth of Virginia. We're hoping you'll take your 
vacation fairly soon.
    Having served on the city council for the past 4 years, I 
know first-hand how the well-being of our beaches is crucial to 
the city's economy. The city has over 6 miles of commercial 
beachfront, which is critical to the livelihood of many 
Virginia Beach residents and the city's financial health, since 
tourism is our largest employer.
    Over 2 million out-of-town visitors arrived in Virginia 
Beach last year. These visitors spent approximately $500 
million in the city, and directly created about 11,000 jobs. In 
addition to our visitors, the second biggest employer for 
Virginia Beach is the U.S. Navy, at the U.S. Naval Air Station, 
Oceana supports the largest naval complex in the free world.
    After three rounds of base realignment and closure, 
expansion of this megaport continues with an increase of as 
many as 6,000 sailors and family members in the next year, with 
the F/A 18 transfer from Cecil Field to Oceana. And again, my 
city wants me to say thank you for your tenacious efforts, 
because we know it would not have happened without it.
    Our city's economic health directly impacts the quality of 
life enjoyed by the thousands of naval personnel in Virginia 
Beach. Therefore, because of these many varying factors which 
constitute the city, the size of our population over 400,000, 
our location on the Atlantic Ocean and Chesapeake Bay, and our 
dependence on tourism as the largest segment of our economy, 
the Virginia Beach City Council has a particular interest and 
directive to protect our beaches and navigable waterways.
    As far as protection is concerned, sandy beaches are an 
integral part of the city's coastal infrastructure and provide 
the first line of defense against storm waves, and form the 
basis for our continued economic vitality.
    For the past 25 years, the city, in conjunction with the 
Corps, has been working to finish the region's highest 
priority, the Virginia Beach Erosion Control and Hurricane 
Protection Project. This project protects and enhances six 
miles of commercial and residential beach front consisting of 
over $1 billion in flood insured development against a direct 
hit from a hurricane. The project protects hundreds of millions 
of dollars of city infrastructure, our tourism industry, and 
more than a thousand residential and commercial properties 
along the shore.
    Study on this program as a Federal project began in the 
1960's, and after long anticipation, the project was authorized 
by Congress for the construction in the 1986 Water Resources 
Development Act. Actual construction began in fiscal year 1996, 
which I know you are well aware of. And depending on 
appropriations levels, construction will be completed in the 
year 2001.
    This will afford us a vast improvement in protection from 
storm events. The area protected by the project will be saved 
from average annual flooding damages estimated at over $13 
million per year during the project's 50-year life.
    An issue facing this committee, as you prepare the WRDA, is 
the Administration's proposed revision in cost-sharing for 
beach replenishment. Once construction of this beach erosion 
control and hurricane protection project is complete, the 
authorization includes the periodic renourishment of the 
project beach for a 50-year period. The very basis for the 
project's performance estimates is founded in the premise that 
the beach and seawall will act together to provide the 
protection benefits the beach must maintain.
    Although not specifically addressed in the draft language 
supplied by the Administration, the application of a revised 
cost sharing must not affect ongoing or existing projects. We 
have based our participation in this project and agreed to 
maintain the constructed project with the belief that the cost-
sharing formulation in the 1986 Water Resources Development Act 
would remain at the authorized level of 65 percent Federal and 
35 percent local. The Administration has proposed to change the 
beach replenishment portion of these projects to 35 percent 
Federal and 65 percent local.
    While the merits of revision could be argued, any 
application of new cost sharing levels must be limited to new 
authorities. And we urge you to specifically address this issue 
as you move forward with the WRDA, because we feel that it 
would be otherwise unfair. If the Administration's new cost-
sharing formula were applied to our existing project, the cost 
to the city of Virginia Beach over and above the amount 
specified in our project cooperation agreement would escalate 
by more than $40 million.
    As a member of the city council, when the council 
authorized our city manager to enter into the agreement with 
the Corps of Engineers, I can tell you, first-hand, that the 
citizens of Virginia Beach and its council would feel betrayed 
if the rules were changed in the middle of the project and a 
cost-sharing increase, as a result, by over $40 million would 
indeed be a hardship to our citizens.
    We would urge you to reject the Administration's proposal. 
We must consider both flood damage reduction benefits and the 
vital economic contributions that the Nation's beach tourism 
industry generates.
    In conclusion, I would like to highlight the following 
points and recommendations to the committee. First, we urge the 
committee to clarify in its bill that any revisions to the 
cost-sharing formulation for beach replenishment only apply to 
projects not yet authorized or constructed. We would also urge 
the committee to review all the merits and benefits of the 
Federal beach replenishment program and prevent the 
Administration's cost-sharing formula proposal from being 
enacted.
    Finally, in our view, the Department of the Interior has 
overstepped its authority by assessing fees to local 
governments for mining beach replenishment sand in the 
furtherance of projects authorized by this committee. We have 
detailed this problem in my written testimony, and I will not 
go into it in detail here. However, we do urge you to consider 
language for the WRDA that will prohibit the Interior 
Department from applying its authority under the Outer 
Continental Shelf Lands Act for any project authorized by the 
WRDA.
    The city of Virginia Beach is the only locality in the 
country to have ever been compelled to pay the mining fee. 
Directive language for reimbursement of the $198,000 mining fee 
that the city has been forced to pay would be greatly 
appreciated.
    Chairman Warner, I want to thank you again for the 
opportunity to speak with you today on these issues of extreme 
importance to the over 400,000 citizens of Virginia Beach. The 
work of this committee has had a very positive effect on our 
community through nearly 50 years of continuous beach 
replenishment, and now with the construction of the new beach 
erosion control and hurricane protection project at our resort 
area.
    To you, Chairman Warner, we especially appreciate all that 
you have done for Virginia and the Nation, and hope that you 
will be able to continue to support us with these requests. 
Thank you.
    Senator Warner. Thank you very much.
    Listening to your excellent statement evokes some of the 
happiest memories of a lifetime--visiting the beach. I will 
definitely be back at the earliest opportunity.
    I must say, we have been successful in our funding with the 
projects to date.
    Now, what I'd like to do is pose two brief questions and 
we'll just go from Mr. Nagle straight down. And if you could 
shorten your answers; they're simple questions. I would like to 
get a record of your responses.
    Would you be supportive of cost-sharing changes if the 
Administration were to give assurance it would budget for and 
submit for the shore protection projects? Well, that's right, 
you wouldn't have a comment on that, so thank you. Mr. Faber.
    Mr. Faber. Well, as much as I enjoy Virginia Beach, my 
employer won't allow me to go that close. I'd have to leave 
rivers to get to the ocean.
    Senator Warner. Well, we can't do that. Ms. Strayhorn, what 
do you believe? I'm just trying to get some sense of where I've 
got some moving around.
    Ms. Strayhorn. The 65 percent that we're talking about here 
is a really important point to us. We feel that the Nation as a 
whole benefits from the economy that is engendered by this, our 
tourism industry, and the tourism industry all over the 
country. We just feel that that is a fair distribution of that, 
and that 65 percent needs to remain.
    Senator Warner. Mr. Higgins.
    Mr. Higgins. Mr. Chairman, speaking with my local hat on, 
we've always liked the 1986 formula, because it was really a 
good deal for the locals and the State.
    Looking at the larger picture, perhaps, with the budgetary 
constraints, it may be appropriate to alter those cost-sharing 
proportions. I would urge you, though, to base them on some 
factual representation of who the true beneficiaries of the 
project are, rather than a random assignment of costs.
    Hopefully, accompanied by new projects, that would allow a 
smooth transition into a new formula, rather than be 
retroactive.
    Senator Warner. Sure. Mr. Pringle.
    Mayor Pringle. Mr. Chairman, the 65 percent seems to be a 
fair share for the Government. In our case, we draw people from 
other States. To impose the lion's share on State and local 
government seems to be unfair.
    I might suggest that part of the allocation should be based 
upon the extent to which an area benefits the public. If it's 
an area of beach on which primarily private homes that are 
being protected, then perhaps the local share should be greater 
there. But where the locale opens up its beaches and makes them 
available to the public, then I think, in fact, the public, in 
this case the Federal Government, ought to pick up the greater 
share of that.
    Senator Warner. Mr. Fugate.
    Mr. Fugate. Yes, Mr. Chairman, I would have to agree, I 
think, with the other panel members, in that we would like to 
see the formula stay the way it is. We realize in tight 
budgetary times there may have to be some adjustments. But I 
think a phase-in period for those adjustments would be much 
more rational than a quick shift in those, particularly given 
the dollars that are involved, it is often very difficult for 
State or local governments to make those types of shifts. They 
very often have to abandon those projects.
    The resultant damage that will come from storms will 
probably dip into the Federal coffers anyhow in other areas.
    Mr. Faber. Mr. Chairman, could I add just a couple of quick 
thoughts on cost-sharing in general.
    Senator Warner. Sure.
    Mr. Faber. It's obviously an issue that's been before this 
committee in the past few water resources development bills. I 
think the reason the Administration and certain conservation 
groups support cost-sharing in principle is two-fold. One is, 
and certainly I think everyone can appreciate this, it helps us 
to spread Corps resources further.
    Right now, there is simply not enough money to go around, 
satisfy all the demands that are being placed on the Corps of 
Engineers, whether it's from beach communities or riverside 
communities or navigation industry or flood control interests. 
Cost-sharing simply allows the Corps to do its job better and 
to meet more of the needs of the Nation.
    There's also another important principle which was captured 
in the flood plain review committee's report, ``Sharing the 
Challenge,'' a few years ago, after the flood of 1993. That by 
requiring local government to share the cost of these 
disasters, we create the incentives necessary to discourage 
unwise development, to discourage development in very flood-
prone areas.
    The one mistake we have made as a Nation, really beginning 
around the turn of the century is, by assuming too much 
responsibility for these disasters, and in that way, 
encouraging development in places, perhaps, where it should not 
have occurred. So the right mix of cost-sharing is obviously a 
decision that you should make. But the principle is important, 
and that is that we need to give local governments the 
incentives to discourage development in very flood-prone areas.
    Senator Warner. Let me start with you on another issue, and 
that is the current length of each renourishment contract is 50 
years. Seems to be sort of a length of time to tie up Federal 
resources, and seems to inhibit the construction of new 
projects.
    Would it not be more reasonable to limit contracts to 25 
years, which would still do the beach protection, but in my 
judgment it would free up some funds for other areas?
    Mr. Faber. I think the requirement of the 50-year contract 
reflects the Corps' general desire to make sure that these 
projects have a long project life, and not to simply go in, 
build something and have to return a few years later. So it may 
make sense to have a 20-year or 25-year contract.
    I think perhaps the bigger issue is how to prioritize the 
problems facing flood-prone communities nationally. Every 
community that's facing these sorts of problems sees its 
problem as the Nation's No. 1 priority. And I can appreciate 
that.
    But fortunately, we do know where the Nation's most 
repetitively flood-prone structures are. It seems to me it 
makes sense to marshal our resources to attack those problems, 
rather than doing it in something of a piecemeal fashion, which 
is unfortunately what we've done to date.
    Senator Warner. I'm going to stick to the 50 versus 25.
    Ms. Strayhorn.
    Ms. Strayhorn. On the local level, we realize we cannot 
possibly have as long a term as we would like, but something 
different could be considered. I don't think we would have a 
problem with the issue being reconsidered.
    However, of course, it would have to be for any projects 
that were not under way at the present time.
    Senator Warner. You want to grandfather them all in?
    Ms. Strayhorn. Absolutely. Because when people plan, when 
you have put in already 50 years for something, and we've 
planned as a community and budgeted for it, we don't have much 
choice when someone comes up and says, well, we're going to 
change it. What do we do for that when we have other mandated 
expenses we need to take care of?
    Senator Warner. Well, I have to tell my good friends from 
Virginia Beach, the little voice is telling me I won't be here 
for 50 years. So somebody will have to pick up where I drop 
off, then.
    Ms. Strayhorn. I don't think you should make that 
statement. You don't know.
    [Laughter.]
    Senator Warner. Even 50-plus mine would beat Strom 
Thurmond's 95.
    [Laughter.]
    Senator Warner. Mr. Higgins.
    Mr. Higgins. Mr. Chairman, I think the 50-year project life 
is an artifact of the way all public projects are approached in 
terms of an economic analysis. It may not be appropriate from 
an engineering standpoint for beach erosion control projects, 
if only because they vary in durability so much. Some projects 
require maintenance every 15 years, some projects require much 
more frequent maintenance, therefore increasing the long-term 
costs.
    I don't know how much money shortening the project life to 
25 years would save, when you consider the discounting of the 
dollar. I do know that for some projects, a 25-year life would 
probably mean just as much of an investment, because of the 
need to renourish frequently, as other projects would in 50 
years. Therefore, it's difficult to apply a blanket economic 
analysis for all these variability of projects, but I don't 
know whether it's possible to look at each project and apply a 
custom-made economic analysis.
    I think in the interest of maintaining a balanced budget we 
should look at all the options.
    Senator Warner. We're trying to break the logjam and move 
around. Mr. Pringle, do you have any views on it?
    Mayor Pringle. Mr. Chairman, I think that's a reasonable 
compromise.
    Senator Warner. Thank you.
    Mr. Fugate.
    Mr. Fugate. Mr. Chairman, the only thing I'd have to say to 
that is that whatever project life is chosen, whether it's 10, 
20, 50 years, I would suggest that most of us are going to be 
facing the problems that we have right now at the end of those 
project lives, unless other programs are brought in place to 
adjust patterns of development and give incentives for 
structures to be relocated out of these areas, and other 
management techniques put in place to manage these serious 
problems.
    Senator Warner. I have another question. You spoke earlier 
about the feasibility study with the Army Corps on the Rhode 
Island south coast. Do you know yet, after the feasibility is 
done, what the overall cost will be for the projects there?
    Mr. Fugate. We're estimating right now, looking at the 
projects that are in stream, we anticipate we'll probably be 
about $5 million per pond, the coastal lagoon system that we're 
looking at, and we have three major coastal lagoon systems that 
would be involved.
    Senator Warner. Ladies and gentlemen, we've had, I think, 
an excellent hearing. If necessary, we will try and accord some 
opportunity for other perspectives on this very important piece 
of legislation. But she's going to be a tough one. As we say in 
the Navy, stand by for ram, we've got to move it.
    Thank you.
    [Whereupon, at 12 p.m., the subcommittee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
                              ----------                              

       Statement of Hon. Byron L. Dorgan,  U.S. Senator from the 
                         State of North Dakota
    Just over a year ago Grand Forks, North Dakota; Grafton, North 
Dakota; East Grand Forks, Minnesota; and other communities in the Red 
River Valley were devastated by flooding of historic proportions. 
Following a dozen blizzards which dumped 3 years of snow in 3 months 
time, the Red River swelled to a height of 54 feet, 26 feet above flood 
stage. Estimates are that the flooding, classified as a 500-year event, 
caused damaged in excess of $1 billion. Thousands of homes and 
businesses were lost. Tens of thousands of residents were displaced. 
Simply put, it was a disaster bigger than anyone could imagine.
Grand Forks, ND, and East Grand Forks, MN
    Just over a year ago, Grand Forks and East Grand Forks were virtual 
ghost towns. Water was waist-deep in the streets. Eleven buildings in 
downtown Grand Forks stood as burned-out hulks. But, with unprecedented 
Federal disaster assistance, the recovery process was beginning even as 
the flood waters were receding, and in the past year, incredible things 
have happened. The downtown city areas have begun to be revitalized 
through grants, loans and construction. The existing levee system has 
been repaired and readied for short-term flood protection. Nearly 500 
homes have been purchased in the flood plain. These areas will become 
permanent greenways while new, permanent dikes will protect residential 
areas beyond the floodway.
    Until the cities are protected from future flooding, however, the 
recovery process will not be complete. Working with the Army Corps of 
Engineers, the two cities have designed a project to provide permanent 
flood protection. In February, both city councils voted in favor of a 
plan that would include levees, floodwalls, and road raises. The Corps 
has determined that the $281.8 million plan has a benefit/cost ratio of 
1.13 and is the Net Economic Development plan. Cost sharing between the 
Federal and State/local governments is 50/50.
    Support for the project is widespread. The project was included as 
one of five in the Administration's Water Resources Development Act 
1998 proposal. The project also has the support of State and local 
governments in both North Dakota and Minnesota; from North Dakota 
Governor Schafer, who has promised to provide $52 million in State 
funds; and from the North Dakota congressional Delegation as well as 
from Senators Wellstone and Grams, and Congressman Peterson in 
Minnesota. This project is the key to rebuilding these communities. I 
urge the committee's continued support for this vital effort.
Grafton, ND
    The City of Grafton was similarly devastated by last year's 
flooding. The realities of the disaster forced the city to reconsider a 
past decision not to seek a flood control project along the Park River. 
The proposed project was authorized initially in 1976, but deauthorized 
in 1992. To prevent a reoccurrence of last year's disaster, the city 
now seeks reauthorization of the project.
    The proposed bypass channel and tieback levees would cost about 
$27.3 million. About $9.6 million of the total cost would come from 
non-Federal sources. The Administration has stated that it would not 
object to reauthorization of the project as long as the environmental 
and economic suitability evaluations are updated and reconfirmed. The 
Corps is currently in the process of conducting this update. I 
understand that the Corps' preliminary benefit/cost assessment is 
positive because no new construction has occurred in the floodway, 
while many more homes and businesses would be protected than in 1976.
    I urge the committee to consider supporting this project that is so 
critical to the future of the City of Grafton and, for the record, I 
would like to submit a statement from the mayor of Grafton in support 
of this vital project.
                                 ______
                                 
         Statement of Fred M. Stark, Mayor, City of Grafton, ND
    The City of Grafton is located in the Northeastern corner of North 
Dakota; 40 miles from the Canadian border and 10 miles from the 
Minnesota border. The City was established on the banks of the Park 
River which flows to the Red River just 10 miles to the east. Recurrent 
flooding along the South Branch and the main stem Park River causes 
significant flood problems at Grafton. The largest flood of record, 
which occurred in 1950, inundated almost the entire city. More recent 
floods occurred in 1962, 1965, 1969, 1979 and 1997.
    90-95 percent of the land within the City limits and area 
surrounding the City is located in the flood plain. A diversion plan as 
proposed by the Corps of Engineers would secure the community from the 
annual impending spring flood, permitting flood preparation and 
prevention efforts and finances to be refocused toward developing the 
community. A diversion project would extend the life of infrastructure 
in the community as frequent flooding is very wearing on sewers, 
streets and other utilities.
    A diversion project will make land available outside of the flood 
plain which will be less costly to develop because buildings will not 
need flood-proofing and less costly to the homeowner, as flood 
insurance will not be required.
    Thank you for your support.
                                 ______
                                 
         Statement of Hon. Kent Conrad, U.S. Senator from the 
                         State of North Dakota
    Mr. Chairman, Senator Baucus, and members of the committee, thank 
you for giving me the opportunity to speak with you today. I am here 
today to urge you to authorize the flood control projects for Grand 
Forks, ND--East Grand Forks, MN, and for Grafton, ND, in the 1998 Water 
Resources Development Act this committee will develop in the coming 
weeks. These projects are supported by the local communities and by the 
bipartisan Members of Congress from North Dakota and Minnesota that 
represent these cities.
    As you recall, in April of last year, the Red River Valley in North 
Dakota and Minnesota faced the most significant flooding in recorded 
history. However, the flood of 1997 really began months before, in 1996 
and early 1997, as blizzard after blizzard blanketed the region with 
record snowfalls. Just as meteorologists name hurricanes throughout the 
hurricane season, weather forecasters in the Northern Great Plains 
began naming the blizzards that seemed to hit on almost a weekly basis. 
The last was blizzard ``Hannah,'' on the weekend of April 5-6.
    Hannah was the strongest winter storm in 50 years to hit the 
Valley, bringing tremendous destruction. The blizzard hit just as the 
residents of the Valley were preparing for what was already expected to 
be significant flooding. In fact, people were sandbagging as the 
blizzard began. Hannah dumped two feet of snow in areas, bringing the 
total to 10 feet for the season more than three feet above the previous 
record snowfall. Hannah began with a terrible ice storm that downed 
power lines leaving more than 80,000 customers without power in sub-
zero weather. Some were without electricity for more than a week in 
these conditions.
    And then the snow began to melt.
    The Red River of the North swelled to 54.11 feet at Grand Forks--26 
feet above flood-stage. The cities up and down the Valley worked 
feverishly day and night with the Army Corps of Engineers to prepare 
for the flood, raising and raising the levees to try to protect their 
cities. Many were successful. But the flooding in the northern end of 
the Valley was beyond the best efforts of the cities of Grand Forks and 
East Grand Forks. They were devastated by the historic flood as nearly 
the entire community was evacuated. The impact the flood had on these 
communities was unprecedented with tens of thousands of residents 
displaced, thousands of homes and businesses lost, and billions of 
dollars in damages. Simply put, it was a disaster of cataclysmic 
proportions.
    During this time of incredible need, the Federal Government 
marshaled an extraordinary response to this disaster. President 
Clinton, Vice President Gore, FEMA Director James Lee Witt, several 
members of the Cabinet, and many Members of Congress personally visited 
the area to see the destruction first-hand and to offer words of hope 
to the communities. The Federal disaster aid provided by this Congress 
has made an enormous difference in the lives and the future of the 
residents of the area.
    However, this recovery process will not be complete until Grand 
Forks and East Grand Forks can be protected from a repeat of last 
year's flooding. Throughout the last year, these two communities have 
worked closely with the Army Corps of Engineers in an effort to design 
a permanent flood protection project. The result of this partnership is 
a project which will include construction of a series of setback levees 
and floodwall. The levees and floodwall will provide a level of 
protection equivalent that necessary to protect against the flood of 
1997.
    According to the Corps figures, the total cost of this flood 
protection project is $300.6 million. The project's Benefit/Cost ratio 
of 1.13 was determined by the Corps to be the plan that provides the 
maximum net economic benefits. In accordance with the cost-sharing 
requirements in the 1986 WRDA, the local communities will pay for 50 
percent of the total cost of this project.
    As you know, the Administration included this project in the 
proposal forwarded to Congress earlier this year and introduced by 
request as S. 2131. It is imperative that this project come to 
fruition. Each and every citizen of Grand Forks and East Grand Forks 
needs the peace of mind that a permanent flood protection project will 
be constructed to protect the city. It is essential to the rebuilding 
and long-term recovery effort of these two communities. I would ask the 
consent of the committee to also include a statement by Grand Forks 
Mayor Pat Owens in the official hearing record.
    The flood on 1997 did not only affect Grand Forks. It also 
significantly affected the community of Grafton, North Dakota, which is 
near the confluence of the Park River and Red River, about 30 miles 
north of Grand Forks. Grafton faced tremendous overland flooding in 
addition to the waters high above the banks of the Park River. In 1997 
the northern Red River Valley was literally transformed from a river to 
the lake it was thousands of years ago after the glaciers retreated. At 
some points, in 1997 the Red River reached more than 30 miles wide. It 
was an awesome sight for anyone able to see it from the air.
    To help protect Grafton from such future flooding, the city is 
seeking to have a project along the Park River reauthorized in this 
year's WRDA legislation. The project was initially authorized in 1976 
after a Corps feasibility study found the project feasible, but the 
project was deauthorized in 1991 at the city's request because of 
financial considerations. The city of Grafton has now reconsidered the 
need for the project and the city's ability to fund the local share of 
the project, and has decided to seek its reauthorization this year.
    The project involves a bypass channel north of the city and a 
system of tieback levees west of the city. The current total cost of 
the project is estimated to be $27.3 million, about $17.7 million of 
which would be from Federal funds and $9.6 million would be non-
Federal. The project was clearly feasible when it was previously 
authorized, and no change has been made or is envisioned for the plan.
    To ensure the project remains feasible, the Corps has indicated 
they would likely conduct a ``limited reevaluation report'' to review 
the projects economic feasibility and environmental acceptability. The 
Administration has indicated, in a letter from Acting OMB Director Jack 
Lew to the North Dakota congressional delegation, that they would not 
object to reauthorization of this project if these requirements are 
met. A copy of this letter is attached to my testimony, and I ask that 
it also be included in the official record. I would also ask that the 
committee include in the hearing record a copy of the Grafton city 
council's resolution and letter of transmittal in support of 
reauthorizing this project.
    Again, thank you Mr. Chairman and Senator Baucus for this 
opportunity to make the case for these critical flood control projects. 
I urge you to authorize them, and I would be happy to help provide any 
additional information the committee finds necessary as you prepare for 
a mark-up session and flood consideration of this important piece of 
legislation.
                                 ______
                                 
             Statement of Pat Owens, Mayor, Grand Forks, ND
    Mr. Chairman, ranking member Baucus and members of the committee, I 
would like to take this opportunity to thank you for allowing me to 
submit written testimony for inclusion in the hearing record for the 
Water Resources Development Act of 1998. I urge you to authorize 
permanent flood control for the cities of Grand Forks, North Dakota and 
East Grand Forks, Minnesota a project which is vitally important to our 
community
    The winter of 1996-1997 brought record snowfall to our region. A 
total of eight blizzards between November and April had hit our 
community hard and by April 7, 1997, President Clinton had twice 
declared the entire State of North Dakota a disaster area. In April 
1997 spring flooding of the Red River at a crest of 54 feet--26 feet 
above flood stage--inundated the levee system in the city of Grand 
Forks, resulting in significant damage to the majority of residences, 
businesses and infrastructure in the city. During the flood the 
majority of the city was under mandatory evacuation and the remainder 
of the residents were asked to voluntarily evacuate because the city 
was unable to provide essential services. The city's water treatment 
plant was overcome by floodwaters and the water supply was 
contaminated. Fires in the flooded downtown area destroyed a 
significant number of businesses city offices were overtaken by 
floodwaters. The region's only full-service hospital was forced to shut 
town because the floodwaters swept across town and backed up through 
the storm sewer and sanitary sewer systems. Three of the city's schools 
were damaged beyond repair.
    Today the city of Grand Forks is on the road to recovery. Downtown 
businesses that were damaged or destroyed by the fire are either back 
up and running or rebuilding. The Pulitzer Prize winning newspaper The 
Grand Forks Herald rebuilt in the exact same location where their 
building had burned down. Groundbreakings of a downtown Corporate 
Center and County Office Building took place in May. There is a feeling 
of community spirit and re-growth in Grand Forks that could never have 
taken place without the assistance of Federal and State Governments 
non-profit organizations, people and agencies across the United States, 
and of course, the citizens and city employees of Grand Forks. I would 
like to take this opportunity to thank everyone who has helped us this 
past year. Unfortunately, the city will not be safe or secure from a 
repeat of this devastation unless permanent flood control is in place.
    Both the Cities of Grand Forks and East Grand Forks have worked 
closely with the U.S. Army Corps of Engineers to develop a permanent 
flood control project. Without permanent flood control protection, the 
city will be left in a state of uncertainty regarding future flooding. 
The project involves several miles of levees, floodwalls, and road 
raises to be constructed along both sides of the Red River, as well as 
the Red Lake River, which joins the Red River in Grand Forks.
    The project selected jointly by the cities of Grand Forks, ND and 
East Grand Forks, MN is the National Economic Development (NED) plan. 
This specific proposal provides the greatest net benefits for the price 
at a benefit/cost ratio of 1.13. The project's total cost is $300.6 
million with a 50-50 split between the Federal Government and State/
local government. The non-Federal costs have been divided between the 
two cities in a 70-30 split, with the city of Grand Forks responsible 
for $104 million. The State and local governments in North Dakota and 
Minnesota support this project. Governor Edward Schafer said he would 
provide $52 million in State funding, half of the North Dakota share 
for the non-Federal costs of the project. The administration supports 
the project and included it in the proposal they sent to Congress. The 
project also has bipartisan support by Senators Dorgan, Conrad, 
Wellstone, and Grams, and Representatives Pomeroy and Peterson.
    Mr. Chairman, ranking member Baucus, and members of the committee, 
I ask that you authorize the permanent flood project supported by the 
U.S. Army Corps of Engineers. The safety and security of the citizens 
to prevent this type of disaster from happening again can be achieved 
with a permanent flood control project. Thank you.
                                 ______
                                 
                                           City of Grafton,
                                     Grafton, ND, February 5, 1998.
Hon. Kent Conrad,
Federal Building, Bismark, SD.
    Dear Senator Conrad: The City of Grafton passed a resolution of 
intent to pursue a Park River flood diversion project. We respectfully 
request your support for the Federal funding of this project and also 
your assistance in helping guide us through the appropriate procedures.
    It is our understanding that local costs will be 35 percent of the 
total of the project. We believe that this project is an important part 
of insuring the future of our community as well as providing security 
against overland flooding.
    Thanking you I remain,
            Very sincerely yours,
                              Terrance D. Henriksen, Mayor,
                                               City of Grafton, ND.
                                 ______
                                 
                          Resolution No. 1395
       City of Grafton--A Resolution of Intent--Park River Flood 
                           Diversion Project
    WHEREAS, residents of the City of Grafton, Walsh County, North 
Dakota, have suffered severe damage and loss of property during past 
floods on the Park River, and
    WHEREAS, the Corps of Engineers, U.S. Army, has previously prepared 
a feasibility study which indicates that economic feasibility exists 
for flood protection measures; and
    WHEREAS, improvements for flood protection can be undertaken 
subject to authorization and appropriation of funds by Congress, 
provided that local interests agree that when requested they will give 
assurances satisfactory to the Secretary of the Army that they will 
share in the total cost of the non-Federal share which is estimated to 
be approximately $9.55 million; and
    WHEREAS, the City of Grafton, Walsh County, North Dakota, 
recognizes that the construction of flood protection works is essential 
to the residents of this city for their public health and general 
welfare; and
    WHEREAS, the said City of Grafton, North Dakota, has the legal 
capacity and the financial ability to share in the required local 
cooperation if and when requested,
    NOW THEREFORE BE IT RESOLVED by the City Council, City of Grafton, 
North Dakota, that it desires flood protection for its residents and 
that it desires and hereby declares its willingness and intention to 
undertake and carry out the items of local cooperation substantially as 
set forth above, as and when requested.
    BE IT FURTHER RESOLVED that certified copies of this resolution be 
furnished to and filed with the District Engineer at St. Paul, 
Minnesota, as evidence of the City's approval of a project for flood 
control in and near said City of Grafton, Walsh County, North Dakota, 
and of its intent and willingness to cooperate with the United States 
as specified.
    ADOPTED: December 11, 1997.
                                 ______
                                 
                 Executive Office of the President,
                           Office of Management and Budget,
                                      Washington, DC, June 4, 1998.
Hon. Kent Conrad,
U.S. Senate, Washington, DC.
    Dear Senator Conrad: Thank you for your letter regarding the Water 
Resources Development Act (WRDA) of 1998 and Grand Forks-East Grand 
Forks project and the Grafton project in North Dakota. You will be 
pleased to know that the Grand Forks-East Grand Forks project was 
included as one of five project authorizations in the Administration's 
WRDA 1998 proposal. This will allow for prompt construction of a 
permanent flood protection project for these communities, and so 
support rebuilding and recovery efforts. The authorization is 
contingent on final approval of the Chief of Engineers report.
    Concerning the Grafton project, thank you for informing us that the 
City of Grafton recently decided that it would like the Corps project 
to be reauthorized. Since many years have passed since the original 
authorization, the economic and environmental acceptability of the 
project would need to be updated and reconfirmed. The Administration 
would not object to reauthorization of this project as long as these 
requirements are met.
    As you know, the President strongly supports the work of North 
Dakota to resolve flooding problems in the State. Thank you for calling 
these important projects to our attention.
            Sincerely,
                                              Jacob J. Lew,
                                                   Acting Director.
                                 ______
                                 
Statement of Hon. John T. Doolittle, a Representative in Congress from 
                        the State of California
    Mr. Chairman and members of the committee, thank you for allowing 
me the opportunity to testify today on an issue of great importance to 
me, my constituents and the entire Sacramento region.
    Two years ago, I sat before this very committee and told you about 
the flood threat in Sacramento. At that time, Sacramento had just 100-
year level flood protection--giving it the dubious distinction of 
having the lowest level of protection of any major river city in the 
country.
    I explained then how the Army Corps of Engineers had determined 
that Sacramento could suffer a 250-year flood event at anytime, in any 
given year. And I told you in as explicit terms as I knew that, if we 
didn't do something right away, Sacramento would flood and people would 
die.
    On that day, along with a united congressional delegation, I asked 
you to do the only thing that would prevent Sacramento from flooding 
and, more importantly, the only thing that would protect the lives of 
the 400,000 men, women and children living there. On that day, I asked 
you to authorize the construction of the Auburn Dam.
    In addition to my asking you to do the right thing that day, I also 
pleaded with you to not do the wrong thing. I asked you to not 
authorize a flood control plan that was so dangerous it was only 
supported by a handful of extreme environmentalists who saw it as a way 
to kill the Auburn Dam.
    Their plan was called the Stepped Release Plan, and its solution 
for Sacramento was to raise the existing levees that protect Sacramento 
to such heights that they would be able to withstand almost 60 percent 
greater flood flows.
    The environmentalists supported the Stepped Release Plan because it 
would have killed the Auburn Dam. I opposed that plan because it would 
have killed people.
    Thankfully for Sacramento, others agreed with me. In fact, the 
opposition to the Stepped Release Plan was impressive and impactful:
     Butch Hodgkins, the Executive Director for the Sacramento 
Area Flood Control Agency, testified before this committee that the 
Stepped Release Plan would ``red-line'' the system leaving little room 
for error.
     David Kennedy, the State's Director of Water Resources, in 
a letter to Chairman Shuster argued that the ``deeper and faster river 
flows'' of the Stepped Release Plan ``would increase the probability of 
levee failure caused by erosion.''
     And in the most damning critique of the plan of all, Joe 
Countryman, the very engineer who designed the proposal, wrote in a 
strongly worded letter to the committee that, ``By putting more water 
through the system instead of developing upstream storage, the Stepped 
Release Plan pushes the existing system to its limits. Many experienced 
flood operators are very concerned that the 100-year old flood system 
would not be able to withstand the planned 56 percent increase in flood 
flows that the Stepped Release Plan would require.''
     Even the Sacramento Bee--a newspaper not known for 
agreeing with me on much--warned Washington about the potential dangers 
of the Stepped Release Plan, saying, ``. . . [the Stepped Release Plan] 
is the most dangerous of all the flood plans under review, posing major 
risks both for public safety and the environment. It is also by far the 
most expensive in terms of the local costs it would impose because it 
fails nearly all the tests for justifying Federal investment. 
Fortunately, it was never seriously considered by the local flood board 
. . .''
    Words like ``red-line,'' ``major risks,'' ``levee failure,'' and 
``fails all the tests'' are not normally used to describe a project 
that this committee authorizes, and thankfully for the 400,000 
residents of Sacramento put in jeopardy by that plan, this committee 
rejected the Stepped Release Plan.
    I'm sure it won't surprise you that, in their ongoing effort to 
kill the Auburn Dam, the extreme environmentalists are once again 
asking you to support this dangerous plan in this year's Water 
Resources Development Act.
    But what will surprise you is that many of those who testified 
against the Stepped Release Plan 2 years ago have now joined with the 
environmentalists in supporting the very plan they once called the most 
dangerous of all.
    You will hear from them that the Stepped Release Plan is now a safe 
plan, that the half-century old levees--as battered and unstable as 
they might be--are now certain to withstand the 60 percent greater 
flood flows, and that this plan will now adequately protect Sacramento 
from flooding.
    So you might be asking yourself, ``what's changed in the last 2 
years?'' Have things changed so much in Sacramento that ``the most 
dangerous plan of all'' can be transformed into the preferred flood 
control alternative?
    It is true that things have changed in Sacramento. But the change 
is not what you might expect given the recent switch of position by 
some, and it certainly isn't a change that would give you any more 
reason to support the Stepped Release Plan.
    The first change that occurred is that, on New Years Day of 1997, 
Sacramento--and virtually the entire State--once again suffered severe 
flooding.
    In fact, the flood was so great that the State of California called 
it ``probably the largest in the 90-year northern California measured 
record . . .''
    Over the course of the 3-day storm, 30,000 homes were ruined 
throughout northern California, $2 billion in property was flooded, 
2,000 businesses were destroyed, and 17 people were killed.
    The devastation was largely caused when more than 50 levees 
throughout northern California broke--the very same type of levees 
which protect Sacramento from flooding today and which supporters of 
the Stepped Release Plan are asking you to rely on to protect 
Sacramento.
    Fortunately for Sacramento, the American River levees held strong.
    But had it not been for an already existing dam upstream and a 
little luck from Mother Nature, Sacramento would have flooded. Indeed, 
consider the following facts and you'll see how lucky Sacramento was:
     Inflow into Folsom Reservoir peaked at 252,500 cubic feet 
per second--the greatest inflow ever measured in recorded history.
     In order to compensate for the massive inflow, for over 30 
straight hours, the Bureau of Reclamation made releases of 115,000 
cubic feet per second from Folsom Dam--the maximum amount the American 
River levees are presently designed to withstand.
     The County of Sacramento River issued a voluntary 
evacuation order.
     And most frightening of all, if the path of the storm had 
been just slightly north--as originally predicted--the Bureau would 
have most likely had to make releases of 160,000 cubic feet per 
second--well beyond the design capacity of the levees. If that had 
happened, hundreds of people would have been killed and the Federal 
Government would have spent billions bailing out Sacramento.
    The second change is that, as a result of the 1997 floods, the Army 
Corps of Engineers conducted a study to re-evaluate the flood risk to 
Sacramento. The Corps' conclusion: Sacramento's flood risk is much 
higher than what was believed just 2 years ago.
    In fact, in its recently released report, the Corps dropped 
Sacramento's flood protection by over 20 years, leaving Sacramento with 
only a dismal 77-year flood protection.
    And, finally, the third change is that the Army Corps of Engineers 
has determined that the Stepped Release Plan no longer protects against 
a 200-year flood event.
    In fact, in its recent report, the Corps dropped the level of 
protection provided by the Stepped Release Plan down to a low of only 
145-year protection, leaving the Auburn Dam as the only alternative 
able to protect against a 200-year flood event.
    This point is of critical importance, because in 1996 before this 
very committee, everyone--including the environmental community-agreed 
that Sacramento needs at least 200-year protection if it is to 
adequately protect against a catastrophic flood event.
    So, it's unquestionable that something has changed in Sacramento in 
the last 2 years: things have gotten much worse.
    And now it is clearer then ever that, without an Auburn Dam--
without a plan that provides at least 200-year protection--Sacramento 
will flood and people will be killed.
    So you may ask, given this fact, why would the Sacramento Area 
Flood Control Agency and two members of Sacramento's congressional 
delegation ask you to support a plan that is clearly inadequate and 
just as dangerous for the 400,000 living in Sacramento's floodplain?
    Why have they, at this crucial juncture, now decided to 
conveniently forget the testimony they gave in 1996 and support the 
very plan they argued 2 years ago would kill hundreds of people?
    The answer is simple: They don't believe this committee will do the 
right thing.
    They don't believe this committee will tell the environmental 
community that lives are more important than river canyons.
    They don't believe this committee will vote for the only plan 
which, for just $200 million more (in Federal dollars), will provide 
Sacramento with almost three times the level of flood protection.
    They don't believe that this committee is concerned that almost 
every expert who has looked at the Stepped Release Plan has questioned 
its reliability.
    They don't believe that members of this committee care that, after 
spending more than $.5 billion on the Stepped Release Plan, Sacramento 
will still flood and people will still die. And when that event 
happens, the $500 million ``investment'' in flood control will be 
dwarfed by the $7 billion flood relief bailout Sacramento will seek.
    To them, something is better than nothing--even if it's a dangerous 
plan, even if it diminishes their hopes for the only flood control 
solution that protects them against the flood the experts know will 
come, even if it still keeps 400,000 men, women and children in 
jeopardy.
    Mr. Chairman, I have more faith in this committee than that.
    I have faith that, when it comes right down to it, this committee 
will resist doing the politically expedient thing and instead will 
choose to do the right thing.
    We have a moral obligation to do everything within our power, 
expend every bit of energy, and risk every bit of political capital we 
posses to make sure that people don't die before we give them the flood 
protection they need.
    I'm not afraid to do the right thing. I know that my standing in 
the way of any flood protection is politically risky; I know that 
supporters of the Stepped Release Plan think I'm obstructing progress. 
But it's a risk I'm willing to take, because in the end my actions will 
save lives.
    Sacramento--and the people who speak for its residents--need to 
become realistic about the grave threat which looms over every man, 
woman and child in the floodplain.
    They need to be realistic and brave enough to acknowledge that 
regardless of the ``tinkering'' we do with its flood control system, 
those 400,000 people remain in peril until Sacramento gets at least 
200-year protection.
    Unfortunately, Sacramento doesn't care to face reality. That's why 
its coming to you today and asking you to spend $.5 billion for a plan 
that experts acknowledge falls some 50 years short of even minimally 
adequate flood protection.
    This committee needs to tell Sacramento it needs to get serious 
about protecting it's people. This committee needs to acknowledge, that 
on its own, the city is not going to muster the political courage to 
adequately address its flood control problems and that it needs 
direction and incentive.
    With that in mind, I will be sending to you shortly legislation 
which will make Sacramento get serious about its flood control problems 
and help the city protect its people.
    Each of these proposals is far more responsible, far more cost-
effective and far less controversial than the inadequate flood plan you 
have been asked to approve by some today. These initiatives include:
     Requiring FEMA to keep in effect flood insurance and 
building regulations until Sacramento has flood control which protects 
against a 200-year flood event
     Requiring that any ``stop-gap'' flood control measures 
which do not offer 200-year protection (and which are not a part of a 
larger, comprehensive, and congressionally authorized plan to protect 
against such a flood) be eligible for a maximum 25 percent Federal cost 
share
     Requiring a ``Chiefs Report'' from the Corps of Engineers 
before any flood control project for Sacramento is authorized
     Prohibiting Congress from authorizing any modifications to 
Folsom Dam until additional studies of other alternatives are completed 
by the Corps
     Requiring that any modifications to Folsom Dam fully 
mitigate for significant economic drawbacks caused by the disruption of 
traffic on Folsom Dam road
     Transferring the current Auburn Dam site to the State of 
California so that a flood control decision can be made closer to home.
    Mr. Chairman, I will close with one last thought. If we had an 
opportunity to help the people of Alabama by supporting a plan which 
would guarantee them that not one more person would be killed by a 
tornado, not one more house would be destroyed and not one more 
family's life would be changed for the worse, we would do it in a 
heartbeat--no matter how strong the environmental opposition.
    We have a similar opportunity here today. The only difference is 
that, if we act quickly enough, we can actually prevent the devastation 
from ever occurring, instead of just providing the fix for it after 
people have been killed.
    Our first step toward that end is clear. I request of you today 
that you reject the Stepped Release Plan in its entirety and join me in 
working to implement the initiatives which I have outlined to you.
    In all my years of holding elected office, I have never dealt with 
an issue of this importance, with this urgency, and with this much at 
stake. Working together, I am confident that we can work to make 
Sacramento be realistic about its flooding peril and also give 
Sacramento the protection it needs and deserves.
                                 ______
                                 
  Statement Hon. Wally Herger, a Representative in Congress from the 
                          State of California
    Mr. Chairman, members of the subcommittee, in the past 12 years, 
California has suffered three 100-year level floods. In 1986 flooding 
caused $400 million worth of damage, fortunately no lives were lost. In 
1995, however, 28 people were killed and more than $1.8 billion worth 
of damage was caused by early and late winter floods. In 1997, nine 
people were killed and more than $2.6 billion in damage occurred when 
warm winter rains melted an unusually high snow pack, forcing water 
into California's overburdened flood control system.
    Mr. Chairman, for quite some time, I have felt the most effective 
flood control policy for California is to place the highest value on 
human life and to allow preventative maintenance procedures as a 
priority over post-disaster repairs. It is important to pursue all 
possible solutions to ensure the best available flood policy for 
California. These efforts should include an aggressive approach to 
flood control that stresses improved levee systems and increased off-
stream water storage facilities. Without a combination of measures, 
levees, by themselves, provide only limited protection and provide no 
guarantee that they will not fail. In fact, it has been said that, over 
time, there are only two types of levees, those that have failed, and 
those that are going to fail. When we get warm rains on top of heavy 
snow levels, as we did prior to the flood of 1997, nothing short of 
increased water storage can prevent catastrophic flooding.
    California has an absolute need to develop aggressive flood 
prevention programs and to increase its off stream water storage. Our 
flood control system has failed four times in the past 12 years. We 
cannot, therefore, implement any program that would weaken California's 
flood control system.
    In particular, I have serious concerns about the flood control plan 
advanced by the Sacramento Area Flood Control Agency (SAFCA). This 
plan, which calls for modifications to Folsom Dam and nearly $400 
million in levee improvements along the American River, is seriously 
flawed. My strong opposition to the plan centers largely on two issues: 
(1) First, the plan fails to provide adequate flood protection. For 
example during the 1996 congressional debate on this issue, 
representatives of every aspect of northern California--including 
environmentalists--testified that any flood control plan for Sacramento 
must protect, at minimum, against a 200-year flood event. The proposal 
currently provided by SAFCA is not only extremely expensive, costing 
taxpayers $.5 billion, but it offers approximately only a 150-year 
protection. (2) Second, the plan puts the lives of 400,000 floodplain 
residents in serious danger. Again, during the 1996 debate Northern 
California residents opposed a plan nearly identical to that which was 
passed by SAFCA this year as dangerous and unworkable. At that time, 
SAFCA's own testimony said the plan would quote ``red-line'' the 
system, leaving little room for error. California's Water Resources 
Director, David Kennedy, argued quote ``deeper and faster river flows'' 
would ``increase the probability of levee failure.'' End quote. And in 
a stunning critique, the very engineer who designed the plan testified 
that quote ``by putting more water through the system . . . [the plan] 
pushes the existing system to its limits. Many experienced flood 
operators are very concerned that the 100-year old flood system would 
not be able to withstand the increased river flows called for under the 
plan.'' End quote.
    Mr. Chairman, I am not opposed to providing flood protection to 
Sacramento; however, the plan adopted by SAFCA is critically inadequate 
and dangerous. As such, I strongly oppose the plan in Congress and ask 
the members of this subcommittee to oppose the plan as well.
                                 ______
                                 
 Prepared Statement of Dr. Joseph W. Westphal, Assistant Secretary of 
                         the Army (Civil Works)
                              introduction
    Mr. Chairman and members of the subcommittee, I am Joseph Westphal, 
Assistant Secretary of the Army for Civil Works. Accompanying me are 
Major General Russell L. Fuhrman, Director of Civil Works for the Army 
Corps of Engineers and Michael Davis, Deputy Assistant Secretary of the 
Army for Civil Works. We are here today to present the Department of 
the Army proposals for a Water Resources Development Act of 1998 and to 
respond to your questions. We appreciate the opportunity to work with 
the Congress on this important legislative initiative. Further, it is 
an honor that my first testimony as Assistant Secretary is before this 
distinguished subcommittee on such an important piece of legislation.
             history and missions of the corps of engineers
    We in the Department of the Army are proud of the long and 
distinguished history of the Army Corps of Engineers and its service to 
the country. Since its founding in 1775, the Corps of Engineers has 
contributed to this Nation, through its engineering support to the 
military, as the lead agency for the development of the Nation's water 
resources, and through programs that restore and protect our 
environment. Early on, our missions included such activities as 
construction of coastal fortifications and lighthouses, surveying and 
pathfinding on the frontier, construction of public buildings, snagging 
and clearing of river channels, and construction and operation of early 
national parks such as Yellowstone.
    To enhance National defense and promote economic development, our 
first general Civil Works mission was to help develop this country's 
ports and harbors and an extensive inland navigation system. As areas 
along our rivers and deltas were developed for agriculture and 
commerce, flooding and associated flood damages also became a major 
concern. The Mississippi River Commission was formed in 1879 in 
acknowledgment of the need for comprehensive water resources 
development. Major floods in the Mississippi River basin in the early 
1900's resulted in a new role for the Corps of Engineers--flood 
control. The Flood Control Act of 1936 recognized flood control as a 
proper activity of the Federal Government and gave responsibility for 
most projects to the Corps of Engineers. This led to numerous flood 
control projects (dams, levees and channels) in the decades of the 
forties, fifties, and the sixties. Many of these projects, particularly 
the dams and their reservoirs, were multipurpose, providing flood 
control, hydropower, water supply, navigation, recreation and fish and 
wildlife enhancement. Although these projects served critical purposes, 
the lack of good floodplain management in many instances resulted in 
extensive development in the floodplains, often placing more people and 
development at risk. In the decades of the seventies, eighties and the 
nineties, as numerous floods exceeded the capacity of some flood 
control projects and caused extensive damage, it became apparent that 
better management of the floodplains and a comprehensive strategy for 
flood damage reduction or mitigation was necessary. Today, we've 
learned not to use the term ``flood control'' as it creates a false 
sense of security that may be not only unrealistic, but also dangerous. 
In the past decade, we've gained a more realistic sense of Mother 
Nature's propensity to demonstrate that floodplains were designed to 
receive flood waters. Instead we now focus our efforts on reducing 
flood damages and, where appropriate, moving people out of harms way.
    Army Corps of Engineers Main Mission Areas:

         Navigation
         Flood Damage Reduction
         Environmental Restoration

    Our third major mission; environmental protection and restoration 
is not a completely new mission area for the Corps. In fact, this 
mission had its origin in the Refuse Act of March 3, 1899, which 
granted the Secretary of the Army authority to control certain 
discharges into and along the navigable waters of the Untied States. An 
excerpt is quoted below:

          ``It shall not be lawful to throw, discharge, or deposit, or 
        cause, suffer, or procure to be thrown, discharged, or 
        deposited either from or out of any ship, barge, or other 
        floating craft of any kind, or from the shore, wharf, 
        manufacturing establishment, or mill of any kind, any refuse 
        matter of any kind or description whatever other than that 
        flowing from streets and sewers and passing therefrom in a 
        liquid state, into any navigable water of the United States, or 
        into any tributary of any navigable water from which the same 
        shall float or be washed into such navigable water; and it 
        shall not be lawful to deposit, or cause, suffer, or procure to 
        be deposited material of any kind in any place on the bank of 
        any navigable water, or on the bank of any tributary of any 
        navigable water, where the same shall be liable to be washed in 
        such navigable water, either by ordinary or high tides, or by 
        storms or floods, or otherwise, whereby navigation shall or may 
        be impeded or obstructed: . . .''

    The Corps environmental mission has been expanding over time with 
major changes in environmental law and policy, such as the National 
Environmental Policy Act of 1969, which requires each Federal agency to 
assess fully its actions affecting the environment, and the Federal 
Water Pollution Control Act of 1972 (commonly called the Clean Water 
Act) in which the Corps was given a major responsibility for regulating 
the discharge of dredged or fill material into all of our Nation's 
waters, including wetlands. Subsequent Water Resources Development Acts 
have expanded further the environmental protection and restoration 
mission of the Corps of Engineers.
    While the Corps has undertaken and continues to execute many Civil 
Works missions, to include disaster response, hydropower production, 
recreation, water supply, coastal shore protection, natural resources 
management and development of environmental infrastructure, the three 
primary missions of navigation, flood damage reduction, and 
environmental protection and restoration are the priority outputs of 
today's Civil Works program.
            importance of a water resources development act
    We share with the Congress a firm commitment to water resources 
development and the biennial authorization cycle with the following 
goals:
     A strong water resources development program is a sound 
investment in our Nation's economic future and environmental stability. 
Communities across the country rely on water resources projects to 
reduce flood damages, compete more efficiently in world trade, provide 
needed water and power, provide recreational opportunities, and protect 
and enhance our rich environmental resources.
     We have a responsibility to our project sponsors who have 
been doing their part by sharing feasibility study costs and 
construction costs. Our goal is to match our sponsors' commitment with 
realistic, cost efficient schedules, and timely authorization for 
justified and environmentally acceptable projects.
     The 2-year authorization shows our support for orderly 
water resources development. A water resources development act is the 
principal vehicle for obtaining necessary legislation to authorize the 
projects that our studies have shown to be good Federal investments. 
Legislation is often necessary to realize the goal of making our 
programs more effective and efficient by addressing policy issues.
    As you are well aware, there are many pressing needs for water 
resources development in this country. We must work together to address 
these problems in the full light of our fiscal capabilities and 
constraints. To help us meet our mutual objectives, we suggest the 
following principles be utilized as we formulate a final Water 
Resources Development Act for 1998:
     Preservation of the Concept of Cost Sharing. At the heart 
of the Water Resources Development Act of 1986 were the beneficiary pay 
reforms which included cost sharing. This allowed local sponsors the 
opportunity to be active participants in the water resources 
development process, thereby revitalizing the program. Cost sharing 
serves as a market test of a project's merits, ensures active 
participation by project sponsors and beneficiaries, and ensures 
project cost effectiveness. We have found it to be an eminently 
successful policy. The cost sharing reforms enacted in WRDA 1996 should 
also be preserved.
     Fiscal Responsibility. The Nation's water resources 
infrastructure must be maintained and improved to meet future needs, 
but in consonance with other national priorities and a balanced budget. 
We should never create false hope by authorizing projects that we 
cannot reasonably expect to fund or complete within a reasonable 
timeframe. In light of the $20 billion backlog of ongoing Corps 
construction projects, and other authorized projects awaiting 
construction, the dollar magnitude for new projects and programs in the 
Administration's proposal is constrained. It is limited to authorizing 
vital new projects and programs, some of which are expected to be 
phased in over a number of years, to give priority to completion of 
ongoing construction projects. The total cost of the bill is $1.462 
billion, with a Federal cost of $829 million and a non-Federal cost of 
$633 million. This will allow us to move toward a more sustainable 
long-term construction program and more timely project delivery to non-
Federal sponsors. To authorize a significantly greater number of new 
projects and programs than proposed by the Administration would be 
untenable.
     Authorization of Justified Projects That Have Completed 
Administration Review. To justify the authorization of appropriations 
of constrained Federal dollars, we must assure the public that proposed 
projects have passed a full review and are in accord with the Federal 
laws and policies established to protect the environment and to set 
priorities for the use of those funds. The Administration urges 
Congress to restrict new authorizations to justified projects likely to 
be funded over the next several years.
           the army civil works legislative program for 1998
    The Army Civil Works legislative program was forwarded to the 
Congress on April 22, 1998. This program consists of important 
legislative proposals for the administration of the Civil Works program 
and authorizations for projects recommended by the Administration. I 
would like to emphasize some of the more important provisions below:
Challenge 21--Flood Hazard Mitigation and Riverine Ecosystem 
        Restoration
    Challenge 21, the centerpiece of the Army Civil Works Legislative 
Program for 1998, will provide the Nation with a comprehensive tool for 
reducing flood damages. Part of a $25 million Fiscal Year 1999 budget 
request, this initiative expands the use of non-structural options to 
achieve the dual purposes of flood damage reduction and the restoration 
of riverine ecosystems. Challenge 21 responds to those communities who 
have expressed a strong desire to aggressively reduce or even eliminate 
repeated losses and improve the quality of their environment by 
creating partnerships with these State, tribal and local entities, 
allowing their priorities to be realized.
    The Mississippi River floods of 1993 and the floods of 1997 
revealed both strengths and weaknesses in the way we manage floods and 
have taught us important lessons about Federal floodplain management. 
These record floods have submerged entire towns; destroying homes, 
businesses, farms, wildlife and, in some cases, taking human lives. In 
response we, as a Nation, are now spending over $4 billion a year for 
disaster recovery due to floods. And while the dams and levees we've 
built continue to prevent billions of dollars in flood damages, many 
communities are still flooded--often on a frequent basis. We have 
learned several lessons from these tragic events.

          Challenge 21 will:
           Focus on non-structural solutions to reducing flood 
        damages while maintaining the flexibility to use more 
        traditional structures (e.g., levees, flood walls) where 
        appropriate;
           Create a framework for more effective Federal 
        coordination of flood programs;
           Create a partnership with the community to develop a 
        comprehensive solution to reducing damages and improving 
        quality of life; and
           Focus on watershed-based solutions that can include 
        the restoration of riparian and wetland ecosystems.

    One very important lesson we've learned is that structural flood 
control measures are not always successful in preventing the flooding 
of our communities. In some cases, no matter what we do and no matter 
how much money we spend, the waters still come. In those cases, we 
should focus less on trying to control flood waters and more on 
reducing the negative impacts of flood damages. This leads us to 
another important point--paying billions of dollars annually for 
repeated damages is not a fiscally sustainable course. We must break 
this cycle and aggressively look to other solutions. Since flooding 
cannot always be prevented, we can reduce our national disaster relief 
bill by shifting our focus to include a greater use of non-structural 
flood damage reduction measures.
    In some cases, structural solutions have lulled us into a false 
sense of security as we build closer and closer to the river. In fact, 
in many cases, development and the resulting increase in stormwater 
run-off have dramatically changed the hydrology of our floodplains by 
significantly reducing their ability to store water. In addition, 
development in the floodplain has often had devastating effects on the 
natural ecosystems and habitat along our rivers. Thus, another lesson 
we've learned is that over-development of our floodplains has, in some 
cases, actually increased the risk of flooding. This committee has been 
helpful in this area by passing a WRDA in 1996 that requires that 
communities prepare floodplain management plans as a condition for 
Federal flood projects. However, we need to do more.

          Examples of Non-structural Approaches:
           Removal of floodplain structures
           Floodproofing
           Flood warning systems
           Wetlands restoration

    Challenge 21 responds, through its focus on nonstructural 
alternatives to flood protection, to the first lesson, that structural 
flood control measures are not a panacea. Challenge 21 will work with 
other Federal agencies to move families and businesses out of harm's 
way, where appropriate, thereby returning the floodplains of rivers and 
creeks to a condition where they can naturally moderate floods, while 
maintaining the flexibility to use more traditional structures and 
ultimately reducing our national natural disaster relief bill. 
Potential solutions will include an array of cost-effective non-
structural and structural measures. Through these measures, Challenge 
21 will also provide benefits to our environment. For example, a 
project might include the relocation of threatened homes and businesses 
and the restoration of wetlands and other natural floodwater storage 
areas within the floodplain.

          Quick Facts on Challenge 21:
           Six year programmatic authority for the Corps of 
        Engineers;
           $325 million total Corps program cost;
           $75 million Corps per project cap;
           Projects subject to specific criteria;
           Projects will be cost-shared 65 percent Federal/35 
        percent non-Federal;
           Project notification to Congress required;
           Report to Congress on program accomplishments 
        required by 2004.

    Structural approaches to flood protection will continue to play an 
important role in our efforts to reduce flood damages when such 
solutions are economically and environmentally justified. Challenge 21 
projects may, in fact, include structural components as part of an 
overall flood damage reduction strategy. In short, with Challenge 21, 
the Corps is expanding its flood damage reduction mission portfolio to 
more effectively meet community needs.

        Western Governors' Association
          In their December 1997 Report, WGA recommended that ``Federal 
        and State priorities should encourage relocation and 
        restoration of the natural beneficial functions of flood plain 
        areas.''
          Subsequently in a June 9, 1998 letter to congressional 
        committees, WGA wrote, ``The Western Governors find that the 
        concepts behind Challenge 21 to be consistent with many of the 
        priorities we identified. . . . in our December 1997 report. We 
        commend the Corps for putting forward this proposal.

    Challenge 21 will also improve inter-agency and inter-governmental 
coordination. The Western Governor's Association's January 1997 report, 
``An Action Plan for Reducing Flood Risk in the West'', not only 
recommended nonstructural floodplain management tools, but also 
outlined State and Federal roles and responsibilities. These Governors 
recognized that no one level of government will solve this problem. It 
will take the combined, coordinated effort of Federal, State, tribal, 
and local government, working in cooperation with communities, to be 
successful. The Corps, along with Federal Emergency Management Agency 
(FEMA), the Department of the Interior and the Environmental Protection 
Agency (EPA), have signed a memorandum of agreement with the Western 
Governor's Association (WGA) to implement specific actions of 
coordination. Thus, another lesson we've learned is that Federal 
floodplain management policy needs to be better coordinated and the 
work needs to be shared not only throughout the Federal Government, but 
also by creating partnerships with State, tribal, and local entities.
    Challenge 21 projects will also be coordinated fully with Federal, 
State, tribal and local communities. Because the cost of projects will 
be shared, no project will be implemented unless State, tribal and 
local sponsors support it. Thus, through coordination with other 
Federal agencies and State and local communities, Challenge 21 
addresses another lesson we've learned from the past decade of floods--
flood damage reduction efforts must include partnering between Federal 
agencies and State, tribal and local communities.
    Watershed by watershed, Challenge 21 builds on existing programs 
and initiates and expands partnerships with other Federal and non-
Federal national and local entities. Key Federal partners include FEMA 
and the Department of Agriculture. Through Federal partnering, a 
Challenge 21 project could include an urban structure relocation piece 
led by FEMA and a rural wetland restoration piece led by the Department 
of Agriculture's Natural Resources Conservation Service. Thus, 
Challenge 21 relies on the collective knowledge, expertise and 
authorities of many Federal water resource agencies.
    The Willamette River in Oregon is a good example of a potential 
Challenge 21 project. The existing system of Corps projects in the 
Willamette controls only about 27 percent of the basin runoff and is 
capable of controlling up to a 2 to 5 year event. After a thirty year 
absence, major flooding became a real and powerful presence in February 
1996 for the Willamette River Basin. Flood frequencies ranged from a 2 
to 200 year event, 23 counties were declared disaster areas, numerous 
cities and communities suffered major damages and agricultural losses 
were widespread. Due to continued population growth and corresponding 
development in the Willamette floodplain, the Willamette River Basin 
has lost much of its natural flood storage capacity and a significant 
flood risk remains.
    In 1996, the conservation group River Network completed a study of 
the hydrologic feasibility and benefits of restoring floodplains for 
natural flood management in the Willamette Valley. They concluded that 
floodplain restoration opportunities exist to reduce flood hazards to 
homes, public structures and farms while allowing for fish and wildlife 
habitat restoration. In addition, the Willamette Basin Floodplain 
Restoration Study is a new start General Investigation study for fiscal 
year 1998. The proposed study and project focus on benefits of flood 
damage reduction and ecosystem restoration. This provides an excellent 
opportunity to provide additional flood protection for the Willamette 
Basin through nonstructural floodplain restoration measures.

          National Association of Flood and Stormwater Management 
        Agencies Support Challenge 21

          In an April 14, 1998, letter, NAFSMA wrote, ``The NAFSMA 
        Board of Directors strongly supports Challenge 21 . . . and are 
        very encouraged by this important new initiative for the U.S. 
        Army Corps of Engineers.''

    Non-structural flood damage reduction measures are gaining momentum 
across the country. We are very interested in pursuing such approaches 
as we work with communities to reduce flood damages. It is important to 
note that this is not just an Army initiative--many communities and 
floodplain interest groups support Challenge 21 nonstructural 
approaches. In a March 31 hearing before the House Transportation and 
Infrastructure Committee, the National Association of Flood and 
Stormwater Management Agencies, the National Wildlife Federation, 
American Rivers and the Association of State Floodplain Managers all 
expressed support for nonstructural solutions. And the National 
Association of Flood and Stormwater Management Agencies and the 
National Association of Counties, recently joined the other groups in 
endorsing Challenge 21.

          ``. . . Be it resolved that the National Association of 
        Counties supports the watershed based, multi-agency initiative 
        for Riverine Ecosystem Restoration and Flood Hazard Mitigation 
        (Challenge 21) . . .''--National Association of Counties March 
        1, 1998 Resolution

    We have learned a great deal from the floods of the past and these 
important lessons have prompted the Administration to find a more 
sustainable approach to reducing flood damages and restoring our 
riverine ecosystems now . . . an approach that plans for the future 
before the flood occurs. We believe that Challenge 21 is that approach. 
Challenge 21 will attempt to find permanent nonstructural solutions to 
reduce flood damages that, in the long run, will reduce the natural 
disaster bill to the American taxpayer.
    The recent floods associated with El Nino have reinforced the key 
lessons we've learned from the Mississippi River floods of 1993. 
Despite our continued reliance on structural flood control measures, 
the overall cost of flooding disasters has only increased. Challenge 21 
attempts to break the cycle of repeated flooding by addressing the weak 
links in our national floodplain management policy with a new 
initiative that not only reduces the devastating effects of flooding 
but also restores our riparian environment. Working together to enact 
Challenge 21, the Congress and the Administration can exercise the 
leadership that is needed to provide communities with an important new 
tool in our flood damage reduction tool box.
Shore Protection Policy
    The Administration is proposing a new approach to shore protection 
that would allow a renewed commitment to shore protection in the Army 
Corps of Engineers. With the adoption of this approach, the 
Administration will consider, consistent with overall funding 
constraints, shore protection projects on an equal basis with other 
water resources development projects.
    As you know the Administration and the Congress have not had a 
common vision of the Nation's shore protection policy. The 
Administration has had two concerns. First, commitments on existing 
shore protection projects that involve periodic nourishment require a 
significant amount of future Federal funds. We have found it difficult 
to initiate new projects in the face of the cost of these commitments. 
Figure 1 below shows the number of shore protection projects where 
initial construction was completed by the Corps over the last 50 years. 
Of these projects, the Corps has a responsibility to participate in the 
periodic nourishment of about 46 projects. In addition, there are 11 
authorized projects under construction, 14 authorized projects awaiting 
construction, with another 17 in the design phase. In addition to 
these, the Corps has almost 30 potential projects being evaluated in 
feasibility studies. These all show an even greater demand for future 
Federal funding of hurricane and storm damage reduction projects.


    The second Administration concern is that while these shore 
protection projects produce storm damage prevention benefits, they also 
provide local recreation benefits, and that some of the revenue created 
in the areas that these projects protect should be dedicated to shore 
protection projects that provide such recreational opportunities. To 
resolve both these concerns, we have included in the Army Civil Works 
legislative program a proposal to advance the dialog on how to 
reconcile this important issue.
    Under our proposal, the cost sharing for the initial construction 
of shore protection projects will remain the same (generally a 65 
percent Federal share). However, the cost sharing for periodic 
nourishment of shore protection projects would change. Our 
recommendation is that when the project protects a developed area with 
shores under public control, the cost sharing of periodic nourishment 
would generally be 35 percent Federal and 65 percent non-Federal. When 
the project protects undeveloped private property, the cost sharing of 
periodic renourishment would remain at 100 percent non-Federal; and 
when the project protects Federal property, the cost sharing of 
periodic renourishment would remain at 100 percent Federal. We believe 
this is a fair solution to the difficult problem and that it will free 
up Federal funds and allow new shore protection projects to be 
constructed.
                      other wrda 1998 initiatives
Everglades and South Florida Ecosystem Restoration
    This provision extends the authorization of appropriations for 
critical ecosystem restoration projects in South Florida through fiscal 
year 2000 to take advantage of the synergy and collaborative approaches 
that have evolved to implement a shared vision for ecosystem 
restoration. Funds were not available to begin work on this important 
project in FY97, as anticipated. Despite the lack of funding, the 
Corps, in partnership with the Department of Interior, the State, and 
many interested parties, compiled and prioritized a list of 38 Critical 
Projects, whose implementation will provide immediate, substantial and 
independent ecosystem restoration benefits. The Critical Projects 
address a suite of environmental restoration and protection needs, 
involving endangered species, water supply and quality, enhanced water 
control, nuisance exotic species control, habitat protection and 
restoration and non-point source pollution reduction. These projects 
have been nominated and formulated by all levels of government, 
interested parties, and Indian Tribes. Fourteen Letter Reports have 
been received for Critical Projects, with ten approved for 
implementation and the remaining four are under consideration for 
approval.
    While not part of this legislative proposal, I am pleased to report 
that work on the Comprehensive Plan required by Section 528 of WRDA 
1996 is on schedule, and work on six alternatives will be finished in 
time for an initial draft alternative to be identified by July. A draft 
Comprehensive Plan will be ready for public review in October 1998. The 
results are encouraging in terms of achieving and balancing restoration 
and water supply needs. Extending the authorization of appropriations 
will enable the partners to achieve fully the environmental restoration 
objectives set forth in Section 528 of WRDA 1996.
Lower Missouri River Aquatic Restoration Projects
    The purpose of this provision is to recognize and build on the 
existing efforts to restore and protect the Missouri River ecosystem 
between Gavins Point Dam and the Missouri River's confluence with the 
Mississippi River. This proposal recognizes the efforts of navigation, 
agriculture, and environmental communities in developing a consensus 
and balanced approach to ecosystem restoration in this reach of the 
Missouri River. Specifically this proposal will authorize a 
comprehensive report to be completed at full Federal expense within 1 
year after funds are made available. The report will identify a general 
implementation strategy and overall plan for environmental restoration 
and protection along the Lower Missouri River between Gavins Point Dam 
and the confluence of the Missouri and Mississippi Rivers and recommend 
individual environmental restoration projects that can be considered by 
the Secretary for implementation under section 206 of the Water 
Resources Development Act of 1996.
Management of Natural Resources
    There are several measures that will help us to better manage our 
important natural resources, primarily at our numerous lakes and 
reservoirs. One of our more important measures will allow our resource 
managers to retain funds resulting from increased collections of 
recreation user fees above the baseline collections. Eighty percent of 
the increased collections would go to the site from which the fees were 
collected and 20 percent would be used agency wide. This will serve as 
an incentive to improve collection of recreation user fees. Another 
important provision will allow the Department of the Army to enter into 
cooperative agreements with such organizations as the Student 
Conservation Service to allow students and faculty to participate in 
recreation and natural resource management to enable us to better 
utilize limited operations and maintenance funds.
Measures for Efficient Program Management
    There are several measures that will allow us to improve our 
program management. For example, we have included proposals to allow us 
to use public or non-profit organizations as project sponsors on 
aquatic ecosystem restoration and beneficial uses of dredged material 
projects. Another example is a provision that would allow the Secretary 
of the Army to accept non-Federal funds from State and local 
governments to expand our services in compiling and transmitting 
information on floods and flood damages.
                         project authorizations
    Included in the Army Civil Works legislative program are projects 
recommended for authorization that have been reviewed and approved by 
the Administration and a conditional authorization for Grand Forks, 
North Dakota and East Grand Forks, Minnesota. Additional projects are 
under review at the current time, and these will be furnished to you as 
soon as Administration review is complete. The projects included are 
listed below:
     American River, Sacramento, California. The flood damage 
reduction project described as the Folsom Stepped Release Plan in the 
U. S. Army Corps of Engineers Supplemental Information Report for the 
American River Watershed Project, California, dated March 1996, at a 
total cost of $464,600,000, with an estimated Federal cost of 
$302,000,000 and an estimated non-Federal cost of $162,600,000. This 
project would both supplement the levee stabilization and strengthening 
``common elements'' that were authorized in the Water Resources 
Development Act of 1996 and provide a much needed higher level of flood 
protection to Sacramento, California. We envision that the ``common 
elements'' would be completed first, and after a reevaluation to 
account for changes that have taken place since the Corps study was 
competed, the Corps would implement modifications to the Folsom Dam and 
Reservoir. As the third phase of the plan, the Corps would, after 
additional studies and a report back to Congress, implement the 
downstream levee and associated works called for in the Stepped Release 
Plan.
     Amite River and Tributaries, Louisiana, East Baton Rouge 
Parish Watershed. The project for flood damage reduction and 
recreation, Amite River and Tributaries, Louisiana, East Baton Rouge 
Parish Watershed: Report of the Chief of Engineers, dated December 23, 
1996, at a total cost of $110,045,000, with an estimated Federal cost 
of $71,343,000 and an estimated non-Federal cost of $38,702,000.
     Guanajibo River, Puerto Rico. The project for flood damage 
reduction, Guanajibo River, Puerto Rico: Report of the Chief of 
Engineers, dated February 27, 1996, at a total cost of $27,441,000, 
with an estimated Federal cost of $17,837,000 and an estimated non-
Federal cost of $9,604,000.
     Rio Nigua at Salinas, Puerto Rico. The project for flood 
damage reduction, Rio Nigua at Salinas, Puerto Rico: Report of the 
Chief of Engineers, dated April 15, 1997, at a total cost $13,565,000, 
with an estimated Federal cost of $7,079,000 and an estimated non-
Federal cost of $6,486,000.
     Grand Forks, North Dakota, and East Grand Forks, 
Minnesota. The project for flood damage reduction and recreation, Grand 
Forks, North Dakota and East Grand Forks, Minnesota consisting of 
setback levees and floodwalls, subject to the issuance of a report by 
the Chief of Engineers and approval of that report by the Secretary of 
the Army at a total cost of $281,754,000, with an estimated Federal 
cost of $140,877,000 and an estimated non-Federal cost of $140,877,000.
    The inclusion of the Grand Forks, North Dakota, and East Grand 
Forks, Minnesota project in the Army Civil Works Legislative Program 
for 1998 as a contingent authorization is an unusual step for the 
Administration. However, it is one that is justified as an essential 
step to help those communities rebuild after the devastating floods of 
May 1997.
                     harbor maintenance trust fund
    As you are well aware, the Supreme Court issued its decision in the 
case United States, Petitioner, versus United States Shoe Corporation 
on March 31, 1998. The Court determined that the harbor maintenance tax 
is unconstitutional because it violates the Export Clause of the 
Constitution. According to the Court, a user fee that is a `` . . . 
charge designed as compensation for government-supplied services, 
facilities, or benefits. . . . '' would be acceptable in lieu of the 
harbor maintenance tax. On May 20, 1998, Franklin D. Raines, Director, 
Office of Management and Budget forwarded the Administration's proposal 
to establish a Harbor Services Fund (HSF) to the Committee on 
Environment and Public Works of the Senate, the Committee on 
Transportation and Infrastructure of the House, and to the 
Subcommittees on Energy and Water Development, Committee on 
Appropriations of both the Senate and the House. Director Raines stated 
the Administration's view that the users of the Nation's ports should 
be responsible for the costs of ensuring a safe and competitive port 
system. The HSF would be used to finance both operation and maintenance 
and the new construction required to maintain a competitive port 
system.
    Following up on the May 20 letter, the Administration expects to 
transmit, for Congress' consideration, a legislative proposal that 
would impose a user fee on commercial vessels. The fees would be based 
on benefits commercial vessels receive from Government harbor 
development, operation, and maintenance services at ports. The intent 
would be to recover fees, in the aggregate, that annually would 
generate funds sufficient to pay the Army's harbor development, 
operation and maintenance expenses.
                       civil works strategic plan
    The Administration's Water Resources Development Act proposal 
builds upon the goals set out in the Strategic Plan for the Civil Works 
Program. In August 1997, a draft of the Strategic Plan for the Civil 
Works Program of the Army Corps of Engineers was distributed for 
review. After receiving numerous, extensive comments from Congress, 
other Federal agencies, and stake-holders, the Strategic Plan was 
completely rewritten. We worked hard to address the comments provided 
by all of the groups and believe that our final submission addressed 
all of the concerns and that there were no contrary views. The 
strategic plan identifies six goals, as follows:
    1. Provide the water resources infrastructure to enhance the 
Nation's economic well-being,
    2. Lead in the management, protection, and restoration of the 
Nation's land and water resources,
    3. Provide timely, effective, and efficient disaster preparedness, 
response, recovery, and mitigation,
    4. Improve the delivery of program results for our current 
customers, and maintain these capabilities in order to respond to the 
engineering and technical challenges of the future,
    5. Develop, motivate, and retain an empowered, world-class 
workforce, and
    6. Be a leading Army program in effectively and efficiently 
applying its resources to achieve its mission.
    The Government Performance and Results Act (GPRA) strategic plan 
outlines performance measures for each of these goals. For example, we 
have set our goal to reduce the time form the beginning of the 
reconnaissance study to being eligible for construction funding 
(project development time) from the current baseline of an average of 
12 years. Our short-term performance goal is to reduce project 
development time by 10 percent (to 10.8 years), and by 33 percent (to 8 
years) in the long-term. To assure that new investments achieve 
intended program results, we have set construction performance goals to 
monitor and maintain the economic justification for project (benefit-
cost ratio) from beginning of construction through to completion. Our 
plan also sets operational goals for completed projects, such as 
maintaining existing commercial navigation and flood damage reduction 
facilities so they will be fully operational at least 95 percent of the 
time.
    We believe these are important steps to help ensure better 
performance and improved customer satisfaction for the Civil Works 
program. We look forward to working with this subcommittee as we 
implement this plan and continue to improve our performance.
                               conclusion
    Mr. Chairman, this concludes my testimony. I can assure you that 
our top priority at Department of Army and the Corps of Engineers is to 
work with your committee to ensure passage of a Water Resources 
Development Act this year. We are working closely with your staff to 
provide information and answer questions. We will continue to work and 
cooperate with you to the fullest extent to complete work on this 
important legislation.
                                 ______
                                 
   Responses of Dr. Joseph W. Westphal to Additional Questions from 
                             Senator Chafee
    Question 1. You indicated in your testimony that the so-called 
``Challenge 21'' proposal for non-structural approaches to flood plain 
management is perhaps the top priority for the Administration in this 
year's WRDA.
    Question 1(A). Do you have candidate projects/locations in mind?
    Response. We do not have any specific candidates or projects in 
mind. All floodplains are eligible for the program. Typically, studies 
and/or solutions will be undertaken in areas where frequent or severe 
flooding has occurred, emergency assistance has been necessary, flood 
hazards have increased due to changes in hydrologic and hydraulic 
regimes, development is encroaching on floodplains, important 
floodplain functions and values need maintenance or restoration, or 
substantial differences exist between planned and actual development in 
watersheds. Solutions must include both flood hazard mitigation and 
riverine ecosystem restoration and have strong local support. Using 
these criteria, an informal survey of potential candidates was 
conducted. In response to an initial survey of potential projects, 
Corps districts have identified more than 75 potential candidates. 
However, this survey was conducted merely to gain a general sense of 
the types of projects that might be eligible for the Challenge 21 
program and was not intended to be exclusive. In addition to this 
preliminary survey, we have received many submissions of potential 
candidates from stakeholders around the country interested in the 
program.

    Question 1(B). Why is it so important to get a ``blanket 
authorization'' for this program? In other words, why shouldn't the 
Congress authorize these projects individually (after receiving the 
requisite reports) as we do for other projects of this size?
    Response. Programmatic authority is important for timely 
implementation and flexibility. The Challenge 21 program is preventive 
in nature; i.e., it addresses the threat of floods before the waters 
come, rather than reacting to the loss of life and property. Timely 
implementation of solutions is critical to the effectiveness and 
success in preventing flood damages and restoring important ecosystem 
functions before another flood.

    Question 1(C). Why is it the case that non-structural flood control 
projects (which typically involve: the removal of flood plain 
structures; flood proofing; flood warning systems; and wetlands 
restoration)--which as a general matter I support--have had such a 
tough time getting off of the ground? Are there difficulties with the 
economic justification of such projects?
    Response. Over the years, the Corps has successfully implemented a 
number of projects which included nonstructural flood damage reduction 
measures. The Corps does have some difficulty in moving forward with 
nonstructural solutions for a number of reasons, ranging from economic 
justification to sponsor acceptance. The costs of a nonstructural 
project are often higher than a structural project that could protect 
the same area. Nonstructural measures normally require modification (or 
removal) of each structure, whereas construction of a single structural 
feature would protect the entire area under consideration. In addition, 
the procedures in place for evaluating both structural and 
nonstructural flood damage reduction measures limit the inclusion of 
nonmonetary environmental outputs in the benefit/cost ratio. The 
Challenge 21 authorization would eliminate this limiting factor, 
thereby allowing the Corps to more easily justify and implement 
nonstructural measures.

    Question 2. What sort of dollar levels does the Administration 
envision for WRDA 1998?
    Response. In light of the $20 billion backlog of ongoing Corps 
construction projects, and other authorized projects awaiting 
construction, the dollar magnitude for new projects and programs should 
be limited to vital new projects and programs to give priority to 
completion of ongoing construction projects. The total cost of the 
Administration's bill is $1.462 billion, with a Federal cost of $829 
million on a non-Federal cost of $633 million. This will allow us to 
move toward a more sustainable long-term construction program and more 
timely project delivery to non-Federal sponsors.

    Question 3. Tell me more about your shore protection proposal. As 
you indicated in your testimony, the Administration suggests that we 
increase the renourishment costshare for non-Federal sponsors from 35 
percent to 65 percent.

    Question 3(A). How much money will that save the Administration on 
an annual basis?
    Response. Information is not available to forecast this with any 
certainty. The Administration proposal is for projects not yet 
authorized and most of these potential new projects have not advanced 
to a stage where the savings can be estimated with any degree of 
confidence. However, to get some feel for the difference the 
Administration's proposed cost sharing would make, the Corps evaluated 
30 already authorized projects that would likely reflect the future mix 
of shore protection projects. Based on this analysis, the proposed cost 
sharing would result in an approximately $30 million cost reduction on 
an annual basis.

    Question 3(B). If the Congress were to approve this proposal, would 
that mean that the Administration would resume budgeting for shoreline 
projects?
    Response. Yes. With the adoption of this proposal, the 
Administration will consider, consistent with overall funding 
constraints, shore protection projects on an equal basis with other 
water resources development projects.

    Question 3(C). What do the shoreline interests have to say about 
this?
    Response. Shoreline interests acknowledge that, in order to keep 
abreast of the increased demand for new projects, they must allow for 
changes in cost sharing. They are aware of the current Federal budget 
situation and are willing to accept revisions in cost sharing if it 
will allow projects to move forward quicker.

    Question 3(D). Have you considered shortening the 50-year 
renourishment period?
    Response. Yes, but it was felt that the approach chosen by the 
Administration was the most fair and equitable solution for shore 
protection projects.

    Question 4. The Director of the Rhode Island Coastal Resources 
Management Council (Grover Fugate), who will testify as part of the 
next panel, believes that sand replenishment on beaches should serve as 
an interim protection measure while longer term hazard mitigation is 
being implemented. Have you ever analyzed the notion of temporarily 
increasing the Federal cost share of shore protection projects where a 
locality or State is willing to relocate/elevate structures? It seems 
to me that might be one way to provide an incentive to permanently 
remove development/structures from harm's way. The increased Federal 
cost share would only last for the period (maybe 1020 years) in which 
the non-Federal sponsor is taking steps to conduct verified pre-
disaster hazard mitigation.
    Response. I do not believe that the Corps has evaluated this type 
of proposal, but we would be willing to work with the Rhode Island 
Coastal Resources Management Council on such a proposal. However, I do 
believe that 10-20 years is far too long a time period for pre-disaster 
hazard mitigation. Such structures should be removed as soon as 
possible.

    Question 5(A). Do we need to address the Harbor Maintenance Trust 
Fund in WRDA 1998?
    Response. Technically, no. However, since the Supreme Court found 
that the Harbor Maintenance Tax was unconstitutional as it applied to 
exports and the import portion of the Harbor Maintenance Tax is under 
attack as a possible violation to the General Agreement on Tariffs and 
Trade, we believe it is appropriate and timely to address a 
replacement.

    Question 5(B). When will the exporters begin to receive their 
refunds? How far back will the payments go? What year?
    Response. There are several issues that remain to be litigated in 
the Court of International Trade, including applicable interest and the 
time periods for which exporters may recover funds. The court has ruled 
that the statute of limitations runs for 2 years from the date of 
filing the claim, but a number of exporters are arguing that they are 
entitled to be repaid for all amounts since the law was 
unconstitutional and therefore void ab initio. These issues will likely 
be decided by the end of this year.

    Question 5(C). How much longer do we expect to receive fees from 
the importers?
    Response. Until the Harbor Maintenance Trust Fund is repealed, U.S. 
Customs is compelled by law to continue collections.

    Question 5(D). How big is the Harbor Maintenance Trust Fund 
surplus? Will it cover refunds to exporters and the fiscal year 1999 
O&M costs?
    Response. As of September 30, 1997, the Harbor Maintenance Trust 
Fund balance was approximately $1.1 billion. The Administration 
estimates that there will be sufficient funds remaining to pay 
operation and maintenance expenditures for Fiscal Year 1999 even if the 
plaintiffs' refund claims are paid out of the Harbor Maintenance Trust 
Fund.

    Question 5(E). How do we replace the Harbor Maintenance Trust Fund? 
Has the Administration considered paying the O&M out of the General 
Treasury, as we did before WRDA 1986?
    Response. Congress will need to enact legislation repealing the 
existing harbor maintenance tax and establishing constitutional user 
fees for the beneficiaries of Federal navigation projects. The 
Administration believes that users of the network of U.S. ports served 
by Federal channel and harbor projects should continue to be 
responsible for the costs of ensuring a safe, reliable and efficient 
port system and that all user contributions should be applied to 
providing needed services. Consistent with this belief, the 
Administration supports legislation establishing constitutional user 
fees, rather than paying for operation and maintenance costs from the 
General Fund of the Treasury. The Administration is currently seeking 
views of other Federal agencies and of non-Federal public and private 
stakeholders. We are hopeful that the Administration's proposed 
legislation for a replacement fund and user fee will be introduced 
within the next few weeks.
                                 ______
                                 
   Responses of Dr. Joseph W. Westphal to Additional Questions from 
                           Senator Max Baucus
    Question 1(A). Dr. Westphal, the Administration has proposed an 
environmental restoration and protection plan for the Lower Missouri 
River. Is there any reason why this program would not be beneficial for 
the entire Missouri River?
    Response. The Administration chose to focus on the Lower Missouri 
River area because this part of the river is open and conducive to 
implementation of environmental restoration and protection measures. 
Furthermore, the Corps and several interested organizations have 
already begun thinking about types of projects and particular locations 
in need of critical attention. The Lower Missouri River is very 
different from the upstream portion of the river, which is 
characterized by the Pick-Sloan Project. The Pick-Sloan Project, 
originally authorized in 1944, is comprised of a series of six 
reservoirs and intervening navigation channels. Once the reservoirs 
were filled, very few suitable locations (soils, hydrology, shelter) 
were left for environmental restoration and protection work. Many of 
the best areas already have been improved through environmental 
stewardship work done by the Corps and the States. For these reasons, 
we believe that the proposed legislation can be most effective if it is 
focused on the Lower Missouri River.

    Question 1(B). Would the Administration support including the 
entire river in this proposal?
    Response. If the Congress decided to include the entire Missouri 
River in the environmental restoration and protection program, the 
Administration would continue to support the proposal.

    Question 2. Dr. Westphal, the Administration's proposal includes a 
provision for recreation fees to be directed for use at the facilities 
where they are collected if more fees are collected in the future than 
are being collected now. Could you explain for the committee how this 
proposal would work? I understand that the baseline figure included in 
your proposal is the amount of fees collected today. How do you intend 
to get above that baseline so that this program will work?
    Response. The Corps currently collects approximately $34 million 
annually in recreation use fees. The Administration has proposed that 
80 percent of any amount collected over the $34 million would be 
returned to the Corps project where it was collected to be used for 
betterments of the Corps recreation program. The remaining 20 percent 
would be available for expenditure at other Corps projects nationwide. 
While it will be very difficult for the Corps to significantly increase 
the recreation use fee revenues, there are at least two Corps 
initiatives which I believe will have a positive impact on total 
recreation use fees collected.
    The Corps and the U.S. Forest Service have embarked on the National 
Recreation Reservation Service (NRRS) which will significantly increase 
access to camping and other reservable recreation opportunities at 
Corps projects. I expect this improved access will increase visitation 
and generate increases in revenue. The Corps also has a Recreation 
Partnerships Initiative (RPI), which is intended to attract private 
developers to provide additional recreation facilities at Corps 
projects. While the RPI will not directly increase the Corps user fees, 
it will attract more people to Corps projects and we expect there will 
be some spillover which will result in additional user fees collected 
at nearby Corps facilities.

    Question 3. Dr. Westphal, could you elaborate on any other plans 
the Administration has for enhancing the Corps recreation mission and 
the continued commitment to recreation at existing facilities?
    Response. As I mentioned earlier, the Corps and the U.S. Forest 
Service have embarked on the National Recreation Reservation Service, 
which will significantly increase access to camping and other 
recreation opportunities at Corps projects. Also, as part of the Corps 
Recreational Fisheries Resources Conservation Action Plan, we are 
placing an emphasis on providing access to our project tailwater and 
navigational structures. In Fiscal year 1997, the Corps implemented 65 
actions to make Corps tailwater and navigational structures more 
accessible to the public for recreational fishing. Those actions 
resulted in creating and improving recreational fishing access to 
approximately 174,900 surface water acres. Typical examples of such 
actions include the construction of fishing platforms and stairways, 
the creation of roads and small parking lots to provide sportsman 
access to remote tailwater areas, development of foot trails, 
vegetative control and the construction of fishing piers for physically 
challenged visitors.
    Other innovative actions include: a cooperative effort between the 
Corps, U.S. Fish and Wildlife Service and the Massachusetts Department 
of Fish and Wildlife to establish catch and release fishing areas along 
the Westfield River and Knightsville Dam; the development of a 
universal access pier at Blue Marsh lake in Pennsylvania; and, a lease 
with the State of New Jersey at the Penns Grove Disposal area on the 
Delaware River to create recreational fishing opportunities.
    As part of the Corps compliance with Section 208a of WRDA 96, the 
Corps will shortly conduct stakeholder meetings in an effort to obtain 
ideas from our customers about the Corps recreation and natural 
resources management programs. The Corps will then use some of these 
ideas to refocus its efforts toward the needs of the stakeholders. I 
expect that such input will help strengthen the Corps recreation 
program and its continued commitment to recreation and natural 
resources management. In addition, the Corps plans to continue to use 
its Challenge cost-sharing authority to leverage its resources to 
improve facilities and recreational opportunities at its lakes by 
partnering with others to improve recreation areas and facilities. 
During 1997, the Corps received assistance from 76,790 volunteers who 
contributed a total of 1,080,452 volunteer hours which were valued at 
$10,443,517. In addition, as a commissioner, appointed by the 
President, on the National Recreational Lakes Commission, I will be 
looking for opportunities to enhance our recreational mission and work 
with States and other Federal partners in improving our services.
                                 ______
                                 
   Responses of Dr. Joseph W. Westphal to Additional Questions from 
                           Senator Harry Reid
    Question 1. Wouldn't the Challenge 21 initiative, as proposed, 
preempt the ability of congressional authorization of projects by 
utilizing a continuing authority to keep the decisionmaking process 
within the Corps?
    Response. While the Challenge 21 program does provide for project 
implementation without specific congressional authorization, it does 
not remove the Congress from the process of implementing projects. The 
program requires that the Secretary of the Army notify appropriate 
congressional committees of a pending decision on a project. 
Congressional views will be taken very seriously in any decision to 
implement a project.

    Question 2. Additionally, the Challenge 21 initiative would cost 
$325 million over 6 years. As the Ranking member of the Energy and 
Water Development Appropriations Subcommittee, I find that kind of 
proposal to be disconcerting in light of the recent appropriations bill 
in which the proposed budget had cut the U.S. Army Corps budget by 
about $1 billion. Would Assistant Secretary Westphal commit to work 
with this subcommittee and the Energy and Water Development 
Appropriations Subcommittee in examining projected costs and benefits 
of such proposals?
    Response. It is important to remember that Challenge 21 is a multi-
function program with objectives to expand the use of non-structural 
alternatives to prevent future flood damages, reduce flood hazards and 
flood disaster recovery costs and to restore the natural functions and 
values to our riverine ecosystems. Considering the fact that we are now 
spending an average of $4.3 billion a year for flood disaster recovery, 
the proposed funding represents a modest Federal investment to solve 
problems that will only worsen and eventually cost more tax dollars. I 
will certainly work with the committees, both authorizing and 
appropriating, in the development and implementation of beneficial 
projects.

    Question 3. I also question the Challenge 21 initiative's purposes:

    Question 3(A). Does the focus on watershed based planning instead 
of project planning effectively undermine the community's support for 
the Corps' efforts because of the lack of specificity in the planning 
process?
    Response. Rather than being watershed based, the program is perhaps 
better characterized as involving a watershed approach to the 
identification of problems and solutions. In the Challenge 21 program, 
the watershed approach will provide a better understanding of how and 
why flooding occurs and how effectively the natural system is 
functioning. In addition, it will serve to identify a broader variety 
of potential solutions, resulting in more flexibility, effectiveness 
and efficiency in addressing floodplain issues and problems at the 
community level. This approach will result in specific proposals to 
solve flood damage and ecosystem restoration problems.

    Question 3(B). And isn't this new watershed planning and non-
construction approach contrary to the historical approach of the Corps, 
which is to plan and construct projects?
    Response. The Corps has long recognized that the watershed is the 
most effective framework for addressing water resources problems. This 
watershed orientation has been effective in addressing problems and 
needs related to navigation and flood damage reduction. This approach 
is also critical for effectively restoring ecosystems and evaluating 
the impact of regulated activities. With respect to non-structural 
measures, the Corps has, over the years, successfully implemented a 
number of projects which included nonstructural flood damage reduction 
measures. Challenge 21 will provide the Corps with a much needed tool 
to develop projects for situations in which ecosystem restoration is an 
integral part of solving flooding problems.
                                 ______
                                 
   Responses of Dr. Joseph W. Westphal to Additional Questions from 
                Senator Reid on behalf of Senator Levin
    Question 1. Section 1109 of the Water Resources Development Act of 
1986 prohibits new diversions of water from the Great Lakes or any 
tributary of the Great Lakes basin unless the diversion has been 
approved by the Governor of each of the Great Lakes States. That 
section was enacted to ``protection the limited quantity of water 
available from the Great Lakes system for use by the Great Lakes 
States.'' In a June 16, 1997 letter from the Assistant Secretary of the 
Army for Civil Works to Senator Levin, the Corps took the position 
that, ``the matter of groundwater diversions out of the basin is a 
State issue, not a Federal issue, under either Section 1109 or the 
Clean Water Act.'' To clarify, does the diversion of groundwater which 
would otherwise discharge into Great Lakes surface waters out of the 
basin reduce the amount of water available in the basin?
    Response. Generally, yes. The diversion of groundwater, which would 
otherwise discharge into Great Lakes surface waters, to a point out of 
the Basin would reduce the amount of water available in the Basin.

    Question 2. Does not much of the water that feeds the Great Lakes 
and their tributaries travel through the ground on some part of its 
journey to the surface waters of the lake?
    Response. Generally speaking, groundwater is a relatively small 
contributor of water to the Great Lakes. More that half of the water 
entering the Great Lakes comes from precipitation falling directly on 
the lakes. The remainder is from precipitation runoff from the land 
area in the basin and from groundwater. The proportion of each of these 
components varies with the local conditions and the intensity of the 
precipitation. Heavy rains on wet ground produce more direct runoff. 
Light rains and dry condition cause much of the precipitation to be 
absorbed and become groundwater. Factors that can affect these include 
the soil types and geology of the area, the slope of the terrain, the 
gradient of the streams and watercourses that feed into the Lake, and 
the direction of flow in the aquifers.
    However, it should be noted that groundwater may actually remove 
water from the surface water body, preventing that water from flowing 
to the Great Lakes. For example, water may seep out of a river, stream 
or small lake to recharge the groundwater which is subsequently lost to 
evaporation and in so doing never reaching the Great Lakes. The 
diversion of that particular groundwater may have no effect whatsoever 
on the amount of water in the Great Lakes.

    Question 3. Could one greatly affect the flow in Great Lakes 
tributaries by diverting groundwater before it reaches springs or 
otherwise feeds streams that flow into the Great Lakes?
    Response. As a practical matter, because the sources of water for 
tributaries are made up of so much more than groundwater inflow 
(particularly in the Great Lakes region) it is unlikely that any 
diversion of groundwater could ``greatly'' affect the flow in a 
tributary. Whatever effect that a groundwater diversion would have on a 
tributary would generally be localized in effect.

    Question 4. Could one, by pumping water out of the Basin, actually 
reverse the flow of water in tributaries to the Great Lakes?
    Response. The practical answer is, no. However, this effect could 
possibly be achieved on a very localized level under very special 
conditions. For example, for the effect to be achievable, the tributary 
flow must be very small, the elevation of the bottom of the tributary 
must be lower than the water surface elevation of the lake and the rate 
of pumped water must be much greater than the flow in the tributary 
that is running toward the lake.

    Question 5. If one chose to dig a well 100 feet from the shoreline 
of a Great Lake and began pumping groundwater out at rates exceeding 
five million gallons per day and transferring it to a watershed outside 
the Great Lakes Basin, how would the Corps apply Section 1109 if a 
wetland or other permit from the Corps were necessary?
    Response. First, it is important to note that, generally, the Corps 
has no jurisdiction over the pumping of groundwater (to a location 
either into or out of the Great Lakes Basin). It is our view that the 
regulation of groundwater is generally a matter entrusted to the 
States.
    However, if a pumping project were to require a Corps permit for 
some other reason (such as wetland fill or construction work in a 
navigable water), we would apply Section 1109 of the Water Resources 
Development Act of 1986. As a general proposition, it is the Corps 
position that the primary administration of Section 1109 is within the 
jurisdiction of the Great Lakes States Governors. We would notify the 
Great Lakes Governors of the project so that they could exercise any 
authority that they may have under Section 1109.
    Also, to the extent appropriate under our permit evaluation 
procedures, we would consider the effects of the groundwater diversion 
in determining whether issuing a permit would be in the public interest 
and, if the permit were to be issued, what special conditions would be 
appropriate to mitigate or alleviate the adverse effects of the 
groundwater diversion. It is important to note that while Sec. 1109 
does not bear directly on our permit decision, the effects of a 
proposed project on the groundwater regime and on the Great Lakes could 
well influence our decision to issue a permit. We would also take into 
consideration the views of the Great Lakes Governors as to the 
beneficial and adverse effects of the proposed project, including any 
diversions of groundwater. The applicant would be responsible for 
obtaining any other required license, permit or authorization, 
including consent of the Great Lakes Governors under Section 1109 if 
necessary.

    Question 6. Finally, does the Corps believe that there is a 
hydrologically definable and recognized unit commonly referred to as 
the Great lakes Basin? Could the Corps please provide the committee 
with its understanding of what constitutes the Great lakes Basin from a 
hydrological perspective?
    Response. Yes. The Great Lakes Basin is the closed area bounded by 
the watershed that is the demarcation of where the surface water 
generally flows toward or into one of the Great Lakes. The term Great 
Lakes Basin, as used in its common and engineering senses, refers to 
the drainage of surface water but not to groundwater and aquifers.
                                 ______
                                 
   Responses of Dr. Joseph W. Westphal to Additional Questions from 
                           Senator Bob Graham
    Question 1. Please identify the entire authorization that would be 
required to begin work on all 35 critical projects under the South 
Florida ecosystem restoration program. Also, please provide an estimate 
of the entire authorization that would be required to complete work on 
all 35 critical projects.
    Response. Based on preliminary cost information, the Corps 
Jacksonville District reports that the estimated costs to complete the 
identified 35 critical projects is $300,000,000 with the Federal cost 
share estimated to be $150,000,000 and the non-Federal cost share 
estimated to be $150,000,000. This would mean that the authorization in 
Section 528 of the Water Resources Development Act of 1996 would have 
to be increased from $75,000,000 to $150,000,000 to fund the Federal 
share of the 35 critical projects.

    Question 2. Please explain how the ``Challenge 21 `` program will 
be used in conjunction with the current civil works program. For 
example, projects are now specifically authorized and funded by 
Congress. If a flood control project is authorized by Congress, does 
the Administration determine in the feasibility study if the 
``Challenge 21 `` criteria should be applied or if a more standard 
structural solution is required? Does the Administration limit projects 
it would consider to projects that do not have specific congressional 
authorizations or does it look at projects that have already been 
authorized and then seek to apply ``Challenge 21'' criteria? 
Speciflcally explain how the ``Challenge 21'' program will mesh with 
the existing Corps program. Also, explain how the ``Challenge 21 
program will be managed by the Corps.
    Response. Challenge 21 will provide a much needed tool to develop 
projects for situations in which ecosystem restoration is an integral 
part of solving flood problems. Challenge 21 projects would not include 
projects already specifically authorized by Congress. The program will 
be a vital part of the Corps program by focusing on areas where 
nonstructural solutions (primarily floodplain evacuation) are likely to 
be an effective solution to flood problems and where the evacuated 
floodplains can be restored to natural riverine conditions. These areas 
have often been overlooked in traditional Corps studies.
    With respect to program management, the Challenge 21 program will 
be managed by my office in cooperation with Corps Headquarters. 
Individual studies, designs and construction activities will be managed 
by the responsible Corps District together with the non-Federal sponsor 
and cooperating Federal and State agencies. Given the nonstructural/
environmental emphasis of this program, additional procedures and 
guidance will have to be developed for project selections and 
evaluation. Prior to implementation, the proposed projects would be 
subject to the normal project review and approval process and 
notification of appropriate congressional committees.
                                 ______
                                 
   Responses of Dr. Joseph W. Westphal to Additional Questions from 
                             Senator Boxer
             american river watershed flood control project
    Question 1. The American River project in the Administration's bill 
calls for raising and strengthening the downstream levees on the 
American River. Based on the Corps' engineering experience, do you 
believe the Corps can safely construct the Stepped Release Plan to 
provide the intended level of flood protection?
    Response. Yes. The Corps has much experience in the design and 
construction of flood control projects. The project would contain a 
flood with a release rate of 180,000 cubic feet per second from Folsom 
Dam with a very high degree of confidence.

    Question 2. Can the Corps safely construct the Stepped Release Plan 
with the same degree of certainty afforded other projects nationwide?
    Response. Yes. There is no question that the Corps has much 
experience in the design and construction of flood control projects, 
and when completed the project would afford the same high degree of 
certainty to contain the design flood as provided in other parts of the 
country.

    Question 3. What is the approximate probability of the levee works 
of the Stepped Release Plan to withstand their designed flow capacity 
of 180,000 cubic feet per second?
    Response. The flow of 180,000 cubic feet per second would be the 
maximum objective release from the Folsom Dam under the ``Stepped 
Release Plan.'' The probability of the levees passing this flow is very 
high. The Corps has much experience in levee design and would design 
the levees to pass this amount of water in a safe and reliable fashion.

    Question 4. What is the probability of the Auburn Dam alternative 
passing the 400-year storm event for which it is designed? Is that the 
same as the probability of the Stepped Release Plan? Is that the same 
as the probability of Sacramento's current flood control system?
    Response. The reliability of a plan, or the plan's performance if a 
specific frequency flood occurs, can be evaluated by calculating the 
range of possible discharges for the stated frequency flood and 
accounts for engineering and operational uncertainties. If it could be 
implemented, the alternative capable of providing the highest level of 
flood protection to the flood prone areas along the American River is 
the Auburn Dry Detention Dam. This is the plan identified by the 
Sacramento District as the NED plan. Comparing the stated design 
frequency of the SIR Stepped Release Plan (160-year level of 
protection), SAFCA plan (150 to 155-year level of protection), and 
Auburn Dam (400-year level of protection), they have a 60 percent, 57 
percent, and 62 percent chance of containing that design event, 
respectively. The current flood control system has about a 60 percent 
chance of containing its 77-year design event.

    Question 5. I understand that the Corps and the Office of 
Management and Budget are preparing a proposal on a way to finance 
navigation and other improvements at our major ports dealing with 
international trade. Will this plan include assistance to medium-size 
ports and small craft harbors which contribute to regional economic 
development?
    Response. The proposal is currently being formulated to address the 
navigation needs of all these ports, including medium-sized and small 
harbors. The Administration understands that a healthy port system 
plays an important role in ensuring a strong national economy. 
Moreover, the Administration believes that users of the network of U.S. 
ports served by Federal channel and harbor projects should continue to 
be responsible for the costs of ensuring a safe, reliable and efficient 
port system and that all user contributions should be applied to 
providing needed services.
    In considering a legislative proposal to repeal and replace the 
Harbor Maintenance Tax, the Administration established several 
principles to ensure that the proposal is constitutional, equitable, 
and will be sufficient to finance harbor activities. The proposal for a 
new Harbor Services User Fee was structured so that the user fee:
     Satisfies the Supreme Court test for constitutionality.
     Establishes a close link between revenue collected and 
services provided to vessels.
     Is consistent with the General Agreement on Tariffs and 
Trade (GATT) and other U.S. international obligations.
     Is formulated on a nationwide basis.
     Causes no significant alteration of the existing 
competitive balance among U.S. ports.
     Supports U.S. Army Corps of Engineers operation and 
maintenance activities funded through the current Harbor Maintenance 
Tax, and harbor construction activities.
    It is important that such a user fee be formulated on a nationwide 
system basis so as to not significantly alter the existing competitive 
balance among U.S. ports, nor measurably impact U.S. international and 
domestic trade. The new user fee should not only support the operation 
and maintenance (O&M) activities of the Corps of Engineers and the 
other O&M costs currently recovered from the existing Harbor 
Maintenance Trust Fund, but it should also fund the Federal share of 
Corps port construction activities, such as port deepening projects. 
Expanding the uses of fee revenues to include Federal port construction 
projects recognizes that the services provided by the U.S. port system 
require adequate and continual investment in new construction.
    The Administration proposes to establish a user fee to be paid by 
the primary users of Federal channel and harbor projects, namely the 
commercial vessel owners/operators. The imposed fee will be based upon 
the provided services of Federal channels and harbor projects. Ship 
size, movement frequency, and the operational characteristics of 
particular vessel categories were the principal factors used to measure 
the provided services. Ship size is a key factor in measuring the 
extent of use and service from channels.
    The Army is currently reviewing this proposal with interested 
parties to gain their input. The Army will soon transmit a formal 
Administration proposal to Congress for its consideration. The 
congressional legislative process will, of course, offer additional 
opportunities for discussion and comment as the legislation moves 
forward. I look forward to working with you and other members of the 
subcommittee as we formulate this proposal.

    Question 6. The California Maritime Infrastructure Bank holds 
significant promise as providing the kind of financing boost that these 
smaller ports need. Other States have similar financing mechanisms by 
using revolving loan programs. Would you be willing to work with this 
subcommittee on ways that we can also help our ports and small-craft 
harbors that would be left out of the Administration's proposal?
    Response. I would be happy to work with the subcommittee on 
possible proposals for smaller ports and small craft harbors.
                                 ______
                                 
Prepared Statement of Kurt J. Nagle, President, American Association of 
                            Port Authorities
                              introduction
    Good morning. I am Kurt Nagle, President of the American 
Association of Port Authorities (AAPA). Founded in 1912, AAPA 
represents virtually every U.S. public port agency, as well as the 
major port agencies in Canada, Latin America and the Caribbean. Our 
Association members are public entities mandated by law to serve public 
purposes primarily the facilitation of waterborne commerce and the 
generation of local and regional economic growth. My testimony today 
reflects the views of the AAPA's United States delegation.
    Mr. Chairman, AAPA commends you for convening this hearing on the 
Water Resources Development Act of 1998. We are very grateful to this 
committee for its hard work that led to enactment of the Water 
Resources Development Act of 1996. Passage of WRDA 1996 was a great 
relief for public ports in gaining project authorizations and 
significant policy improvements after the Senate was unable to join the 
House in passing a WRDA bill in 1994. Again, we appreciate the strong 
leadership this subcommittee has shown in supporting sound water 
resources policy and investment.
    If I leave one message with you today, it is that ports, and all 
who benefit from the services we provide, depend on regular biennial 
passage of the Water Resources Development Act, as well as continued 
adequate annual appropriations levels. Navigation projects are our 
Nation's highways to the international marketplace. Since WRDA 1986, 
the Federal investment in improvements to our Nation's navigation 
infrastructure is matched by a local share that varies depending on the 
depth of the project.There is also a very substantial additional local 
investment in landside terminal facilities. These investments generate 
significant economic returns at the local, regional and national 
levels. All of the benefits that justify inclusion of navigation 
projects in the water resources bill are national economic development 
benefits.
    Our water highways are national assets that serve a broad range of 
economic and strategic interests. Ports' activities link every 
community in our Nation to the world marketplace enabling us to create 
export opportunities and to deliver imported goods more inexpensively 
to consumers across the Nation. The deep-draft commercial ports of the 
U.S. handle over 95 percent of the volume and 75 percent of the value 
of cargo moving in and out of the Nation. Port activities create 
substantial economic and trade benefits for the Nation, as well as for 
the local port community and regional economies. The following 
statistics highlight how critical ports are in facilitating national 
economic activity:\1\
---------------------------------------------------------------------------
    \1\ Source: U.S. Maritime Administration.
---------------------------------------------------------------------------
     U.S. Customs duty revenues totaling approximately $15.6 
billion were paid into the general treasury in fiscal year 1996 on 
cargo moved through ports.
     Our Nation's commercial deep draft ports annually handle 
in excess of $600 billion in international trade.
     Foreign trade is an increasingly important part of the 
U.S. economy, currently accounting for over 30 percent of our Gross 
Domestic Product. U.S. exports and imports are projected to increase in 
value from $454 billion in 1990 to $1.6 trillion in 2010. The volume of 
cargo is projected to increase from 875 million to 1.5 billion metric 
tons in 2010.
     The overall national economic impact of port activities in 
1994 generated:
           16 million jobs;
           $783.3 billion to the Gross Domestic Product; and
           $210.1 billion in taxes at all levels of government.
    As I have indicated, these national economic benefits are generated 
as the result of the local investment by ports in modern marine 
terminal facilities and related infrastructure in combination with 
Federal investments in the navigation channels. In 1996, the cumulative 
local investment in port facilities was $1.3 billion; a similar level 
of non-Federal investment is expected each year from 1997 to 2001.\2\
---------------------------------------------------------------------------
    \2\ United States Port Development Expenditure Report, U.S. 
Maritime Administration, October 1997.
---------------------------------------------------------------------------
    We should also not lose sight of the fact that the ports continue 
to play a very critical role in our Nation's defense. That role has 
never been more apparent than during the loadouts of military cargo and 
personnel during Operation Desert Shield/Desert Storm. The huge buildup 
of U.S. forces in and around the Persian Gulf would have been 
impossible without the modern facilities and strong support provided by 
America's ports. According to the U.S. Military Traffic Management 
Command (MTMC), between August 1990 and March 1991, MTMC loaded 312 
vessels and more than 4.2 million measurement tons of cargo in 18 U.S. 
ports for delivery to the Persian Gulf in support of Desert Shield/
Desert Storm. More than 50 ports have agreements with the Federal 
Government to provide ready access for national emergency purposes.
    In my testimony today, in addition to stressing the importance of 
passing a water resources bill this year, I want to stress four points:
     The need to continue to review and improve the partnership 
between the Corps of Engineers and the ports forged in WRDA 86;
     The port industry's alarm at the President's fiscal year 
1999 budget request as it relates to investment in our Nation's deep-
draft harbors;
     The need to ensure continued funding for maintenance 
dredging in light of the Supreme Court decision that the Harbor 
Maintenance Tax is unconstitutional as it is applied to exports; and,
     The need to continue to review and improve dredged 
material management policies and practices to avoid costly delays in 
dredging projects, ensure protection of the environment, and gain 
additional benefits to the Nation.
                          project partnership
    There has been a Federal/port partnership in the development of our 
Nation's port system virtually since our country's birth. U.S. public 
ports are varied, but generally act as semi-autonomous authorities. 
Local, state-wide or regional ports are responsible for investment, 
development and operation of marine terminal facilities. Ports are also 
responsible for dredging of berthing areas and access channels 
connecting the port facilities to Federal navigation channels. While it 
had historically funded 100 percent of navigation channel improvement 
and maintenance, since 1986 the Federal role of the partnership has 
been limited to cost-sharing capital improvements to Federal navigation 
channels.
    Ports have made substantial investments of local funds in landside 
port facilities which will be jeopardized if the Federal Government 
fails to live up to its part of the Federal/port partnership. Local 
public ports have spent more than $16.8 billion since World War II to 
develop landside facilities. Local ports make commitments to our 
private sector customers to provide state-of-the-art facilities and 
equipment to serve the demand of the marketplace. Public port and 
private investment in marine terminal facilities will be wasted if 
access to ports via navigation channels is constrained.
    The task of meeting the present and expected future demands on our 
navigation system has never been so complex, and never as much in the 
public spotlight as it is today. I have outlined below some of the key 
changes which, if implemented, will help us to meet those demands.
    Need to Authorize Navigation Projects. The enactment of the Water 
Resources Development Act and Federal investment in navigation is of 
critical importance to the Nation's economy. There are fewer navigation 
projects today, but they are equally important, if not more critical, 
in today's rapidly changing world for ports big and small. If projects 
are not authorized, the national benefits, as well as regional economic 
diversification and job creation opportunities, will be delayed.
    Important projects are finishing the planning process and will 
require authorization for construction, including but not limited to 
improvements at ports in Baltimore Harbor, MD; Brunswick and Savannah, 
GA; Jacksonville and Tampa, FL; Oakland, CA; and, the Columbia River, 
OR and WA. Other projects, including those in New York/New Jersey will 
require modifications. This list is not intended to be exclusive, but 
only illustrative of the importance of a water resources bill to a 
broad cross-section of ports across the country.
    Need to Accommodate Larger Vessels. A recent report prepared by the 
U.S. Maritime Administration documents the status and trends of general 
cargo ship design and its impact on transportation infrastructure.\3\ 
The report finds that the rate of growth in containerized cargo in the 
U.S. is at 6 percent per year, and predicts that by 2010 nearly 90 
percent of general cargo will be shipped in containers and that nearly 
33 percent of those containers will be transported on vessels carrying 
more than 4,000 twenty-foot equivalent container units (TEUs). Such 
vessels, commonly referred to as ``megaships'' are a key element in the 
strategies of the world's leading steamship carriers as they seek to 
optimize operations through global alliances. These large vessels 
obviously pose major challenges to ports because of their size and the 
potentially large number of containers they could discharge or load 
during any one port call. Key requirements obviously will include 
suitable terminal facilities, as well as deeper channels, berths, 
container yards, and rail and highway access.
---------------------------------------------------------------------------
    \3\ The Impacts of Changes in Ship Design on Transportation 
Infrastructure and Operations, U.S. Maritime Administration, February 
1998.
---------------------------------------------------------------------------
    Prior to 1986, a channel depth of 45 feet would accommodate almost 
all of the container ships in the world's fleets. The Clarkson 
Containership Register indicates that most of the container ships in 
1986 had maximum capacities of less than 3,000 TEUs of containerized 
cargo with average drafts of about 38 feet. There were only a few 
larger container vessels with capacities over 3,000 TEUs which were 
built to the maximum size that could be handled by the Panama Canal. 
Most of these panamax vessels had drafts of 41.6 feet or greater. 
Vessels with these drafts cannot use a 45 foot deep channel when fully 
loaded.
    In the years since 1986, the containership fleet has undergone a 
major evolution. The world's major ocean carriers have greatly 
increased the size of the ships and the number of large ships they use. 
In 1988, a new class of post-panamax ships was introduced into the 
world's container shipping fleet. Today there are about 60 of these 
large ships with an equal number more on order. The post-panamax ships 
have a capacity of 6,000 or more TEUs with even larger ships being 
designed and built. These vessels are generally wider than can be 
handled in the Panama Canal They also have deeper drafts. The average 
draft of the current post-panamax ships is 42.9 feet. The largest ships 
have drafts of about 45.5 feet, which require channels that are at 
least 50 feet deep. An analysis contained in the Maritime 
Administration report cited earlier suggests naval architecture 
constraints on ships as large as 15,000 TEUs would not result in drafts 
much greater than 46 feet. Thus, with allowances for under-keel 
clearance, vertical ship movement (squat), and uncertainty in 
predictions of future ship design, AAPA believes the norm for general 
cargo navigation channels will be as great as 53 feet.
    In WRDA 1986, Congress created a cost-sharing formula for 
navigation improvement projects based on the needs of the general cargo 
fleet at that time. Specifically, a cost-sharing transition was set at 
45 feet, above which (i.e., shallower) local sponsors would pay a 35 
percent (25 percent plus 10 percent over 30 years) cost-share and below 
which (i.e., deeper) would be cost shared at 60 percent (50 percent 
plus 10 percent over 30 years) local. According to the legislative 
history for WRDA 1986, the rationale for setting 45 feet as the 
transition to significantly greater local participation was that,

          The committee has surveyed the manner of financing navigation 
        projects in most developed countries. Based upon this survey 
        the committee found that most of the national Governments in 
        those countries financed general navigation improvements, 
        including main and entrance channels to a depth of 45 feet to 
        accommodate general cargo vessels (emphasis added). This 
        assistance is normally justified on the basis of national and 
        regional economic development. At the same time, most of these 
        countries require local contribution to the cost of 
        construction and maintenance of navigation projects in excess 
        of that depth to accommodate larger, specialized vessels 
        increasingly operating in liquid and dry bulk trades.
          The bill, as reported, applies this experience by reconciling 
        national investment policy toward future port development with 
        prevailing international practice. This is accomplished through 
        the establishment of 45 feet as the maximum standard depth for 
        ports not designed to accommodate deep draft vessels, and the 
        declaration of channel depths in excess of 45 feet as ``deep 
        draft ports.'' A graduated scale for the local contribution to 
        the cost of project construction depending upon depth 
        culminates in a 50:50 Federal/local cost-sharing formula for 
        deep-draft navigation projects.

    AAPA believes the Congress should revise the cost-sharing formula 
to adjust the upper cost-sharing threshold to reflect the changes that 
have occurred in the general cargo fleet.
    Cost Sharing for Maintenance Dredging. WRDA 1986 requires that 
local sponsors cost-share the increased cost of maintenance dredging 
for the increment over 45 feet. In practice, calculating the increased 
cost is highly uncertain. As described below, when passed in 1986 the 
Harbor Maintenance Trust Fund (HMTF) paid only 40 percent of 
maintenance dredging costs; since 1990 the HMTF has paid 100 percent of 
such costs.
    AAPA recommends that Congress remove the requirement to cost-share 
the cost of maintenance dredging in projects greater than 45 feet 
because: (1) the increased cost is difficult to calculate; (2) it 
generates very little money; and (3) the HMF currently covers 100 
percent of maintenance dredging costs.
    Port/Corps Partnership. Since the enactment of WRDA 1986, the ports 
share the cost of construction of navigation projects and have embarked 
on a ``partnership'' with the Corps in development of the Federal 
navigation system. Although some significant progress has been made on 
that partnership, there remain impediments to efficient execution of 
project planning, design and construction.
    While WRDA 1986 allows local sponsors to receive a credit for in-
kind services up to 50 percent of their share of feasibility study 
costs, there is no such provision for crediting in-kind services during 
preliminary engineering and design (PED) or during construction. 
However, under current practice, and especially with more feasibility 
studies being led by a local sponsor under Section 203 of WRDA 1986, 
ports have certain expertise that can help projects move forward more 
efficiently. This efficiency can only be realized if the port can 
receive credit for such services against the contribution to project 
construction. Thus, AAPA recommends that Congress amend the cost-
sharing provisions to allow local sponsors to credit in-kind PED and 
construction services against their share of construction costs.
    Cost Recovery. Another issue that deserves the attention of the 
committee is the limits under Section 208 of WRDA 1986 that are placed 
on the ability of local sponsors to recover their non-Federal share of 
the project costs. This provision so narrowly defines the potential 
eligible channel users that may be subject to cost recovery so as to 
effectively make it impossible for local sponsors to use the authority. 
Ports need a broad-based capacity to collect cost recovery for the non-
Federal share. AAPA recommends that Congress revise Section 208 to 
provide ports greater flexibility in recovering the cost of navigation 
improvement projects.
                    fiscal year 1999 appropriations
    Although today the committee is focusing on water resource project 
authorizations, it is equally important to ensure that adequate 
appropriations are provided for improvement and maintenance of the 
Nation's water transportation infrastructure. Ports and their customers 
in the carrier, shipper, labor and commercial communities must be able 
to rely on the continued involvement of the Federal Government in 
building and maintaining a safe and efficient navigation system. AAPA 
and its member ports around the country are deeply concerned that the 
President's proposed budget for fiscal year 1999 did not provide for 
sufficient investment in our commercial navigation system, and that 
funds are being diverted from navigation projects to pay for other 
Administration priorities, including new programs. We are pleased that 
the Senate and the House have increased the funding levels from the 
Administration proposal, but it is still not enough.
    The Administration budget requested fiscal year 1999 appropriations 
of $3.215 billion for the Corps of Engineers Civil Works Program. This 
level represents a 21 percent cut from fiscal year 1998 appropriated 
levels, and only 70 percent of what is needed to maintain project 
schedules and begin additional new projects. While we are also 
concerned about the level of proposed funding for operation and 
maintenance and for conducting studies, we are most concerned about the 
proposed Corps budget for the Construction, General account, which 
received the largest cuts. The Construction, General account, which 
provides the funding for investment in our Nation's water resources, 
was subject to a 47 percent cut compared to fiscal 1998 appropriated 
levels ($784 million v. $1.47 billion). This level represents only 43 
percent of the necessary funding requirement, which would be $1.82 
billion, to maintain project schedules and begin additional new 
construction. Only 2 of 50 congressionally added projects in the fiscal 
year 1998 appropriation were picked up in the Administration's fiscal 
year 1999 budget. The proposal seeks eight new starts, as opposed to 
the 24 new starts recommended by the Corps, totaling $16.1 million, 
none of which are navigation projects.
    In terms of deep-draft harbors, which provide the gateways for more 
than 95 percent of our Nation's growing import and export trade, this 
budget seeks only $40 million in fiscal year 1999. This amount is less 
than half of what the Administration sought for deep-draft harbor 
construction in fiscal year 1998 ($108 million); it's less than one-
third of what Congress appropriated in fiscal year 1998 ($132 million); 
and, it's only one-tenth of what is needed to fund ongoing and 
authorized new projects ($328 million).
    On June 4, the Senate Appropriations Committee marked up the Corps 
of Engineers fiscal year 1999 budget. The total funding level of $3.8 
billion is disappointing, considering the Senate Budget resolution 
specifically indicated that Corps programs should be level-funded at 
last year's levels ($4.1 billion). The Senate levels are 17 percent 
greater than the President's fiscal year 1999 request, 17 percent less 
than the fiscal year 1999 requirement, and 7 percent less than fiscal 
year 1998 appropriated levels.
    Under the Senate bill, deep-draft harbor projects would receive 
$180.3 million compared to the $39 million requested by the President 
and the $132 million appropriated in fiscal year 1998. Unfortunately, 
this level is still approximately half of what is needed in fiscal year 
1999 to keep projects on schedule and to start necessary new projects.
    Without additional funding, next year a number of ongoing projects 
will not be able to maintain contractual obligations. This will force 
work to come to a halt and increase project costs by having contractors 
demobilize their equipment. In recent testimony at a Senate 
Appropriations Subcommittee hearing, the Corps of Engineers estimated 
that the Administration's proposed cuts in the Construction, General 
account will result in an additional $400 million in increased costs 
over the life of the projects and $3.6 billion in lost economic 
benefits. Several navigation projects that have substantial 
environmental features, including the creation of thousands of acres of 
wildlife habitat using dredged material, would not proceed under the 
proposed funding levels.
    Since the enactment of WRDA 1986, our experience indicates that we 
have made significant progress in advancing real partnerships between 
the Corps and local sponsors on navigation projects. Existing 
mechanisms in WRDA 1986 provided by Sections 203, 204, and 205 were 
intended to expedite Federal navigation projects by permitting the 
sponsor to formulate and construct the project and subsequently seek 
reimbursement from Congress. While these provisions were not widely 
used, recent progress in the dialog between the Corps and the port 
community has clarified a number of concerns related to the roles and 
responsibilities of the Corps and the local sponsor and, so, the number 
of projects using these authorities is growing. Use of these 
authorities has saved both money and time. Unfortunately, the Office of 
Management and Budget has announced several policy changes that raise 
great concern as to whether there is a commitment to seeking 
reimbursement for work undertaken by the local sponsor. These policy 
changes include prohibitions against multi-year contracting for all 
fiscal year 1998 new starts and against Section 11 funding agreements. 
There is also uncertainty about whether OMB will permit local sponsors 
to provide more of their cost share earlier in the project to make up 
for any Federal funding shortfall. These policies will have a chilling 
effect on the further use of innovative partnership tools like Sections 
11, 203, 204 and 205 which were created by Congress to facilitate the 
program.
    We understand the Congress is faced with difficult budget 
decisions, but this country cannot afford to make the mistake of 
shortchanging our Nation's economic competitiveness and opportunity by 
failing to provide for continued improvement and maintenance of our 
Federal navigation system. Ports and navigation channels are critical 
links in the intermodal transportation chain. Failure to continue to 
invest in all aspects of this transportation system will have serious 
long-term economic consequences. Clearly, the proposed Administration 
budget for Federal involvement in the Nation's water transportation 
system is seriously flawed and must be corrected by this Congress. We 
ask this committee's support in making that happen.
                     harbor maintenance trust fund
    Of all the issues facing most public port authorities, few are more 
critical than funding for Federal navigation channels, whether for 
maintenance of existing channel depths or funding new construction 
dredging projects. That is why the follow-up to the Supreme Court 
decision on the Harbor Maintenance Tax (HMT) and the passage of the 
Water Resources Development Act (WRDA) of 1998 are so important to U.S. 
ports.
    Although the Federal Government traditionally funded both 
maintenance dredging and improvements to Federal navigation channels 
from General Treasury revenues, in 1986 Congress created the Harbor 
Maintenance Trust Fund to pay for a portion of channel maintenance 
dredging. Congress instituted the HMT and cost-sharing reforms after a 
lengthy impasse over water resources development policy. The HMT was 
enacted in an effort to recover the cost of maintenance dredging from 
navigation channel users.
    The Supreme Court decision has set the stage for a new solution. 
AAPA members believe that, as was the case before 1986, maintenance 
dredging should be funded from general revenues There is no user-fee 
system that can equitably raise revenues from the users of navigation 
channels in reasonable relation to the distribution of benefits to the 
Nation.
    Many options were considered in developing the ad valorem HMT 
funding mechanism for maintenance dredging. Unfortunately, the only 
option to survive the debates from 1981 to 1986, the HMT, was found 
unconstitutional by the Supreme Court. It does not appear that there 
are significant new or old options that would work better today.
    The assessment of a tonnage fee on cargo or vessels would severely 
affect bulk commodities, such as grain or coal, which compete in 
international markets where pennies a ton can make or break a sale. 
These shipments, which are amongst our Nation's leading export 
products, now use the most cost-effective route typically moving by 
barges down rivers to coastal harbors. Those harbors, in turn, tend to 
require significant maintenance dredging because of the river sediment. 
In general, dredging demands related to the shipping of these types of 
export products are greater than those related to import products.
    Another alternative considered would have required local ports to 
raise their own funding for maintenance dredging. Such a change could 
pit U.S. ports against each other, the result of which could impact 
commerce and national security. Like a tonnage tax, local funding, if 
passed on to port users, could increase transportation costs, pricing 
bulk commodities out of international markets either through increased 
charges at the currently utilized port(s) or by increasing inland 
transportation costs due to diversion from the inland waterway system.
    The concept also alters the fundamental Federal role in maintaining 
the national navigation system. As noted earlier, relying in good faith 
on this long-standing partnership, local ports have invested, and 
continue to invest, significant amounts to construct and maintain 
landside facilities. These local investments have created the system of 
ports the Nation depends on to meet the needs of its national defense 
and growing international trade.
    Recognizing that these options could be injurious to the Nation's 
trading position, and to individual ports, Congress in 1986 chose to 
enact a uniform ad valorem tax on cargo in an attempt not to affect the 
competitive position of any port. Congress intended to minimize the 
potential negative effect on export competitiveness, and minimize the 
diversion problem by setting the fee fairly low, at a level to collect 
40 percent of the dredging costs. However, in the 1990 budget 
agreement, Congress tripled the fee, and a $1.2 billion surplus has 
accumulated in the trust fund. Prior to the Supreme Court decision, the 
surplus had been expected to reach nearly $2 billion by the end of 
fiscal 1999.
    The HMT ultimately added hundreds of dollars to the cost of 
shipping a single container of high value cargo, and has caused traffic 
to be diverted to non-U.S. ports to avoid payment.
    Other options for raising revenue from direct users of the 
navigation channels are not likely to produce sufficient funds. In 
addition, direct navigation users are already significantly taxed. A 
1993 General Accounting Office study found that 12 Federal agencies 
levy 117 assessments on waterborne trade. In 1996, receipts from these 
fees were 154 percent of the level raised only 10 years earlier, making 
our exports more expensive and less competitive in international 
markets.
    Customs revenues in fiscal year 1996 totaled $22.3 billion, of 
which roughly 70 percent (or $15.6 billion) is attributable to cargo 
moving through seaports. These funds, currently collected from users of 
navigation channels, are more than 31 times greater than the cost of 
maintenance dredging (approximately $500 million). Expected increases 
in customs collections due to increased trade would likely be enough to 
pay for maintenance dredging.
    The benefits of safe and efficient trade provided by our Nation's 
system of navigation channels are spread throughout the country. In 
addition, the benefits to the Nation resulting from national defense, 
commercial fishing, and recreational users are immeasurable; assessing 
fees on these users, however, was not part of the 1986 HMT funding 
mechanism. Both economically and strategically, there are no greater 
assets than our ports and Federal navigation channels our water 
connections to the global marketplace and means of national defense. 
The costs for dredging should be spread across the whole Nation because 
all our citizens benefit.
    AAPA members look forward to working with the Administration and 
Congress to come up with equitable solutions to the funding challenges 
which we face.
                      dredged material management
    In 1993, the maritime, port, labor, and business communities called 
for the adoption of a National Dredging Policy to facilitate the timely 
and cost-effective dredging of our Nation's navigation channels. 
Dredging the Nation's navigation channels to keep them open for trade 
is too often frustrated by inconsistent, complex and duplicative laws 
and regulations. In the time that we have been working with the 
Congress and the Administration to establish a National Dredging 
Policy, great strides have been made to clarify, streamline and 
simplify the navigation dredging process.
    Probably the most significant accomplishment in advancing the goals 
of a National Dredging Policy occurred with the passage of provisions 
in the WRDA 1996 to provide for Federal participation in the 
establishment and operation of confined disposal facilities. AAPA and 
the port community recognize the hard work provided by the subcommittee 
in moving a WRDA bill last Congress, and especially the provision on 
cost sharing for confined disposal. AAPA supported this provision 
because previous policy tended to provide an economic incentive for 
open water disposal over confined or upland disposal options. While 
AAPA believes that open water disposal must continue to be a viable 
option, this change allows the Corps to consider all alternatives on an 
equal basis. However, AAPA is concerned that much work still needs to 
be done to improve the dredging process. Impediments still exist with 
the regulatory review process, contaminated sediment, and beneficial 
uses of dredged material.
    Regulatory Review Process. In December 1994, the Administration 
released the Interagency Report on Improving the Dredging Process. The 
agencies involved in preparing that report continue to work through the 
National Dredging Team to improve coordination and cooperation in the 
planning and regulation of dredging projects. AAPA fully supports this 
effort and is working closely with the National Dredging Team to ensure 
that port industry concerns are provided to the agencies for their 
consideration.
    AAPA is very concerned about regulations recently issued by the 
National Marine Fisheries Service (NMFS), under 1996 amendments to the 
Magnuson-Stevens Fisheries Act, regarding the protection of essential 
fish habitat (EFH). Federal activities, including issuing permits, that 
may impact essential fish habitat must be reviewed by NMFS. Under the 
regulations, it is very likely that broad expanses of the aquatic 
environment will be designated EFH. (The draft EFH for salmon would 
designate the entire North Pacific coast of the U.S. from the shore out 
46 miles.) Any proposed activity that may impact EFH would be required 
to prepare an EFH assessment. We are very concerned that this new 
requirement to prepare EFH assessments will increase project costs and 
cause additional delays. We have urged the NMFS to work with the Corps 
and the port industry to develop streamlined review procedures for 
activities already regulated under the Clean Water Act or the Marine 
Protection, Research and Sanctuaries Act such as dredging projects with 
disposal at designated disposal sites.
    One remaining legislative goal of the proposed National Dredging 
Policy is to amend the Clean Water Act (CWA) and the Marine Protection, 
Research and Sanctuaries Act to provide for consistent and expedited 
review of all dredging and disposal alternatives, separate from the 404 
wetlands provisions of the CWA, and for consideration of relative 
costs, risks and benefits of each alternative. Additional changes 
should be considered to emphasize prevention of pollution that 
contaminates sediments, and to require full consideration of the use 
and value of the waters and channels to navigation in establishing 
appropriate criteria and standards. AAPA appreciates the efforts by the 
subcommittee to address some of these issues in the last Congress, and 
looks forward to working with this committee as it considers changes to 
the CWA and other environmental laws.
    Contaminated Sediments and Beneficial Uses. Contaminated sediments 
are a problem that requires strong partnerships if we are to 
effectively meet the needs of maintaining an efficient navigation 
system and a healthy environment. Recently, the pendulum has moved 
toward greater regulation of dredging projects. In 1991, the U.S. 
Environmental Protection Agency (EPA) tightened its standards for the 
ocean disposal of dredged material; the result was a significantly 
greater amount of material being found unsuitable for disposal in the 
ocean. Last summer, EPA closed the ocean disposal site outside of New 
York Harbor for the disposal of most dredged material from the harbor. 
In addition, States are more aggressively using their CWA water quality 
certification and Coastal Zone Management consistency authorities to 
make extensive demands for only marginal or speculative environmental 
benefits. We agree it is important to ensure the protection of the 
State prerogative, but we must ensure that the limited Federal and 
local resources available for dredging projects achieve the greatest 
benefits and minimize real environmental risk.
    As part of the plan to close the NY Harbor ocean disposal site, the 
Administration announced its intention to establish a process to review 
the ocean dumping testing requirements in a manner that includes all 
stakeholders. AAPA and its member ports have cooperated with the 
contractor hired by the EPA to scope out this process. While AAPA 
believes it is necessary to periodically review the adequacy of dredged 
material regulation, we do not believe that this review should be an 
opportunity to further restrict ocean disposal. AAPA is committed to 
the development of a dredged material regulatory framework that equally 
considers all disposal alternatives using decision tools that consider 
risks, benefits and costs of each alternative. The public port industry 
will participate in whatever process the EPA arrives at, with all 
stakeholders, to ensure that the testing program is fair, efficient, 
and scientifically sound.
    However, we believe the focus of the Federal and State governments 
should be first and foremost on pollution prevention, the control of 
polluted runoff into our Nation's waterways, and the cleanup of 
historically contaminated sediments. Contaminants in polluted runoff 
and historically contaminated areas are often transported into our 
ports and harbors. AAPA supports the efforts of this subcommittee in 
trying to focus attention in the Clean Water Act on the control of 
nonpoint polluted runoff and hotspots. We simply must control these 
sources of pollution in order to ever have hope to be able to clean up 
sediments in navigation channels.
    We recognize that the subcommittee has sought to address the 
problem of historically contaminated sediment by providing the Corps 
with authority to dredge outside a navigation channel to remove and 
remediate contaminated sediment that contributes to contamination of 
the navigation project. However, this provision has not been used in 
cleaning up historically contaminated areas. AAPA is working with its 
member ports and the Corps and other Federal agencies to explore the 
whole range of authorities and regulations that bear on cleaning up 
historically contaminated sediment. It appears a combination of 
administrative and legislative changes may be needed to achieve the 
goal of cleaning up contaminated sediment sites in an economical and 
equitable way. Under the right circumstances, ports have been partners 
in the cleanup of contaminated sediment and brownfield sites while 
spurring economic development. Such formulas for win-win situations 
need to be found and replicated in the future. AAPA supports the work 
of this subcommittee to move Superfund reform legislation that provides 
greater flexibility in revitalizing brownfield sites.
    A recent National Research Council report entitled ``Contaminated 
Sediments in Ports and Waterways, Cleanup Strategies and Technologies'' 
may provide a road map for such administrative and legislative changes. 
For example, the report recommends the increased use of risk-based 
decisionmaking and full consideration of all sediment contamination 
remediation options including containment. In addition, the report 
suggests that cleanup dredging projects may not be occurring because of 
concerns that future liability for contaminants in sediment may 
transfer to the port or the Corps if contaminated sediment from a 
cleanup project is placed in a confined disposal facility constructed 
for navigational dredged material. AAPA encourages the subcommittee to 
consider holding a hearing on the findings of the NRC report to 
determine if there are any regulatory or institutional barriers to the 
efficient identification and management of contaminated sediments.
    The WRDA 1996 contained a provision, Section 217, that allows for 
private interests to construct disposal facilities for dredged material 
and to charge the Corps a tipping fee for placement of disposal in such 
facilities. AAPA believes that this provision could provide the private 
sector an incentive to develop innovative disposal strategies, such as 
the creation of wetlands using dredged material for mitigation banks. 
Another innovative strategy, which may be realized soon because of 
research conducted by the Corps, is the processing of dredged material 
into useful products such as manufactured soil, road-bed aggregate, or 
even bricks. If a market were developed for these products, the private 
sector could build processing facilities and take dredged material from 
the Corps under Section 217. AAPA is reviewing this approach with the 
Corps of Engineers to see if there are any regulatory or institutional 
barriers inhibiting the private sector from acting in this area. AAPA 
would like to work with the Administration and the Congress to refine 
any policies that may be inhibiting economically viable beneficial uses 
of dredged material. We must continue development of more efficient and 
effective approaches to provide for our mutual goals of economic 
development and environmental protection.
                               conclusion
    Thank you for the opportunity to testify today. To ensure our 
Nation's continued international competitiveness, it is now more 
important than ever to continue to invest in an improved and efficient 
water transportation system. We are extremely grateful to the 
subcommittee for the important work it did on WRDA 1986 and the 
subsequent biennial authorization bills. Again, I cannot emphasize 
strongly enough AAPA's support for action this year on a water 
resources bill and a continued regular authorization cycle. We look 
forward to working closely with the committee as you draft and enact 
the Water Resources Development Act of 1998.
                                 ______
                                 
        Responses by Kurt Nagle to Questions from Senator Chafee
    Question 1. Tell me why you believe (as you said in your testimony) 
that, ``. . . there is no user fee system that can equitably raise 
revenues from the users of navigation channels in reasonable relation 
to the distribution of benefits . . .''
    Response. Both the direct users of navigation channels and the 
beneficiaries of navigation channels are so diverse, truly national in 
scope, that it is unlikely that an equitable user fee system can be 
devised. For example, in addition to commercial shipping, navigation 
channel users include vessels involved in national defense, commercial 
fishing, research, and recreation; these users, however, have not been 
part of the 1986 HMT funding mechanism. Furthermore, the economic and 
environmental benefits of safe and efficient trade provided by the 
Nation's system of navigation channels are spread throughout the 
country. The foreign trade activities of each State are supported by a 
variety of ports both within and, more often, outside the State. On 
average, each State relies on between 13 to 15 ports to handle 95 
percent of its imports and exports. The goods from 27 States leave the 
country through the ports in Louisiana alone. Midwestern grain supplies 
the Pacific rim market through ports in the Pacific Northwest. Imported 
crude oil refined in New Jersey and Pennsylvania reaches consumers on 
the entire East Coast--from Maine to Florida. Steel that travels to 
major Midwestern industrial centers is delivered cheaply and 
efficiently through Great Lakes ports. Ports on the West Coast handle 
goods such as cars, computers, and clothing, which are destined for 
consumers throughout the country.
    AAPA considered four criteria is assessing possible Harbor 
Maintenance Tax alternatives: (1) there should be equity among ports so 
that each port gets a reasonable return for fees paid on cargo moving 
through it; (2) the fee should not add to the price of the Nation's 
bulk export products (e.g., grain, coal), making these commodities 
uncompetitive in international markets; (3) the fee should not alter 
the competitive position among U.S. ports or induce the diversion of 
cargo from U.S. ports to Canadian or Mexican ports; and (4) the fee 
should meet the constitutional test set out by the Supreme Court that 
it should be reasonably related to the service provided. As is 
explained below and in the attached white paper, AAPA considered a 
number of alternatives to the existing HMT but determined that none met 
the criteria.
    Because of the enormous national economic and national security 
benefits, and because the diverse navigation user community makes 
assigning a fee based on use extremely difficult, the Federal 
Government should reaffirm its long-standing responsibility for 
maintaining navigation channels through funding from general treasury.

    Question 2. Is there no way for us to install a program whereby the 
users fund (at least partially) O&M activities along the waterways?
    Response. As described above, designing a user fee system that is 
equitable and does not harm the competitiveness of the Nation's exports 
will be extremely difficult, if not impossible. Certainly, however, a 
user fee system that is designed to raise less than the full cost of 
maintenance dredging would have less adverse effects than a system that 
raises just enough or more than is needed. This was exactly the 
reasoning Congress used in enacting the original Harbor Maintenance Tax 
in 1986. At that time, the tax was set at 0.04 percent of the value of 
cargo and it was intended to cover 40 percent of the cost of 
maintenance dredging. In 1990, the tax was more than tripled to cover 
100 percent of maintenance dredging costs. Since that time, the Harbor 
Maintenance Trust Fund has accumulated a surplus of over $1 billion.

    Question 3. Is the Administration just wasting its time by trying 
to come up with an equitable program that meets the Supreme Court 
criteria?
    Response. For over 2 years, AAPA members reviewed alternatives in 
case the existing tax was ultimately ruled unconstitutional by the 
Supreme Court. The task group developed the criteria discussed above 
and analyzed a variety of alternatives, but found none that met the 
criteria noted earlier; only returning to pre-1986 General Treasury 
funding appeared to be a viable solution. We recognize that the 
Administration may believe it must work through a similar process of 
analyzing alternatives, and we are prepared to assess any alternatives 
they may propose against the criteria described above.

    Question 4. What alternatives has your organization debated? None 
of them viable?
    Response. AAPA's task group reviewed several options before it 
concluded that returning to general treasury funding for maintenance 
dredging was the only equitable solution. Many of these options were 
considered during debates from 1981 to 1986. Unfortunately, the only 
option to survive the ad valorem HMT was found unconstitutional by the 
Supreme Court. It does not appear that there are significant new or old 
options that would work better today.
    The assessment of a uniform tonnage fee on cargo or vessels would 
severely affect bulk commodities, such as grain or coal, which compete 
in international markets where pennies a ton can make or break a sale. 
These shipments, which are amongst our Nation's leading export 
products, now use the most cost-effective route--typically moving by 
barges down rivers to coastal harbors. Those harbors, in turn, tend to 
require significant maintenance dredging because of the river sediment. 
In general, dredging demands related to the shipping of these types of 
export products are greater than those related to import products.
    Another alternative considered would have required local ports to 
raise their own funding for maintenance dredging. Such a change could 
pit U.S. ports against each other, the result of which could impact 
commerce and national security. The concept also alters the fundamental 
Federal role in maintaining the national navigation system. Like a 
tonnage tax, local funding, if passed on to port users, could increase 
transportation costs, pricing bulk commodities out of international 
markets either through increased charges at the currently utilized 
port(s) or by increasing inland transportation costs due to diversion 
from the inland waterway system.
    Other options for raising revenue from direct users of the 
navigation channels are not likely to produce sufficient funds. In 
addition, direct navigation users are already significantly taxed. A 
1993 General Accounting Office study found that 12 Federal agencies 
levy 117 assessments on waterborne trade. In 1996, receipts from these 
fees were 152 percent of the level raised only 10 years earlier, making 
our exports more expensive and less competitive in international 
markets.
    Customs revenues in fiscal year 1996 totaled $22.3 billion, of 
which roughly 70 percent (or $15.6 billion) is attributable to cargo 
moving through seaports. These funds, currently collected from users of 
navigation channels, are more than 31 times greater than the cost of 
maintenance dredging (approximately $500 million). Expected increases 
in customs collections due to increased trade would likely be enough to 
pay for maintenance dredging. The following table contains the custom 
receipts for this 10-year period.
    Based both on the recent Supreme Court decision and the rancorous 
debate during the 1980's, any alternative trade tax/user fee funding 
mechanism will have significant legal and political challenges to 
overcome. In addition, enormous national economic and national security 
benefits are threatened if the Federal Government does not continue to 
make these navigation channel investments.
    As described above, benefits of safe and efficient trade provided 
by the Nation's system of navigation channels are spread throughout the 
country. In addition, the benefits to the Nation resulting from 
national defense, commercial fishing, research and recreational users 
are immeasurable; assessing fees on these users, however, was not part 
of the 1986 HMT funding mechanism. The burden for raising funds to pay 
for dredging should be spread across the whole Nation because all our 
citizens benefit. General Treasury funding of maintenance dredging 
should be resumed.

 
----------------------------------------------------------------------------------------------------------------
                                                                 70 percent of Total
                   Year                        Total Receipts      (Assumed Attrib.    Yr. to Yr.     1986-1996
                                                                  to  Seaport Ports)  percent chg.  percent chg.
----------------------------------------------------------------------------------------------------------------
1986......................................     14,731,191,766       10,311,834,236
1987......................................     16,445,193,364       11,511,635,355        11.64
1988......................................     17,461,632,349       12,223,142,644         6.18
1989......................................     18,649,411,310       13,054,587,917         6.80
1990......................................     19,066,925,772       13,346,848,040         2.24
1991......................................     17,995,115,674       12,596,580,972        -5.62
1992......................................     19,983,701,909       13,988,591,336        11.05
1993......................................     21,570,490,029       15,099,343,020         7.94
1994......................................     22,980,653,342       16,086,457,339         6.54
1995......................................     23,319,330,984       16,323,531,689         1.47
1996......................................     22,342,702,434       15,639,891,704        -4.19         51.67
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 
   Responses of Kurt Nagle to Additional Questions from Senator Reid
    Question 1. I suspect, Mr. Nagle, that your principle concern is 
the Harbor Maintenance Trust Fund, which I am told contains about $1 
billion. In your statement you encourage the Congress and 
Administration to ``develop equitable solutions to the funding 
challenge.'' With the vast interests that your association has in the 
solvency of the trust fund and the ability of the Corps to maintain the 
harbors and ports, you should come to the Congress with options that 
are practical and realistic in an era of shrinking budgets.
    Response. For the over 200 years prior to 1986, the Federal 
Government was responsible for funding the construction and maintenance 
of navigation channels from the general treasury. The Federal 
Government recognized the paramount importance of international and 
domestic waterborne trade to the economic, and ultimately, social, 
vitality of the country. Every State in the Nation benefits from the 
system of ports that has developed, in partnership between the Federal 
Government and local/State governments. As an example, attached is a 
summary of ports used to handle international trade flowing into and 
out of Nevada. Sixteen ports each handled more than 1 percent of 
Nevada's total imports and exports (based on tonnage); 7 of the ports 
are on the Pacific Coast; 4 are on the Gulf Coast; and, 5 are on the 
Atlantic Coast.
    While the Nation's public ports do have a vast interest in seeing 
the Federal Government maintain its long-held responsibility to 
construct and maintain navigation channels, we are also concerned that 
the enormous investments ports have made in the land-side 
infrastructure remain viable and competitive. Relying in good faith on 
this long-standing partnership, local port authorities have spent over 
$16.8 billion since World War II and expect to spend an additional $1.3 
billion annually to construct and maintain landside facilities over the 
next 5 years.
    For over 2 years, a task group of AAPA members examined the issues 
surrounding Federal channel maintenance funding, including possible 
alternatives to the Harbor Maintenance Tax. AAPA considered four 
criteria is assessing possible Harbor Maintenance Tax alternatives: (1) 
there should be equity among ports so that each port gets a reasonable 
return for fees paid on cargo moving through it; (2) the fee should not 
add to the price of the Nation's bulk export products (e.g., grain, 
coal), making these commodities uncompetitive in international markets; 
(3) the fee should not alter the competitive position among U.S. ports 
or induce the diversion of cargo from U.S. ports to Canadian or Mexican 
ports; and, (4) the fee should meet the constitutional test set out by 
the Supreme Court that it should be reasonably related to the service 
provided. As is explained in the attached white paper, AAPA considered 
a number of alternatives to the existing HMT but determined that none 
satisfied all of the criteria.
    Because of the enormous national economic and national security 
benefits, and because the diverse navigation user community makes 
assigning a fee based on use extremely difficult, Federal Government 
should reaffirm its long-standing responsibility for maintaining 
navigation channels through funding from general treasury.

    Question 2. Nevada does not have a harbor, but I must raise the 
problem that both Mr. Nagle and Mr. Higgins should address: How should 
the extensive and complex problems of the harbors and beach erosion be 
addressed in fiscally constraining years and be balanced with other 
programs and activities of the Corps?
    Response. As stated above, in my testimony, and in the attached 
white paper, AAPA believes that adequately constructed and maintained 
navigation channels are too important to the Nation to be compromised 
in fiscally constraining years; these assets return much more money to 
the Federal Government than they cost. Furthermore, the prospect of 
increasing fees on the commercial shipping community appears contrary 
to the Federal Government's objective of increasing international 
trade; direct navigation users are already significantly taxed. A 1993 
General Accounting Office study found that 12 Federal agencies levy 117 
assessments on waterborne trade. In 1996, receipts from these fees were 
152 percent of the level raised only 10 years earlier, making our 
exports (e.g., coal) more expensive and less competitive in 
international markets.
    Customs revenues in fiscal year 1996 totaled $22.3 billion, of 
which roughly 70 percent (or $15.6 billion) is attributable to cargo 
moving through seaports. These funds, currently collected from users of 
navigation channels, are more than 31 times greater than the cost of 
maintenance dredging (approximately $500 million). Expected increases 
in customs collections due to trade growth, which according to the 
Custom Service will triple (import volume) by 2020, would likely be 
enough to pay for maintenance dredging. The following table contains 
the custom receipts for this 10-year period.
    Based both on the recent Supreme Court decision and the rancorous 
debate during the 1980's, any alternative trade tax/user fee funding 
mechanism will have significant legal and political challenges to 
overcome. In addition, enormous national economic and national security 
benefits are threatened if the Federal Government does not continue to 
make these navigation channel investments.
    The benefits of safe and efficient trade provided by the Nation's 
system of navigation channels are spread throughout the country. In 
addition, the benefits to the Nation resulting from national defense, 
commercial fishing, research and recreational users are immeasurable; 
assessing fees on these users, however, was not part of the 1986 HMT 
funding mechanism. The burden for raising funds to pay for dredging 
should be spread across the whole Nation because all our citizens 
benefit. General Treasury funding of maintenance dredging should be 
resumed.

 
----------------------------------------------------------------------------------------------------------------
                                                                 70 percent of Total
                   Year                        Total Receipts      (Assumed Attrib.    Yr. to Yr.     1986-1996
                                                                  to  Seaport Ports)  percent chg.  percent chg.
----------------------------------------------------------------------------------------------------------------
1986......................................     14,731,191,766       10,311,834,236
1987......................................     16,445,193,364       11,511,635,355        11.64
1988......................................     17,461,632,349       12,223,142,644         6.18
1989......................................     18,649,411,310       13,054,587,917         6.80
1990......................................     19,066,925,772       13,346,848,040         2.24
1991......................................     17,995,115,674       12,596,580,972        -5.62
1992......................................     19,983,701,909       13,988,591,336        11.05
1993......................................     21,570,490,029       15,099,343,020         7.94
1994......................................     22,980,653,342       16,086,457,339         6.54
1995......................................     23,319,330,984       16,323,531,689         1.47
1996......................................     22,342,702,434       15,639,891,704        -4.19         51.67
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 
                 Nevada Trade by Port and World Region
    This section presents Nevada import and export tons, value and TEUs 
by port and world region. The principal observations are:
     16 ports handled 95 percent of Nevada tons; 15 ports 
handled 95 percent of Nevada; and 12 ports handled 95 percent of Nevada 
TEUs.
     16 ports handled more than 1 percent of Nevada total 
import and export tons. 7 of the ports are on the Pacific Coast, 4 of 
the ports are on the Gulf Coast and 5 of the ports are on the Atlantic 
Coast.
     13 ports handled more than 1 percent of Nevada total 
import and export value. 6 of the ports are on the Pacific Coast, 4 of 
the ports are on the Atlantic Coast and 3 of the ports are on the Gulf 
Coast.
     12 ports handled more than 1 percent of Nevada total 
import and export TEUs. 6 of the ports are on the Pacific Coast, 4 of 
the ports are on the Atlantic Coast and 2 of the ports are on the Gulf 
Coast.
     13 world regions traded more than 1 percent of Nevada 
total import and export tons. 5 of the regions are in Asia, 2 of the 
regions are in the Americas, 5 of the regions are in Europe/Africa and 
one of the regions is Australia-NZ.
     11 world regions traded more than 1 percent of Nevada 
total import and export value. 5 of the regions are in Asia, 3 of the 
regions are in Europe/Africa, 2 of the regions are in the Americas and 
1 of the regions is Australia-NZ.
     11 world regions traded more than 1 percent of Nevada 
total import and export TEUs. 5 of the regions are in Asia, 3 of the 
regions are in Europe/Africa, 2 of the regions are in the Americas and 
1 of the regions is Australia-NZ.

    Data Source: Journal of Commerce PIERS, Waterborne Statistics 1993-
1994, U.S. Army Corps of Engineers, IWR.












         Prepared Statement of Scott C. Faber, American Rivers
    Mr. Chairman, thank you for the opportunity to testify on the Water 
Resources Development Act of 1998. My name is Scott Faber and I am the 
Director of Floodplain Programs for American Rivers, a national river 
conservation group based in Washington, DC.
    I would like to share our strong support for three nationally 
important initiatives: S. 1399, the Missouri River Enhancement Program 
proposed by Senator Bond; expansion of the Environmental Management 
Program for the Upper Mississippi River; and the Challenge 21 Program 
proposed by the Corps of Engineers.
                   missouri river enhancement program
    As we near the 200th anniversary of Lewis & Clark's historic voyage 
up the Missouri River, we have a once-in-a-lifetime opportunity to 
boost recreation and tourism, revitalize riverfront communities, and 
restore habitat for river wildlife. In the same year that the Army 
Corps was founded, Lewis & Clark's Corps of Discovery was undertaking 
one of the greatest adventures in American History.
    In 1804, Lewis and Clark bore witness to some of nature's greatest 
scenes. Far more than explorers, Lewis and Clark were also pioneering 
naturalists. Their journals are filled with descriptions of the river 
valley and its wild inhabitants, ranging from herds of 10,000 buffalo 
to a flock of white pelicans more than three miles long. The Corps of 
Discovery recorded scores of plants, insects, fish, birds, and animals 
previously unknown to science, ranging from least terns and prairie 
dogs to cutthroat trout.
    The Missouri River of Lewis and Clark featured thousands of islands 
and sandbars separated by two constantly shifting channels. Dense 
forests, shallow wetlands, and endless prairies bordered the river. 
Water also flowed through thousands of smaller side channels that 
provided a wide variety of water depths and speeds.
    The river was in a constant state of change. As snow melted and 
spring rains fell, floods inundated riverside land, replacing ancient 
hickory and elm with cottonwood and willow. Eroding banks contributed 
the basic building materials for sandbars, islands, and snags.
    Floods also acted as a reproductive cue, and allowed fish to 
migrate out of the river's main channels into slower, shallow water on 
the floodplain to spawn. As flood waters receded, trees were washed 
into the river and accumulated in side channels, fueling the production 
of insects consumed by fish and waterfowl. As river levels fell, 
sandbars emerged, allowing terns, plovers, and other shorebirds to nest 
and forage. More than 500 different species of fish and wildlife relied 
upon this dynamic template for their survival.
    Mostly, what Lewis and Clark saw, we cannot. Nearly 200 years after 
their voyage of discovery, Lewis and Clark would hardly recognize the 
Missouri River. Today, white pelicans are rarely seen on the Missouri, 
and the least tern and several other species are considered endangered 
by the Federal Government.
    Dams and channels created to support navigation, generate 
hydropower and reduce flooding have dramatically altered the Nation's 
longest river, eliminating the natural meanders and oxbows that once 
supported one of the world's most diverse fisheries. Engineers forced 
the river's restless, braided channels into a single, deep, stabilized 
navigation canal. The river was narrowed by half and shortened by 127 
miles. Nearly all of the river's islands and sandbars were lost. As 
nurseries for wildlife were destroyed, one-fifth of the fish species 
native to the Missouri have been placed on Federal and State watch 
lists. Many species have fallen to less than 10 percent of their 
historic population levels.
    As the Corps of Engineers replaced hundreds of shallow, slow moving 
channels with a swift, deeper canal, it eliminated the places fish used 
to feed, reproduce, and conserve energy. As forests and prairies have 
been replaced with corn and soybeans sequestered behind levees, trees 
are no longer washed into the river during floods and fish can no 
longer migrate onto the river's floodplain to spawn. The construction 
of dams sharply reduced the amount of sand and silt transported by the 
Big Muddy, eliminating the building materials for islands and sandbars 
and encouraging the river to dig an ever-deeper channel. The amount of 
sand and silt transported by the river fell by two-thirds, eliminating 
the muddy shroud that once protected catfish and bigmouth buffalo from 
sight-feeding predators. Dam operations interrupt the rising flows 
which once triggered reproduction and migration.
    Sturgeon, paddlefish, catfish, chubs, minnows, and other fish 
species that evolved in the formerly shallow, muddy, and ever-changing 
Missouri have rapidly declined. The pallid sturgeon, a species that 
emerged over 150 million years ago, has been nearly eliminated in 50 
years. Even catfish--the cornerstone of the river's commercial fishing 
industry--are becoming rare. Consequently, the number of commercial 
fishers has dropped from nearly 1,000 to less than 400.
    The loss of sandbars has reduced nesting habitat for two federally 
endangered birds, the least tern and the piping plover. Both birds nest 
on barren sandbars and forage in shallow water. But today, sandbars are 
frequently submerged during the summer nesting season. In addition, 
poorly timed flows often destroy established nests, and the absence of 
high flows allows sandbars to become overgrown with vegetation. Other 
shorebirds, wading birds, and waterfowl have declined as places to 
nest, forage, and rest have been eliminated, and the number of 
thrushes, warblers, wrens, sparrows, and other small perching birds 
which once used the river's floodplain during their annual migration 
has also dropped.
    As we celebrate the 200th anniversary of Lewis & Clark's voyage of 
discovery, millions of Americans will re-trace their steps. Today, we 
can only imagine what Lewis and Clark saw. We cannot restore the river 
Lewis and Clark knew, but we can repair a river that will attract 
recreation and tourism, reestablish riverfronts as community centers, 
and restore habitat for river wildlife. We can create a Missouri River 
Lewis and Clark would recognize.
    The River Enhancement Program proposed by Senator Bond can be the 
centerpiece of these efforts. Unlike the existing Missouri River Fish 
and Wildlife Mitigation Program, which authorizes the Corps to re-open 
historic side channels and sloughs, S. 1399 authorizes the Corps to 
modify the rip-rap, wing dikes and other river training structures 
which line the Missouri's bank to create river habitat--without 
interfering with commercial navigation or private property rights. S. 
1399 reflects the dramatic change that is occurring within the Corps of 
Engineers. No longer merely dam builders, today's Corps of Engineers is 
struggling to strike a balance between the needs of nature and 
navigation. This program takes a decisive and aggressive step toward 
rehabilitation of the Missouri River--the type of action which will 
restore the river to a condition that even Lewis and Clark would 
recognize.
    We strongly urge you, Mr. Chairman, to advance the rehabilitation 
of the Missouri River and the revitalization of its riverside 
communities by including the River Enhancement Program in the Water 
Resources Development Act of 1998.
        upper mississippi river environmental management program
    Like the Missouri, the long-term health of the Mississippi River 
from Saint Paul to Saint Louis is threatened.
    Dams, levees and river training structures have robbed the 
Mississippi of its power to create new habitat during periods of high 
flow. Sloughs, side channels and backwaters which fill with silt and 
sediment are no longer replaced during floods but are instead replaced 
by State and Federal restoration programs.
    The Environmental Management Program on the Upper Mississippi River 
has restored 28,000 acres of habitat for river wildlife in five States 
and dramatically improved our understanding of the river's needs. With 
little fanfare, the Saint Louis District of the Corps of Engineers 
changed dam operations on the Mississippi River to quietly create more 
than 3,000 acres of new habitat for river wildlife.
    Unfortunately, habitat is being lost faster than it can be 
replaced, and the Corps recently concluded that--absent action by the 
Congress--the Upper Mississippi River will experience a shift to less 
desirable fish species, poorer water quality and fewer areas which are 
able to support migratory waterfowl. Far more than fish and wildlife 
are at stake. More than 12 million people use the Upper Mississippi 
River for recreational purposes each year, spending $1.2 billion and 
supporting 18,000 jobs.
    By increasing the authorized spending level for the Environmental 
Management Program from $19.4 to $33.2 million, Congress can ensure 
that the Upper Mississippi River continues to be both a working river 
and a living river. The Upper Mississippi is the hardest working river 
in the Nation, annually moving more than 90 million tons of cargo The 
river is also a nationally significant natural resource, sheltering 
more than 400 different species of wildlife, acting as the migration 
corridor for 40 percent of North America's waterfowl, and harboring the 
Nation's most ancient lineage of freshwater fish.
                        challenge 21 initiative
    Finally, I would like to share our strong support for the Challenge 
21 Initiative. The Corps of Engineers has developed the Challenge 21 
Initiative to fill an important void in the Corps' flood loss reduction 
arsenal--pre-disaster hazard mitigation. Despite our efforts, the 
overall cost of disasters continues to grow. From 1989 to 1993, the 
average annual losses from disasters were $3.3 billion. But, in the 
last 4 years, average annual losses from disasters have quadrupled to 
$13 billion. Whether we live in disaster-prone areas or not, all 
Americans have felt the effect of these devastating natural disasters. 
Since 1989, FEMA's disaster costs have topped $22 billion, a 550 
percent increase over the previous 10 years.
    While structural projects will continue to be needed, our Nation's 
flood control experts have urged us to place greater reliance on 
voluntary relocation, elevation and other solutions which permanently 
reduce the threat of flood losses while simultaneously protecting 
streamside habitat.
    The land bordering our rivers and streams is critically important 
to river health--acting as a buffer which filters polluted runoff; 
providing shade which reduces water temperatures; contributing the 
leaves, trees and other debris that make up the base of the aquatic 
food chain; giving the river more room to spread out during periods of 
high flow; and providing spawning habitat for a wide variety of 
species.
    Unlike structural flood control projects, the Challenge 21 
Initiative is designed to satisfy all of the needs of riverside 
communities--enhanced water quality, reduced flood losses, habitat for 
river wildlife, and increased opportunities for recreation. Many 
riverside communities are struggling to identify measures which reduce 
flood losses while simultaneously re-establishing their riverfronts as 
community centers. The Challenge 21 Initiative is designed to meet 
their long-term economic and environmental needs.
    We have already seen the benefits of voluntary relocation in places 
like Arnold, Missouri, which was devastated by the Great Flood of 1993. 
Disaster relief for Arnold's flood victims topped $2 million in 1993. 
But, following a voluntary relocation program, Federal assistance was 
less than $40,000 when floodwaters returned in 1995. Overall, more than 
20,000 homes and businesses across the Nation have been voluntarily 
relocated, elevated or acquired since 1993.
    We strongly support the Challenge 21 Initiative and other efforts 
to expand pre-disaster and post-disaster mitigation efforts. And, we 
urge you to meet the long-term needs of the Missouri River and the 
Upper Mississippi River by authorizing the Missouri River Enhancement 
Program proposed by Senator Bond, and by expanding the Environmental 
Management Program for the Upper Mississippi River.
    Thank you for opportunity to provide testimony this morning. I 
would be happy to respond to your questions.
                                 ______
                                 
Responses of Scott E. Faber to Additional Questions from Senator Chafee
    Question 1a. I was very impressed with your testimony and am 
interested in what led to the Missouri River restoration bill 
introduced by Senator Bond. Who played a role in that effort? Was it 
coordinated between the conservation community and the navigation 
interests?
    Response. The spirit of collaboration which ultimately led to S. 
1399 began more than 3 years ago, when representatives of navigation, 
agriculture and conservation groups created a collaborative process 
designed to balance the needs of nature and navigation on the Upper 
Mississippi River.
    American Rivers and MARC 2000, a navigation industry trade 
association, established the ``Upper Mississippi River Summit'' in 1995 
to seek compatibility between economic and environmental uses of the 
Upper Mississippi River. In February 1996, participants in the first 
Summit set aside historic antagonisms and agreed to work 
collaboratively in five teams of public and private interests. In 
February 1997, approximately 50 navigation, agriculture, conservation 
and government organizations adopted the recommendations of the teams, 
including improved dam operations, floodplain restoration projects, 
innovative river training structures, improved watershed management, 
and the development of a science-based natural resources blueprint. In 
March 1998, more than 80 organizations joined a revised vision 
statement (Note: See resolution on page 103).
    The spirit of collaboration and mutual respect which has taken hold 
among interests concerned about the Upper Mississippi River has 
recently developed among public and private interests concerned about 
the Lower Missouri River as well. With the encouragement of Senator 
Bond, public and private interests began to collaboratively address 
threats to the river's natural resources. The result was S. 1399, which 
authorizes the Corps to modify the dikes, rip-rap and other structures 
which control the Missouri River to create the slow-flowing, shallow-
water habitat preferred by river wildlife. Senator Bond and his staff 
led our discussions, ensuring that concerns regarding navigation, flood 
control and property rights were addressed. Ultimately, representatives 
of American Rivers, MARC 2000 and the Missouri Farm Bureau were able to 
join Senator Bond under the Arch in Saint Louis to announce the bill's 
introduction.

    Question 1b. What sorts of Army Corps analysis or studies do we 
have to justify the proposed effort?
    Response. The Corps of Engineers and other public and private 
agencies have conducted a wide variety of specific and general studies 
which support the modification of bank stabilization structures to 
restore aquatic habitat. Due to the length of the following documents, 
copies were not provided but are available upon request.
    (1) U.S. Army Corps of Engineers, Omaha District, 1998. Technical 
Report on modifications to bank stabilization structures for the 
Waverly Reach and Nebraska City Reach of the Missouri River. (predicts 
the benefits of modifications to river training structures for selected 
locations in Nebraska, Iowa and Missouri).
    (2) U.S. Army Corps of Engineers, Omaha District, 1997. Technical 
Report on modifications to bank stabilization structures for the Omaha 
Reach of the Missouri River (predicts the benefits of modifications to 
river training structures for selected locations in Nebraska and Iowa).
    (3) U.S. Army Corps of Engineers. July 1994. Missouri River Master 
Water Control Manual Review and Update Study. Draft Environmental 
Impact Statement (describes the impact of river training structures on 
wildlife habitat, geomorphology).
    (4) U.S. Army Corps of Engineers. July 1994. Missouri River Master 
Water Control Manual Review and Update Study. Technical Reports. Vols. 
7C-7E, 7F-7G, and 7H (describes the impact of river training structures 
on fish, nesting waterfowl, wetlands and riparian habitat).
    (5) U.S. Fish and Wildlife Service, Biological Opinion (Draft), 
1993. (describes the impact of channelization on river wildlife and 
supports the modification of river training structures to recover 
endangered species, including the pallid sturgeon.
    (6) U.S. Fish and Wildlife Service, 1993. Pallid Sturgeon Recovery 
Plan. U.S. Fish and Wildlife Service, Bismarck, ND, 55 pas. (describes 
the impact of channelization on the pallid sturgeon and recommends 
modifications to bank stabilization structures to create shallow water 
habitat).
    (7) Hesse, L.W., Mestl, G.E., and Robinson, J.W. 1993. Status of 
selected Missouri River fish species, in Hesse, L.W., Stalnaker, C.B., 
Benson, N.G., and Zuboy, J.R., eds, Restoration planning for the rivers 
of the Mississippi River ecosystem: Washington, DC, National Biological 
Survey Report 19, pp. 327-340. (assesses the status of Missouri River 
fish species and the impacts of channelization, changes in hydrology).
    (8) Galat, D.L., Robinson, J.W., and Hesse, L.W. 1996. Restoring 
aquatic resources to the lower Missouri River: Issues and initiatives, 
in Galat, D.L., and Frazier, A.G., eds., Overview of river-floodplain 
ecology in the Upper Mississippi River Basin, V.3 of Kelmelis, J.A. 
ea., Science for floodplain management into the 21st century: 
Washington, DC, U.S. Government Printing Office, pp. 49-71. (describes 
the impacts of channelization and support modifications to bank 
stabilization projects to create habitat).
    (9) U.S. Army Corps of Engineers, 1982. Technical Report on the 
influence of channel regulating structures on fish and wildlife 
habitat, 68 pas, Institute of River Studies at the Univ. of Missouri-
Rolla. (describes the impact of channel training structures on 
geomorphology, and wildlife).
    (10) U.S. Fish and Wildlife Service. 1980. Fish and Wildlife 
Coordination Act Report, Missouri River Stabilization and Navigation 
Project (Sioux City, Iowa, to mouth), Habitat Restoration. 77pp. 
(documents the impact of bank stabilization projects on wildlife 
habitat between Sioux City and Saint Louis).
    (11) Funk, J.J., and Robinson, J.W. 1974. Changes in the channel of 
the lower Missouri River and effects on fish and wildlife: Jefferson 
City, Missouri Department of Conservation, Aquatic Series 11, 52pp. 
(describes the impact of channelization on wildlife habitat, and 
accompanying declines in fish, forbearers, and waterfowl).
    (12) U.S. Fish and Wildlife Service. August 1994. Draft Biological 
Opinion on the Missouri River Master Water Control Manual Review and 
Study and Operations of the Missouri River Main Stem System. U.S. Fish 
and Wildlife Service, Region 6--Denver, CO, Region 3--Fort Snelling, 
MN, 139 pas. (details the losses of fish and wildlife and their 
habitats due to both dams on the Missouri and channelization of the 
lower river, and discusses the need to create a diversity of habitat in 
the Missouri's main channel by modifying river training structures).
    (13) Missouri River Natural Resources Committee. 1997. Restoration 
of Missouri River Ecosystem Functions and Habitats. (details lost fish 
and wildlife habitat due to dams and channelization, and discusses 
modifications to river training structures as a means to provide needed 
habitat diversity).

    Question 2. We tried hard to increase the funding levels for 
environmental projects and programs in the 1996 WRDA. Is there a 
particular project, program or policy from that bill that you think has 
worked exceptionally well?
    Response. Since 1986, the Corps of Engineers has become the 
Nation's leading environmental restoration agency.
    Through programs like the Section 1135 Program, the Upper 
Mississippi River Environmental Management Program, and efforts to 
restore Florida's Everglades, the Corps has successfully restored 
hundreds of thousands of acres of wildlife habitat. Under Section 1135 
of the Water Resources Development Act of 1986, for example, the Corps 
has restored nearly 400 acres of wetlands, woodland and grassland in 
the Yolo Basin, transplanted seagrass in the Laguna Madre, and 
reforested the floodplain of the Mississippi River. Public and private 
interests increasingly rely on the Corps' expertise to protect and 
restore floodplain, wetland and aquatic habitat.
    The long-term health of the Nation's rivers and streams will 
largely depend upon habitat restoration efforts by the Corps. Dams and 
channelization have dramatically altered the Nation's rivers, 
eliminating the habitat river wildlife need to feed, conserve energy 
and reproduce, and altering the hydrologic cues that trigger spawning 
migrations. No other Federal agency has the authority and expertise 
needed to modify existing water resources infrastructure to enhance the 
environment. In addition to Section 1135, the Corps has successfully 
modified dam operations to increase aquatic habitat. For example, the 
Saint Louis district recently lowered water levels during the summer 
months to trigger the growth of marsh plants, creating more than 3,000 
acres of new habitat for migratory waterfowl at no Federal expense.
    Two provisions of the Water Resources Development Act of 1996 have 
dramatically expanded the Corps's ability to protect our natural 
resources. Section 206 of the Water Resources Development Act of 1996 
provides the Corps greater flexibility to protect and restore aquatic 
habitat than is now provided under the Section 1135. Section 207 allows 
the Corps to cost-effectively maintain navigable waterways and dispose 
of dredged material while simultaneously protecting and enhancing the 
environment by permitting the Corps to adopt alternatives which are 
more costly but which provide substantial environmental benefits. 
Permitting the Corps to marginally increase maintenance costs to 
protect and enhance the environment results in long-term savings in two 
ways: by eliminating disputes which increase the administrative costs 
of maintenance, and by ultimately reducing the costs of habitat 
restoration.
    Despite the enormous benefits of these environmental provisions, 
two other sections of the Water Resources Development Act of 1998 will 
ultimately have far greater effect on the Nation's rivers and streams: 
flood control reforms and an increased focus on watershed management 
and restoration.
    By increasing the local share of flood control projects and 
requiring sponsors to develop and implement floodplain management 
plans, Congress gave communities greater incentive to direct new 
development from flood-prone areas. Despite spending more than $30 
billion on dams and levees, flood losses have more than tripled since 
1951, when adjusted for inflation. Rather than limiting development on 
flood-prone lands, New Deal policies inadvertently encouraged the 
development of floodplains, placing thousands of homes and businesses 
in harm's way. Heavy reliance on structural solutions created a false 
sense of security which encouraged development in flood-prone areas, 
multiplying the consequences of a structure's inevitable failure.
    In recent years, many communities have rejected levees and dams in 
favor of non- structural alternatives, including relocation, elevation 
and land acquisition. For example, the city of Tulsa recently rejected 
channelization in favor of using greenways, ball fields and permanent 
lakes to provide temporary flood storage during high water. Following 
floods on the Mississippi and Missouri rivers in 1993, more than 10,000 
homes and businesses were voluntarily relocated from harm's way. Since 
1993, the Federal Emergency Management Agency has relocated 15,000 
additional structures in ten States.
    The residents of Napa County recently approved a 20-year, $220 
million effort to remove levees, restore floodplain wetlands and 
relocate vulnerable homes and businesses (see attached).
    Although the flood control reforms included in the Water Resources 
Development Act of 1996 create new incentives for improved floodplain 
management, Congress failed to give the Corps authority to successfully 
participate in non-structural alternatives. Although a congressionally-
mandated report on impediments to non-structural alternatives is not 
complete, flood control experts have identified five internal 
obstacles: one, Corps planning guidance excludes the residual costs 
associated with a structure's failure even though levees only provide a 
limited amount of protection; two, Corps planning guidance fails to 
include the benefits of a natural floodplain, including improved water 
quality, wildlife habitat, enhanced recreation and tourism, improved 
quality of life, and scenic benefits; three, Corps feasibility studies 
rarely consider a range of non-structural alternatives, ignoring non-
structural alternatives which provide less than a 100-year level of 
protection; four, the Corps systematically undervalues the benefits of 
river recreation to riverside communities by adopting methodologies 
which exclude recreational use at undeveloped sites.
    In order to address these obstacles, we urge Congress to support 
the Challenge 21 Initiative. This fills an important void in the Corps' 
flood loss reduction arsenal--pre-disaster hazard mitigation. Unlike 
structural flood control projects, the Challenge 21 Initiative is 
designed to satisfy all of the needs of riverside communities--enhanced 
water quality, reduced flood losses, habitat for river wildlife, and 
increased opportunities for recreation. Many riverside communities are 
struggling to identify measures which reduce flood losses while 
simultaneously re-establishing their riverfronts as community centers.
    In addition to the historic flood control reforms included in the 
Water Resources Development Act of 1996, Congress also authorized wider 
use of watershed management in Section 503, which authorizes watershed 
management studies, and Section 340, which expanded the Planning 
Assistance to States program to include watershed management. 
Exacerbating inappropriate development in the floodplain are thousands 
of seemingly unrelated decisions throughout river basins which have 
increased the rate at which water moves off the surface of the land and 
into our rivers and streams. Rather than approaching the problem of 
flood-loss reduction through a project-by-project approach, the Corps' 
new focus on watershed management allows the agency to address the 
major cause of increasing flood losses: hydrologic alteration of our 
river basins. Corps planners have embraced this new philosophy, and are 
working with State and local officials in hundreds of watersheds to 
develop watershed management strategies.
    Although the Corps has philosophically adopted a watershed approach 
to flood loss reduction, they have been unable to use Section 503 in 
practice. The Corps has interpreted Section 503 as limiting the 
construction of projects to those river systems identified in the Water 
Resources Development Act of 1996. The Water Resources Development Act 
of 1998 provides a new opportunity to clarify the meaning of Section 
503, and to instruct the Corps to adopt a watershed approach during the 
development of all future flood control projects.

    Question 3. Other than the Administration's ``Challenge 21'' and 
reauthorization of the Upper Mississippi River Environmental Management 
Program, what do you think the Congress should do in WRDA 98 to improve 
natural resource protection?
    Response. American Rivers urges the committee to continue to reform 
our Nation's flood control policies by giving communities the tools and 
incentives they need to direct development away from flood-prone areas. 
In particular, we urge you to consider the creation of a cost-sharing 
system designed to reward communities that have taken affirmative steps 
to reduce flood losses through non-structural means such as relocation, 
elevation and land acquisition.
    We envision a cost-sharing system that would require local sponsors 
to pay 50 percent of the cost of flood-control projects. However, 
communities that have actively preserved natural floodplain values, or 
discouraged development in the floodplain, would continue to provide 
just 35 percent of the cost of flood-control projects. The community 
rating system now employed by the Federal Emergency Management Agency 
to reward communities which exceed the minimum requirements of the 
National Flood Insurance Program could be adapted to assess local 
sponsors of Federal flood control projects.
    American Rivers also urges the committee to authorize new 
environmental restoration projects for our degraded rivers and streams. 
Dozens of communities hope to take advantage of the new Section 206 
program, which authorizes the Corps to restore degraded ecosystems, and 
other Corps authorities to revitalize their hometown rivers. In 
particular, we urge the committee to authorize projects which restore 
degraded salmon habitat in the Pacific Northwest, where past salmon 
recovery efforts have largely failed.
    In addition, several important projects will be under consideration 
in the Water Resources Development Act of 1998, including a flood 
control project proposed for the American River and a flood control 
project proposed for the Red River of the North. We urge the committee 
to reject proposals to construct a new dam on the American River and 
instead support efforts to modify existing levees and Folsom Dam. We 
strongly support proposals to set back levees and construct a floodway 
along the Red River of the North. Both proposals will meet flood loss 
reduction needs and protect the environment, a standard by which all 
proposed flood control projects should be measured.
    Finally, the committee may consider whether to authorize a 
``comprehensive study'' for the Upper Mississippi River. As currently 
conceived, the planning effort would attempt to integrate efforts 
designed to assess navigation, flood control and environmental needs. 
In particular, the study would consider a wide range of flood control 
alternatives, including higher levees, setting back levees, removing 
levees, acquiring land, and restoring wetlands. Long-term recreation, 
navigation, habitat, water quality and bank erosion needs would also be 
addressed. Although we recognize the need for integrated planning, we 
urge the committee to ensure that such a study will fairly, accurately 
and thoroughly consider all reasonable alternatives, including habitat 
restoration, wetland restoration, and non-structural flood control 
alternatives. In light of disputes regarding the Lower Mississippi 
River mainline levee, we are concerned that the Mississippi River 
Valley Division, formerly the Lower Mississippi River Valley Division, 
is not as committed to habitat restoration and non-structural flood 
loss reduction as the Congress and other Corps divisions. As always, we 
are more than willing to work with the Mississippi River Valley 
Division to balance economic and environmental needs.
                                 ______
                                 
Responses of Scott E. Faber to Additional Questions from Senator Baucus
    Question 1. Mr. Faber, I know you are strongly supportive of the 
Lower Missouri River Enhancement program included in the 
Administration's proposal. Do you see any reason this program would not 
be beneficial to the entire Missouri River?
    Response. Senator, American Rivers strongly supports efforts by the 
Corps of Engineers to restore wildlife habitat in Montana and the 
Dakotas. Like the lower Missouri River, river managers have identified 
dozens of opportunities to protect and restore wildlife habitat, 
including historic side channels and floodplain forest and prairie. As 
the agency with primary responsibility for the management of the 
Missouri, the Corps is uniquely positioned to implement these 
restoration projects.
    In addition to habitat restoration, we urge you to direct the Corps 
to work with the Bureau of Reclamation to consider dam operations in 
western Montana which aid recreation and river wildlife. Currently, 
both agencies collaboratively develop operating criteria for Canyon 
Ferry and other Bureau of Reclamation reservoirs, dramatically 
influencing the regeneration of the Missouri's characteristic 
cottonwoods. The absence of periodic flushing flows eliminates the 
deposition of fresh alluvium that cottonwoods need to germinate. As 
mature cottonwoods die and are no longer replaced, river managers 
predict that we will witness the near absence of cottonwoods between 
Fort Benton and Fort Peck reservoir within 30 years. In addition to the 
aesthetic benefits of cottonwoods, the trees serve as primary roosting 
and nesting habitat for the federally threatened bald eagle. Congress 
should direct the Corps to consider changes in dam operations which aid 
the replacement of cottonwoods.
    Finally, we urge you to support legislation proposed by the 
Missouri River Basin Association to create additional opportunities for 
recreation along the Upper Missouri River. Few rivers possess as much 
economic potential as the Missouri River. Although recreation already 
generates more than $114 million in annual benefits rivers which 
feature healthy wildlife populations and adequate recreational 
facilities frequently generate ten times as many economic benefits as 
the Missouri. For example, recreation on the Upper Mississippi River 
attracts 12 million people who annually spend $1.2 billion, supporting 
18,000 jobs.

    Question 2. The Missouri River Basin Association, which I know you 
are familiar with, has recently released a planning report with many 
recommendations for the management of the Missouri River. One of those 
recommendations is that the Corps should include bank stabilization in 
the Missouri River operation and maintenance budge. Do you support this 
recommendation?
    Response. Although we support efforts to create additional 
recreational opportunities along the Missouri, American Rivers strongly 
opposes additional bank stabilization by public or private interests 
until the Corps of Engineers completes a cumulative impact statement 
which predicts long-term environmental impacts. Although we are aware 
of the concerns of floodplain landowners, we suspect that the 
environmental costs of additional bank stabilization heavily outweigh 
any economic benefits.
    Historic efforts to stabilize the Missouri River have dramatically 
reduced habitat for river wildlife and increased flood losses by 
encouraging floodplain development. The original Missouri River was 
characterized by continuous bank erosion, which created a wide variety 
of channel depths and speeds. The channelization of the Missouri by the 
Corps of Engineers replaced the meandering channels, islands and 
floodplain wetlands of the historic river with a single, deeper and 
faster canal that has diminishing ability to support life. Scientists 
have linked bank stabilization with the decline of one-fifth of the 
fish species native to the Missouri River. In particular, bank 
stabilization eliminates the slow flowing shallow water habitat where 
river wildlife can feed, conserve energy and reproduce. Additional bank 
stabilization in the Dakotas and Montana will further imperil the least 
tern, piping plover and pallid sturgeon, species considered endangered 
and threatened by the U.S. Fish and Wildlife Service.
    Furthermore, additional bank stabilization has historically been 
accompanied by floodplain development, which has in turn led to 
steadily increasing flood losses in Missouri River communities. Many 
homes, built in portions of the floodplain or floodway, have been 
flooded three or more times and several homes have been flooded nine 
times. Until riverside communities in Nebraska and the Dakotas take 
affirmative steps to discourage development in flood prone areas, 
Federal involvement in bank stabilization would be inappropriate.
    An adequate study of bank stabilization impacts and needs would 
consider a range of alternatives, including bank stabilization 
practices which employ natural materials such as willow mats and 
easements which permit some erosion and deposition within the 
Missouri's meander zone.

    Question 3. Mr. Faber, your organization has always been a strong 
supporter of valuing recreation on our Nation's rivers. Could you 
comment on the recreation proposals in the Administration's bill (the 
recreation fees and the Water Foundation) and perhaps suggest to us 
additional ways the Corps could enhance its recreation mission.
    Response. American Rivers strongly supports efforts to boost Corps 
spending on recreational facilities, including the recreation fee 
program proposed by the Clinton Administration. We also support the 
Water Foundation included the Administration's proposals for the Water 
Resources Development Act of 1998 but urge Congress to increase the 
Federal contribution.
    According to Federal agencies, recreational use of the Missouri 
River alone generates more than $114 million in annual economic 
benefits, supporting thousands of jobs in riverside communities. More 
than 10 million people annually recreate at developed recreationsites 
along the Missouri, including sightseeing, hunting, fishing and 
boating. Actual recreational use of the river, including sightseeing at 
undeveloped sites, is thought to be considerably higher. Nebraska 
estimates that use of the Missouri River in Nebraska generates more 
than $300 million in annual economic benefits for riverside 
communities. Visitors to natural resources like the Missouri spent 
$29.2 billion in 1996 to watch wildlife, according to the U.S. Fish and 
Wildlife Service. Fishing and hunting produced even greater economic 
returns.
    Unfortunately, construction and maintenance of recreational 
facilities, wildlife viewing and hunting areas, and habitat for 
wildlife is a low priority for the Corps of Engineers. Although 
recreation on the Missouri produces ten times the benefits of 
commercial navigation, the Corps spends less than $1 million annually 
to maintain recreationsites along the river. By contrast, the Corps 
spends $3 million to $4 million annually to maintain the navigation 
channel. And, recreation on and along the Missouri, unlike navigation, 
is expected to grow as the Nation celebrates the 200th anniversary of 
Lewis and Clark's Voyage of Discovery.
    The recreation fee program proposed by the Clinton Administration 
will help end this disparity by allowing river managers to retain a 
portion of the fees they collect at Corps facilities. In recent months, 
many Corps facilities have been forced to reduce services or close due 
to lack of funding. Allowing Corps officials to retain some of the fees 
they collect will permit proper maintenance of these facilities, and 
allow the Corps to construct new facilities to meet growing demand for 
outdoor recreation. Corps facilities are the most heavily used Federal 
recreational facilities in the Nation. But while no Corps function 
provides as many direct benefits to Americans as the construction and 
maintenance of recreational facilities, most Corps resources aid a 
handful of special interests.
    Although we support the fee program, we urge the Congress to 
consider other measures which restructure the maintenance program of 
the Corps of Engineers to meet growing recreation and environmental 
needs. The Water Foundation proposed by the Clinton Administration will 
effectively stretch existing Corps resources by matching Federal 
dollars with funds acquired from foundations and other private sector 
sources. However, we are concerned that funding levels are simply too 
low to make an effective contribution. The National Fish and Wildlife 
Foundation (NFWF) has successfully expanded the ability of the U.S. 
Fish and Wildlife Service to protect and restore wildlife habitat, but 
Federal funding for NFWF tops $5 million annually.
                                 ______
                                 

               [From the Mississippi Monitor, April 1998]

      Vision Statement of the Third Upper Mississippi River Summit
    The following are excerpts from the vision statement from the third 
Upper Mississippi River Summit:
     By September 1998, a task force shall review and seek to 
identify gaps between existing and proposed studies to outline an 
integrated planning effort. This planning effort will address the needs 
and impacts of navigation, flood damage reduction, recreation, 
floodplain and aquatic habitat, and watershed nutrient and sediment 
inputs.
     Continue enhanced pool management in pool 8, 13, 24, 25, & 
26, identify other opportunities for pool management such as the 
Illinois River, and engage all stakeholders.
     Innovative river training structures which achieve 
multiple-use values.
     Operations and maintenance activities which enable 
increased environmental benefits while maintaining a safe and 
dependable navigation system.
     Encourage voluntary adoption of economically viable and 
ecologically sound land and water management practices which improve 
biotic resources and water quality.
     Support and expedite the development of a habitat needs 
assessment to guide restoration activities such as EMP projects and 
monitoring. This habitat needs assessment will reflect a 
collaboratively developed scope of work.
     Support the development of educational facilities, 
programs, materials and web sites about all aspects of the Mississippi 
River.
     A comprehensive profile of the region that describes the 
total economic values (such as commercial, recreational, tourism, and 
other natural resource-based values) derived from the river.
     Restore 60,000 acres of floodplain habitat by making the 
Upper Mississippi River flood plain a high priority for Federal 
conservation easements. In addition, coordinate Federal, State, local 
and nonprofit programs to acquire fee title from willing sellers for 
conservation purposes, and work with landowners to protect and restore 
private lands within the floodplain by increasing funding for 
conservation programs like Partners for Fish and Wildlife and the 
Wildlife Habitat Incentives Program.
     Support the U.S. Fish and Wildlife Service, as part of the 
revision of refuge Comprehensive Conservation Plans, in evaluating 
expanded refuge boundaries to acquire land from willing sellers in the 
Upper Mississippi River floodplain.
     Improved operation and maintenance for the Mark Twain 
National Wildlife Refuge and the Upper Mississippi River National 
Wildlife and Fish Refuge.
                                 ______
                                 
          Vision Statement III--Upper Mississippi River Summit
    Vision for the Upper Mississippi River--To seek long term 
compatibility of the economic use and ecological integrity of the Upper 
Mississippi River.
    Objective of Summit Meeting--To seek commitment to develop a multi-
interest strategy for managing the Upper Mississippi River.
Whereas:
    (1) The Upper Mississippi River is for purposes of this document 
defined as the main stem of the Mississippi River from Minneapolis, 
Minnesota, to Cairo, Illinois, recognizing main stem impacts from 
measures taken throughout the entire 714,000-square mile watershed;
    (2) The Upper Mississippi River is a multi-purpose resource 
recognized by Congress as both a ``nationally significant ecosystem and 
a nationally significant commercial navigation system'' (Section 1103 
of 1986 Water Resources Development Act);
    (3) The Upper Mississippi River is important for economic and non-
economic uses;
    (4) The initial Summit Meetings focused on identifying natural 
resource and economic issues of the Upper Mississippi River, we now 
need to advance implementation of established objectives.
Therefore:
    We are committed to:
    (1) Collaboratively address Upper Mississippi River needs.
    (2) Identify and prioritize issues and geographic areas in which 
cooperative action is most likely.
    (3) Seek ways to remove obstacles to cooperative action within 
existing programs and authorities.
    (4) Seek funds and/or new authorities, as appropriate for the 
following:
     By September 1998, a task force shall review and seek to 
identify gaps between existing and proposed studies to outline an 
integrated planning effort. This planning effort will address the needs 
and impacts of navigation, flood damage reduction, recreation, flood 
plain and aquatic habitat, and watershed nutrient and sediment inputs.
     Continue enhanced pool management in pool 8, 13, 24, 25, 
and 26, identify other opportunities for pool management such as the 
Illinois River, and engage all stakeholders.
     Innovative river training structures which achieve 
multiple-use values.
     Operations and maintenance activities which enable 
increased environmental benefits while maintaining a safe and 
dependable navigation system.
     Encourage voluntary adoption of economically viable and 
ecologically sound land and water management practices which improve 
biotic resources and water quality.
     An evaluation of the current and future physical structure 
of the river flood plain under current management practices and the 
development of models (e.g. GreatRiverSIM, LMS, and others) to achieve 
a greater understanding of the economic and ecological 
interrelationships of management alternatives;
     Support and expedite the development of a habitat needs 
assessment to guide restoration activities such as EMP projects and 
monitoring. This habitat needs assessment will reflect a 
collaboratively developed scope of work.
     Support the development of educational facilities, 
programs, materials and web sites about all aspects of the Mississippi 
River.
     Encourage the development of brief vision statements 
(maximum one page) including measurable objectives by each stakeholder 
group that can be shared in preparation for the 1998 Interim Report.
     A comprehensive profile of the region that describes the 
total economic values (such as commercial, recreational, tourism, and 
other natural resource-based values) derived from the river.
     Restore 60,000 acres of floodplain habitat by making the 
Upper Mississippi River flood plain a high priority for Federal 
conservation easements. In addition, coordinate Federal, State, local 
and nonprofit programs to acquire fee title from willing sellers for 
conservation purposes, and work with landowners to protect and restore 
private lands within the floodplain by increasing funding for 
conservation programs like Partners for Fish and Wildlife and the 
Wildlife Habitat Incentives Program.
     Support the U.S. Fish and Wildlife Service, as part of the 
revision of refuge Comprehensive Conservation Plans, in evaluating 
expanded refuge boundaries to acquire land from willing sellers in the 
Upper Mississippi River floodplain.
     Improved operation and maintenance for the Mark Twain 
National Wildlife Refuge and the Upper Mississippi River National 
Wildlife and Fish Refuge.
    (5) Convene again in approximately 1 year to review progress and 
reevaluate strategies, with a progress report in 6 months.
                                 ______
                                 
    For a Flood-Weary Napa Valley, A Vote to Let the River Run Wild

                           (By Timothy Egan)

    Napa, CA--April 18.--A good 64 inches of rain has pelted this 
valley of fine wine and pursuers of the sublime since last July. So 
last month, in the middle of yet another El Nino-driven storm, Napa 
Valley residents went to the polls and decided to do something about 
it.
    By a two-thirds majority, Napa County voted to raise taxes to pay 
for ripping out its flood-control system, allowing the near-dead Napa 
River to return to life and run wild for much of its 55 miles. After 
suffering 27 floods in less than 150 years, with flood controls, the 
Napa Valley now will take a chance with unfettered nature.
    In a State where virtually every majority river is shackled by a 
dam, pinched by levees or siphoned for use by distant cities, the vote 
in Napa amounts to a call for revolution in the Nation's war against 
high water.
    By voting to let the river run free, reclaiming much of its own 
meandering path, Napa residents have also steered the Army Corps of 
Engineers, an agency that usually acts like the orthodontists of 
nature, on a new path.
    ``What we will be doing in Napa is radically different from 
anything we have ever done before,'' said Jason Fanselau, a Corps 
spokesman in Sacramento. ``It's going to totally change the way we do 
business.''
    Under the Napa plan, some of the dikes and levees built to keep the 
river in a straight channel--largely without success--would be lowered 
or removed. Bridges that block the flow of high water would be raised 
or torn down. People living in areas that regularly flood would be 
bought out and asked to move. About 600 acres of low-lying land would 
be given back to the river, as wetlands. The river's water will go 
where it usually goes in floods, but in the future nobody will live 
there.
    In Napa, the change is coming from voters: three times in the last 
22 years, the country has voted down Corps proposals for expanding its 
traditional concrete-walled flood control system. But the engineers are 
also undergoing a rethinking of their own.
    Since the epic Mississippi River floods in 1993, the Corps has 
taken a long second look at its century-old efforts to hold back 
flooding rivers with dams, levees, diversions and drainage ditches. A 
levee system unrivaled by anything but the Great Wall of China has not 
only failed to keep the Mississippi between its banks, but also made 
floods downriver more severe by blocking natural outlets for the rising 
waters.
    Rather than rebuilding old, flooded structures, Federal authorities 
have been buying up property in the Mississippi floodplain. But the new 
philosophy has yet to penetrate all of Congress--where the California 
delegation has been trying to get money for at least one new billion 
dollar dam--nor until the Napa vote had it been tested at the ballot 
box.
    The Napa plan is the most systematic effort in the country to try 
what is known as the ``living rivers'' approach to improve flood 
control. In South Florida, the Corps is similarly dismantling dikes and 
dams, but in an effort to restore the Everglades.
    The Napa Valley's existing network of braces, dikes and levees, 
while protecting some people from flooding, sends so much water 
downstream so quickly that it always manages to spill over somewhere.
    The plan now is to combine ecology and engineering. Some dikes and 
reservoirs will be strengthened to slow the river in crucial places. 
But dredging and straightening the riverbed will be largely abandoned, 
and in other sections, the river will be allowed to widen during 
floods, filling the marshlands south of the city of Napa. These 
restored wetlands will work as a sponge, the thinking goes.
    The cost, over 20 years, will be $220 million, half paid by the 
Federal Government, and half coming from a half-cent rise in the county 
sales tax and from the State.
    To many who live in Napa, the most famous wine-growing region in 
the United States, the price is a bargain. Floods from the last 40 
years have cost more than $500 million in property damage.
    ``For over a century, we have fought a losing battle against the 
Napa River,'' city officials wrote in a voter's guide published before 
last month's election. ``We have failed because we didn't respect the 
river's natural tendencies.''
    California requires a two-thirds majority to raise the local sales 
tax. The vote in Napa just made that threshold, getting 68 percent, or 
308 votes more than needed, out of more than 27,000 cast. Opponents of 
the measure, who did not mount an organized campaign, worried that the 
plan would not offer enough certainty for future years.
    The plan seems radical because it calls on people to trust that a 
raging, chocolate-colored river, if allowed to reclaim its old 
floodplain, will ultimately provide more protections than the existing 
network of levees, decades of dredging or a plan once backed by the 
Corps to line the river with concrete.
    ``It will require us to go wider instead of deeper,'' said Paul 
Bowers, the Corps of Engineers official who will co-manage the project 
with the county. ``That was the biggest issue: Will people be able to 
give up that much land to restore a river?''
    Napa County officials say they will buy out several businesses, a 
trailer park, some warehouses and about 16 houses. They will raise 
bridges that have served as blockage points to high-charging rivers. 
Most of the farmland, from high-quality vineyards on down, will stay 
just that, subject to floods in the dormant season in winter, but dry 
in California's typical eight rainless months.
    But some farmland will be bought. Joe Ghisletta 3d, whose family 
has owned farmland in Napa Valley for nearly a century, will sell 68 of 
the family's 192-acre hay farm to the county; it will revert to a 
marsh.
    ``I think over all the whole plan is going to be a blessing for 
this valley,'' Mr. Ghisletta said.
    Tourism is big business in the valley, which gets about five 
million visitors a year. The constant television images in recent years 
of couches floating down the Napa River, or people taking rowboats to 
flooded homes, are not considered the best advertising.
    ``Image is everything in this valley,'' said Moira Johnston Block, 
president of Friends of the Napa River, a citizens group that was 
instrumental in bringing the living river plan to the table. ``The 
floods have been the most ongoing, negative image. Some of the 
winemakers saw this plan as image protection.''
    During the campaign, most of the vineyards promoted the plan. But 
despite the weekend traffic jams of limousines touring the wine 
country, Napa is much more than the gilded valley that tourists 
perceive, Ms. Johnston Block said. The city of Napa, where 70 percent 
of the voters live, is largely blue collar, and the county is full of 
fifth-generation farmers who live by the whims of weather.
    David Prewitt, who lives in a trailer park that is to be moved, 
said he had to abandon the park in January and February because of high 
water. A 20-year resident of Napa, he said he generally favored the 
plan.
    ``They had to do something,'' Mr. Prewitt said, sitting in the 
bright sunshine of a day when Napa's hills were brilliant green from 
the rains. ``They've dredged this river time and again, and put up 
flood walls, and still it always seems to go over its banks.''
    Whether other communities will adopt the Napa plan is uncertain. To 
the east, the Sacramento River and its side creeks are lined by more 
than 1,000 miles of levees, protecting much of the city of Sacramento. 
But new housing developments are planned for areas that have seen 
frequent floods over the last two decades, and business leaders are 
promoting a large dam for the American River, saying it will allow the 
Sacramento area to grow.
    Nationally, reimbursing people for flood damage costs about $5 
billion a year, from disaster aid and related help. The Army Corps of 
Engineers, the agency charged with flood protection, seems committed to 
the new direction.
    ``Napa will be the showcase, because there's nothing quite like it 
anywhere in the country,'' said Homer Perkins, a spokesman for the 
Corps in Washington.
    The test for Napa will come 10 years or so down the road, when the 
living river plan is complete. Ms. Johnston Block said she had an image 
of a benign river: ``You will see a living river, a restored river 
downtown, with marshes and wildlife on one side and latte and wine on 
the other.''
    the Corps is more prosaic. ``I think, 5 to 10 years from now, when 
it starts to rain in the winter, people will be able to sleep at 
night,'' Mr. Bowers said.
                                 ______
                                 
  Prepared Statement of Grover Fugate, on behalf of the Rhode Island 
                  Coastal Resources Management Council
                              introduction
    Good morning. My name is Grover Fugate, I am the Executive Director 
of the State of Rhode Island Coastal Resources Management Council 
(RICRMC). I would like to thank the subcommittee for the opportunity to 
present RICRMC's concerns and interests in the Water Resources 
Development Act of 1998 (WRDA). This testimony will focus upon Rhode 
Island's need for replenishment projects and the national benefits 
derived from them.
                               background
    The south coast of Rhode Island is a southwest--northeast oriented, 
micro-tidal (0.8-1.2 m mean and 1.6 m spring range), sediment-starved 
and wave-dominated shoreline characterized by alternating headlands and 
barriers. The coast is most susceptible to south and southeast waves 
generated by storms that pass to the west of Rhode Island. Shoreline 
erosion along the Rhode Island coast ranges from 0.1 feet per year (.02 
m/yr) to 3.9 feet per year (1.2 m/yr).
    The Rhode Island southern shoreline is in many ways typical of 
other coastal areas along the east coast of the U.S., and the processes 
that formed other east coast shorelines are at work in Rhode Island. 
Yet the south shore of Rhode Island is unique due to the combination of 
glacial depositional processes and subsequent post-glacial sea level 
rise that have resulted in the current barrier/headland configuration 
of the Rhode Island coast.
    About 14,000 years ago the global climate warmed up very rapidly 
and added much additional glacial meltwater to the ocean, causing the 
sea to rise rapidly across Block Island and Rhode Island Sounds to 
arrive in the vicinity of the present shoreline by 4,000 years ago. 
Ocean waves eroded the glacial deposits, carrying sediment in wind-
driven currents alongshore and depositing it as barrier spits in the 
adjacent low-lying areas between the topographically higher headlands. 
As the spits developed and grew alongshore from the headlands, the low-
lying areas behind the spits were almost entirely sealed off from the 
ocean, forming coastal lagoons (coastal ponds) connected to the sea 
through narrow inlets. The inlets are the conduits for the exchange of 
water and sediment in and out of the lagoons, and before they were 
fixed in place by jetties, they were maintained by tidal forces and by 
surges from storms. From the time of this early spit formation to the 
present, the glacial river deposits and glacial till have continued to 
erode, and the barrier spits and coastal lagoons have moved landward 
and upward, all by the force of storm waves and storm surges controlled 
by the level of the sea at the time of the storm. The present 
arrangement of barriers and headlands is controlled by the topography 
of the glacial till and glacial river sediment. The areas of glacial 
deposits with higher relief are exposed at the surface and form the 
present headlands, while those areas below mean low water are now 
topped by barrier spits or submerged by coastal lagoons.
                                 ricrmc
    The State of Rhode Island has endeavored to restrict new coastal 
development and limit repairs to existing development in order to 
mitigate coastal hazards, provide and protect recreational beach areas 
and reduce the expenses incurred by towns, the State of Rhode Island, 
and the Nation due to storm damage and erosion.
    It is the policy of the State of Rhode Island (through creation and 
operation of RICRMC):

          ``to preserve, protect, develop, and where possible restore 
        the coastal resources of the State for this and succeeding 
        generations through comprehensive and coordinated long-range 
        planning and management designed to produce the maximum benefit 
        for society from such coastal resources . . .''

    The process, which includes erosion-rate driven setbacks for new 
construction or significant alterations, property acquisition and 
public education, is a long-term policy. The benefits realized will 
continue to increase through time, however, there are several immediate 
concerns that need to be addressed. These include some measure of 
frontal erosion protection for existing structures, the need for 
recreational beaches and public access and environmental restoration.
                      existing property protection
    In order to protect ecological systems, provide lateral public 
access, prevent detrimental affects to adjacent properties and provide 
recreation beaches, structural shoreline protection is prohibited in 
most areas of Rhode Island. While this policy ensures for future use of 
these areas, current erosion has placed many properties and municipal 
infrastructure in immediate danger from small to moderate sized storms. 
These property owners, town and State managers, need interim measures 
to protect property and infrastructure while the long-term planning 
continues and solutions are implemented (property acquisition and 
relocation/elevation of structures). Beach replenishment is the interim 
measure. Replenishment does protect property and infrastructure without 
detrimental affects to access or recreational beaches. The expense of 
replenishment has been criticized as wasteful spending. Without some 
acceptable measure of protecting existing property while development is 
moved landward away from the immediate coast, similar expenses will be 
incurred (by the Nation) due to storm events and long-term erosion.
                    tourism/recreation/public access
    The tourism economy in Rhode Island has recently exceeded the $2 
billion mark. This revenue is generated primarily by water-adjacent 
activities (beaches and boating). This source of revenue, which can 
help to mitigate coastal issues, requires the presence of recreational 
beaches for the persons visiting the beach for the day, renting a 
cottage for a week or seasonal homeowners as well as regional, national 
and foreign tourists. In addition to the tax revenues lost from the 
tourism and recreation economy, numerous jobs will be lost and 
lifestyles affected.
                       environmental restoration
    The Army Corps of Engineers is currently conducting a feasibility 
study to restore habitat and improve water quality in coastal lagoons 
that have stabilized inlets. Part of this restoration includes dredging 
of settling basins and flood tidal deltas. This type of project 
benefits ecological systems, improves water quality. Additional 
benefits include improved navigation (providing recreational 
opportunities and supporting local economies) and puts sand on the 
beach (protecting property, infrastructure and providing recreational 
beaches).
                        corps project structure
    In order to meet the cost to benefit ratios of a federally funded 
project, the project area must be densely developed. Much of Rhode 
Island's coastline, including the more developed sections, do not meet 
the Federal ratios. This policy encourages development and maintenance 
of overly developed areas constituting large hazard risks and future 
expenses. The State of Rhode Island is actively trying to limit coastal 
development which will reduce the Federal burdens of storm and erosion 
damages to property and infrastructure.
    Where environmental restoration opportunities exist, the funding 
structure for these types of projects should reflect the benefits 
realized. When there are environmental restoration opportunities and/or 
an existing long-term commitment and plan to reduce development that 
will be impacted by coastal processes, the required cost to benefit 
ratio and non-Federal cost share should be adjusted accordingly.
    Additionally, the existing reconnaissance/feasibility study/
implementation phase organization of Corps projects is cumbersome, 
inefficient and discouraging. The organization of projects needs to be 
reviewed to reduce the cost to both the Federal Government and the non-
Federal sponsor as well as result in more implemented projects and less 
expensive studies.
                               conclusion
    Rhode Island needs federally sponsored replenishment projects as 
interim protection for existing development and recreational beaches. 
Design and funding of these projects should reflect the State's 
commitment to reducing coastal hazards and protecting and restoring the 
environment. National benefits include a reduction in post-storm damage 
expenses, improved environment as well as sustained and increase of 
revenue from the recreation and tourism economy.
    Rhode Island desires to continue discussion of these issues to the 
mutual benefit of towns, States and the Nation. Thank you again for the 
opportunity to express our interests and concerns.
                                 ______
                                 
 Responses of Grover Fugate to Additional Questions from Senator Chafee
    Question 1. What are the most important water resource needs in 
Rhode Island?
    Response. The most important water resource needs in Rhode Island 
are water quality, frontal erosion and navigational dredging. All three 
of these issues affect recreational activities (boating, fishing, 
swimming), commercial fisheries (shell fishing, aquaculture) and the 
quality of our ecological systems.
    Improved water quality ensures the availability of swimming beaches 
and improves the habitat of species important to recreational and 
commercial users as well as providing the basis for a healthy 
environment. A strong and healthy environment will, in turn, minimize 
damage from oil spills, etc.
    Frontal erosion is a constant problem along the majority of the 
Rhode Island coast. Although the State of Rhode Island has adopted 
regulations to limit current and future development along the immediate 
coast, existing as well as the limited amount of new development 
continues to be problematic. The process of moving development landward 
away from the coast through setback regulations and property 
acquisition is a slow process. In the interim, Rhode Island needs to 
help protect existing public and private property as well as maintain 
recreational beaches.

    Question 2. Is there anything the Army Corps could improve or do 
differently to improve the situation in our State?
    Response. At present there are two main problems with the 
management of Corps projects. The first is Benefit/Cost ratios that 
reward less than desirable development along the coast and provide no 
assistance to less developed areas that need interim aid as mentioned 
in the response to question 1. Beaches along which there has been and 
continues to be dense development receive the benefit of Corps 
projects. Rhode Island's most developed beaches do not meet the 
necessary benefit/cost ratios due to Rhode Island's efforts to limit 
development in these areas. It is CRMC's belief that such communities 
and States should benefit preferentially over areas that do not 
exercise restraint on coastal development.
    Second, the Corps some times narrow interpretation of a project 
authorization can cause projects to be more complicated, than 
necessary. Particularly projects that involve a habitat restoration 
component are not necessarily conducive to hard and fast engineering 
solutions. A more successful approach would allow the Corps to show 
more flexibility to respond to local conditions and needs, so that 
rigid stances aren't taken and more creative and cost effective 
solutions can be pursued.
    For example, local experts should be consulted at the earliest 
possible stages of project design and continue to be part of the 
process during the design phase. The localities are often aware of 
specifics that are critical to project design, that standard approaches 
do not take into account. Currently, it is apparent that the Corps 
designs projects based on standard operating procedures that may have 
been fine for erosion control projects that they have been doing for 
years, but the newer ventures involving the management of sustainable 
ecosystems, need a more flexible, less centralized paradigm to cope 
with these projects. Otherwise, the Corps ends up designing projects 
which draw critical comments from local scientists. The obvious result 
is, the local experts then suggest significantly different project 
methods, design and scope that would cause a complete redesign of the 
project.
    Projects would be more successful and efficient if the Corps had a 
process where local expert scientists in specific fields could be 
brought in as needed, to design the project and the Corps rely less on 
internal standard approaches. This may be possible, if it is clear in 
the authorization that the end goal of sustainable environments is more 
important, than the Corps need to control the process. And that the 
need to cut small costs, by the utilization of as much in house Corps 
talent as possible, may result in larger total operation cost, if the 
most direct and effective sources of information are not used.

    Question 3. What is the status of the South County shoreline 
protection and environmental restoration feasibility study?
    Response. Currently, the project is behind schedule due to the 
Corps limited expertise and knowledge of recent advances in 
environmental restoration research and methods. As a result, local 
scientists are now working (on their time) with the Corps to develop 
more appropriate research methods. Although the final project will be 
beneficial and provide necessary data, the first year field season 
(now) is quickly passing. The feasibility study will only have 1 year 
of monitoring instead of the originally designed 2 year monitoring.

    Question 4. Do you have any estimates on the overall cost of 
potential projects along the South Coast?
    Response. At present, given the very limited nature of the current 
information on this project CRMC can only offer the very tentative and 
rough estimate of $10 million to solve several immediate problems (8 to 
10 projects). However, CRMC has recognized the need of the State of 
Rhode Island to have a dredge program independent of the Corps. This 
dredge program would conduct small scale projects without major 
assistance from the Corps and maintain Corps constructed projects such 
as the Salt Pond project, when implemented. CRMC has endeavored to 
acquire a dredge using State funds (as of yet unsuccessful). Federal 
assistance either through the Corps or elsewhere would be most 
expedient and in the long run, it is CRMC's opinion that a State owned 
and operated dredge would be less expensive for both the State of Rhode 
Island and the Federal Government.
    The committee may wish to require this analysis of options for 
future projects. It may be more cost efficient to engage in limited 
equipment purchases, with up front local agreements, rather than 
continued Federal maintenance.

    Question 5. While we await the long-term feasibility study, what 
should be done in the interim to protect the coastline of Rhode Island? 
Do you have sufficient State resources to draw upon to conduct interim 
and long-term solutions?
    Response. As previously mentioned, Rhode Island needs interim beach 
replenishment, navigational dredging, maintenance of breachway settling 
basins and environmental restoration. In the respect that all of these 
issues are inter-connected, a Rhode Island/South County dredge program 
would provide the ability to manage these issues quickly and 
efficiently. Although it is possible, through the pending Rhode Island 
Oil Spill Accident Recovery Bill (OSPAR), that a small dredge could be 
purchased for these purposes, CRMC attempts to date have been 
unsuccessful.
    The State of Rhode Island did provide assistance ($45,000; 50 
percent of material costs) to the Town of South Kingstown for a small 
replenishment project at their severely eroded Town Beach. The State 
was unable or unwilling, however, to spend money along beaches abutting 
private property.
    While nourishment does and will continue to play a vital role in 
beach management and flood damage reduction, we need a concerted 
Federal, State and local research effort at understanding an integrated 
approach to beach management, coastal erosion and flood damage 
reduction.
                                 ______
                                 
 Prepared Statement of Kenneth E. Pringle, Mayor, Borough of Belmar, NJ
    Good morning, Mr. Chairman and members of the committee. My name is 
Ken Pringle, and I have been the Mayor of the Borough of Belmar, New 
Jersey for 8 years. I am pleased to be here to bring my perspective as 
a small town mayor to the Federal shore protection program.
    Belmar is a one-square mile community, with a year round population 
of 5,700 residents. Despite our small size, Belmar ranks each year as 
the most popular tourist destination in Monmouth County, and one of the 
most popular in New Jersey. On an typical Sunday afternoon in the 
Summer, approximately 20,000 people will crowd onto Belmar's beautiful 
beaches, which are a little more than a mile long, and about 150 yards 
wide.
    The Borough of Belmar has been an active partner with the State of 
New Jersey and the Corps of Engineers in the largest shore protection 
program in the United States. This project includes 11 municipalities 
and covers 21 miles of New Jersey's shoreline.
    I am here today to urge continued support for the Federal program 
and to thank the committee for recognizing the importance of this 
investment in our shore communities. I want to note the long-standing 
contributions of Senator Lautenberg to maintaining this investment. He 
has been a tireless champion of our coastal areas and to environmental 
protection.
    Belmar was an early convert to the cause of beach nourishment. 
During the infamous Nor'easter of 1992, Belmar, like the rest of the 
Jersey Shore, was battered by a horrific combination of high winds, 
abnormally high tides, and relentlessly pounding surf. Along the 
southern half-mile of Belmar's coast, which had eroded away to almost 
nothing over the prior years, seven blocks of boardwalk and two 
pavilions were completely destroyed, including three blocks of 
boardwalk that were ``protected'' by a stone seawall. Other towns on 
either side of us, like Spring Lake, Avon and Bradley Beach, were 
devastated by the same storm, and lost their entire boardwalks and 
sustained enormous damage to their beachfront pavilions, at a cost of 
several million dollars in Federal Emergency Management Administration 
funds.
    At Belmar's northern end, however, we sustained very little damage 
to our boardwalk and beachfront buildings. The reason our northern end 
fared so much better than our southern end was that our northern 
beaches were much wider because the Shark River Inlet traps eroding 
sand carried northward by the littoral drift. It became clear to 
everyone that the best defense against ocean storms is not seawalls, 
jetties or other hard structures, but rather wide sloping beaches that 
easily dissipate the incredible force of a storm's waves.
    As a result of what we learned from the Nor'easter of 1992, 
residents of Belmar and other towns from Manasquan to Deal hailed the 
arrival of the Army Corps and two large ocean-going dredges in the 
summer of 1997. That dredging operation, which proceeded around the 
clock for several months, pumped tens of millions of cubic yards of 
sand on our beaches, literally creating beaches before our eyes.
    Despite a series of nor'easters on the New Jersey coast this past 
winter and spring, Belmar's new beaches survived extremely wall, with 
minimal sand loss. More importantly, as a result of the increased width 
of our southern beaches, we were able for the first time to leave in 
place this winter the portable boardwalk sections that we installed 
after the Nor'easter of 1992,\1\ which was a boon to the hundreds of 
runners, walkers and bicyclists who use that boardwalk every winter 
day. The wider beaches have also significantly expanded Belmar's 
capacity for beachgoing tourists. In fact, Belmar's new south end 
beaches were able to be used this past weekend as the site for a large 
amateur volleyball tournament, a prospect that would have been 
unthinkable just a year ago.
---------------------------------------------------------------------------
    \1\ In the aftermath of the Nor'easter of 1992, and with the long-
planned Army Corps beach nourishment project still in the unfunded 
distance, Belmar replaced its destroyed boardwalk area with portable 
boardwalk sections, which are removed each winter. We also installed 
restroom facilities that can be disconnected and towed inland after 
each summer beach season.
---------------------------------------------------------------------------
    As other New Jersey shore communities will attest, the Corps of 
Engineers' projects have time and again proved their resistance to 
devastating storms. Based upon our experience in Belmar over the past 
winter, and what seems to be the increasing frequency of storm activity 
off our coast, it is clear that the Corps of Engineers' project in 
Monmouth County will save millions of dollars in damages over the next 
several years.
    The Clinton Administration has proposed a change in the cost-
sharing formula for periodic nourishment of sandy beaches. Under this 
proposal, non-Federal project sponsors would pay 65 percent, instead of 
the current 35 percent, for periodic nourishment. Because the Borough 
of Belmar will be due in the next few years for its first periodic 
renourishment, I am extremely concerned about the additional financial 
burden this plan will place on us. There is no question that we are 
willing to pay our fair share of the cost of financing shore protection 
projects. However, Mr. Chairman, this local share--whether for initial 
construction or periodic renourishment--should be dependent upon the 
Federal Government holding up its part of the bargain. That means that 
we must be assured of a reliable funding level for these projects. This 
funding level should be based upon a comprehensive assessment of the 
projects around the country that are ready for construction, ready for 
periodic renourishment, and currently in the construction pipeline.
    The Borough of Belmar does its part to maintain a stable, reliable 
source of local funding for the shore protection program. Because we 
are unable to charge a hotel or local sales tax, my community and most 
others along the New Jersey coast fund the cost of our beaches by 
charging an admission fee to residents and non-residents alike. By law, 
this fee can used solely for the cost of operating and improving our 
beaches Obviously, we think it is important that these fees remain 
affordable to families. Belmar's 10 percent share of the most recent 
beach nourishment project is $612,899.79. Thanks to great weather over 
the past two summers, and some forward financial planning, we will be 
making a cash downpayment of $300,000 toward that bill when it comes 
due later this summer, but will need to borrow the balance, and pay it 
off over the next several summers. It is important that the local share 
of future periodic renourishment projects be reasonable, so as not to 
cause the price of beach admission to exceed the reach of the tens of 
thousands of families from New Jersey, New York and Pennsylvania who 
regularly use our beaches.
    Mr. Chairman, shore communities around the country believe that 
beach nourishment projects are in the national interest, not just in 
the State and local interest. Beaches provide a vital, first line of 
defense against storms and flooding. Every dollar of Federal investment 
in shore protection reduces the cost of emergency assistance that would 
otherwise be paid through the Federal Emergency Management 
Administration, and prevents untold losses in private investment, much 
of which is either uninsured or uninsurable. Moreover, the revenues 
from tourism in New Jersey don't go to local governments, which rely 
primarily on property taxes for their revenue. Rather, they go to the 
State and Federal treasuries. The New Jersey shore is a tremendous 
economic engine. In 1996, travel and tourism in New Jersey's five 
coastal counties generated over $12 billion and were responsible for 
161,000 tourism-related jobs, with a payroll of over $3 billion. 
Protection of this industry is a worthwhile Federal investment.
    I want to thank you again for giving me the opportunity to share my 
views with you today. I would be pleased to try to answer any questions 
you may have.
                                 ______
                                 
Prepared Statement of Stephen H. Higgins, Broward County Department of 
                      Natural Resource Protection
      Developing an Enhanced National Shoreline Protection Program
                                summary
    1. Sandy beaches are a critical, integral part of the Nation's 
coastal infrastructure, providing the first line of defense against 
storm waves and forming the basis for the economic vitality of many 
coastal communities, regions and States. We believe that Federal, 
State, and local investments in beach erosion control and in the proper 
management of beaches, inlets, and shorelines are returned many times 
over in revenues generated by tourism and commerce, by tax increases 
inspired by higher property values and incomes, by mitigation of storm 
wave damage to property and infrastructure, and by the elevation of the 
quality of life for coastal residents and visitors.
    2. Sand replenishment has been shown time and time again to be an 
effective method of shore protection based on both engineering and 
fiscal criteria.
    3. The Federal role in shore protection and beach erosion control 
is clearly prescribed by current law, including the Shore Protection 
Act of 1996 (section 227 of the Water Resources Development Act of 
1996).
    4. The Administration's policy, announced in 1995, to terminate 
Federal financial assistance for most new shoreline protection projects 
is already harming America's sandy beaches. Congress has repeatedly 
rejected that policy. However, the Administration has persisted in its 
efforts to enforce its policy.
    5. Contrary to Section 227 of WRDA 1996, the Corps of Engineers is 
not on its own initiative conducting reconnaissance studies of new 
shoreline protection projects. It is not on its own initiative 
conducting feasibility studies of such projects, nor is it recommending 
to Congress the authorization of new shoreline protection projects. 
What work it is doing is either to complete its contractual 
responsibilities with regard to a dwindling number of shoreline 
protection projects or in response to congressional directives to 
proceed with studies. As of this date, there is not one new shoreline 
protection project which is under construction in the Nation using a 
single dollar of Federal funds.
    6. The American Coastal Coalition calls on this subcommittee to 
insist, as part of WRDA 1998, that the White House Office of Management 
and Budget and the Army Corps of Engineers implement the letter and 
spirit of the Shoreline Protection Act of 1996 and the vast body of 
other Federal laws which clearly establish a Federal role and 
responsibility to participate in the repair and maintenance of sandy 
beaches.
    7. While we believe it is appropriate for OMB to initiate 
discussions of enhancements to national shoreline protection policy, 
its first responsibility is to implement existing law and policy as 
established by Congress. If the Administration believes that changes in 
the national shoreline protection program need to be made, it should 
lay its proposals before Congress. Until that time, the bickering on 
this subject between the Administration and Congress must end. It is 
not serving the Administration's professed goal of achieving fiscal 
restraint. And it is not promoting the responsible management of 
America's coastal resources.
    8. While we await any proposals that may be forthcoming from the 
Administration, there are steps that can be taken in WRDA 1998 that 
will make significant improvements in the national shoreline protection 
program.
    A. We urge Congress to direct by statute that shoreline protection 
is one of the Corps' primary missions. Currently, the Corps' shoreline 
protection role is an outgrowth of its storm protection, flood control, 
and environmental restoration missions. Shoreline protection should not 
be a Corps stepchild.
    B. Congress should direct the Corps to conduct its benefit-cost 
analysis of prospective shoreline protection projects by assessing the 
regional and national economic impact of the proposed project. 
Currently, the Corps limits its assessment primarily to an evaluation 
of property that is immediately adjacent to the beach. In no way does 
that limited analysis show (a) whether there is a national interest in 
constructing the project, or (b) what benefits can be expected to flow 
to businesses, jobs, or tax revenues at the regional or national levels 
from constructing a shoreline protection project. This regional 
economic benefit analysis was included in the language of the Shore 
Protection Act as passed by the House in 1996, but it was dropped in 
conference.
    C. We recommend the establishment of a National Shoreline and Shore 
Erosion Data Bank. Several Federal agencies currently collect or have 
the ability to collect data that is vital to the management of our 
coastlines. In addition, data is collected by States, academic 
institutions, and private sector research facilities. To facilitate the 
long-term management of our shorelines, all interests should have 
access to all of the useful data they need to make responsible policy 
determinations. The authorization of a National Shoreline and Shore 
Erosion Data Bank in WRDA 1998 and the funding of that Bank in the 
Energy and Water Development Appropriations Bill for Fiscal 1999 and 
beyond would be a significant step toward pulling together and 
augmenting the available data and establishing a mechanism for its 
maintenance and dissemination.
    D. We call on Congress to authorize a new National Shoreline Study 
to assess the regional and national economic impacts of beaches and to 
take a complete inventory of the condition of the Nation's sandy 
beaches. The last inventory was taken in the late 1960's, and there has 
never been a national assessment of the economic impacts of beaches. 
Without this data, it is impossible for Congress to consider major 
changes in national shoreline protection policy or to budget for the 
Federal share of beach repair and maintenance.
    E. The Federal Government has a statutory and moral responsibility 
to mitigate the damage it has caused to beaches by constructing dams, 
dredging channels, and other similar actions. Language should be 
included in WRDA 1998 which assures that this mitigation responsibility 
can be used as the basis for Federal participation in a shore 
protection project.
    F. One immediate change in policy that we strongly recommend would 
direct the Corps to place beach quality sand dredged from channels on 
adjacent beaches, regardless of whether it is the ``least cost 
option.'' On many occasions, dredged material is disposed in the ocean 
because placement on a nearby public beach is not deemed by the Corps 
to be the ``least cost option.'' Subsequently, taxpayers pay for 
pumping that sand back onto the beach as part of a shore protection 
project. Thus, the ``least cost option'' too often may result in a 
higher cost to taxpayers. We support statutory language in WRDA 1998 
that directs the placement of beach quality sand dredged from a 
navigation project on nearby public beaches unless such disposal is not 
economically and environmentally sound.
    G. In some areas of the country, near-shore sources of sand for 
beach nourishment are becoming scarce. Recognizing this fact, Congress 
adopted legislation making it possible for the Minerals Management 
Service to enter into agreements with the Federal Government as well as 
with non-Federal sponsors of beach nourishment projects to acquire sand 
from the Outer Continental Shelf. While Congress gave MMS the 
discretion to determine if it should charge non-Federal sponsors for 
this sand, the MMS has determined that, as a matter of policy, it will 
impose a charge. This will increase costs to State and local 
governments unnecessarily. Therefore, the American Coastal Coalition 
supports statutory language which removes from MMS the discretion to 
charge any fee for OCS sand to a non-Federal sponsor of a federally 
authorized shore protection project. While this issue is not 
technically within the jurisdiction of this committee, we believe that 
the jurisdictional issue can be overcome.
    H. Among other changes that we recommend for your consideration is 
a requirement that the Corps implement a systems approach to sediment 
management using projects already in the pipeline as well as new 
projects in different parts of the country, and to analyze and report 
to Congress by a date certain on the effectiveness of this approach. 
This can be done in WRDA 1998 with the actual funding of projects 
provided in the Energy and Water Development Appropriations Bills for 
fiscal year 1999 and beyond. The testing of the systems approach to 
sediment management should in no way be used to defer any existing 
shoreline protection projects. In addition, we urge that Congress 
require the Corps to approach shoreline protection and navigation 
projects on a programmatic basis, rather than a project-by-project 
basis. Logic says that a programmatic approach to the planning of these 
two types of projects will provide Congress with the information it 
needs to make better decisions about project funding. That, however, 
may not be the case in all parts of the country. Once again, WRDA 1998 
can be used to direct the Corps to implement a programmatic approach 
and report to Congress by a date certain. We urge this subcommittee to 
make it clear that the implementation of this and any other new 
shoreline protection mandates not be used in any way to defer action on 
existing or new shoreline protection projects.
    Mr. Chairman, thank you for this opportunity to lay before this 
subcommittee some of the most pressing shore protection policy issues. 
We hope that your efforts will bring a swift end to the impasse between 
Congress and the Administration so that the Nation's coastal and fiscal 
resources will be better managed. I ask your permission to include our 
full statement in the hearing record.
                              introduction
    The American Coastal Coalition is the rapidly growing voice of U.S. 
coastal communities at the Federal level of government. Established 
nearly 3 years ago, our membership consists of local governments, local 
government officials, business people, property owners, and others who 
live or work in America's coastal communities. We appreciate this 
opportunity to appear today. While our organization focuses on several 
key areas of Federal policy, my testimony today will focus on national 
shoreline protection policy.
    The American Coastal Coalition affirms that America's beaches are a 
critical, integral part of the Nation's coastal infrastructure, 
providing the first line of defense against storm waves and forming the 
basis for the economic vitality of many coastal communities, regions 
and States. We believe that Federal, State, and local investments in 
beach erosion control and in the proper management of beaches, inlets, 
and shorelines are returned many times over in revenues generated by 
tourism and commerce, by tax increases inspired by higher property 
values and incomes, by mitigation of storm wave damage to property and 
infrastructure, and by the elevation of the quality of life for coastal 
residents and visitors. Recent studies and surveys have documented the 
economic value of beaches to specific local communities, regions, and 
States, and while such studies are just beginning to be undertaken on a 
national level, it is intuitively obvious that thriving local, 
regional, and State coastal economies are necessary factors in a 
healthy national economy.
    We firmly believe that beach nourishment is an effective method of 
shore protection based on engineering and fiscal criteria. By beach 
nourishment, we refer to sand placement or sand replenishment. The 
American Coastal Coalition believes that the Federal role in shore 
protection and beach erosion control is clearly prescribed by current 
law, including the Shore Protection Act of 1996 (section 227 of the 
Water Resources Development Act of 1996). Efforts to substantially 
reduce and eventually eliminate this role are clearly 
counterproductive. We believe that while historical Federal activities 
in this arena have been successful in terms of benefits and costs, 
current fiscal constraints as well as coastal engineering advances over 
the past quarter century mandate the development of an enhanced 
shoreline protection program based on policy clarity, 
comprehensiveness, economic efficiency, and technical effectiveness.
    Furthermore, we believe the Federal Government must participate in 
the management of the Nation's sandy shoreline. This includes a strong 
fiscal commitment to sharing the costs of construction and periodic 
maintenance of beach nourishment projects with States and/or local 
governments. We believe this fiscal commitment can be fulfilled without 
significantly increasing Federal expenditure levels beyond those of 
recent years.
    Recently, the White House Office of Management and Budget held a 
meeting attended by coastal residents, government officials, engineers, 
and economists to discuss shoreline protection policy. While we welcome 
this discussion and hope that it will produce concrete proposals during 
this session of Congress, we are deeply concerned that it comes after 3 
years of efforts to eliminate Federal participation in beach 
nourishment projects. Prior to the initiation of those efforts, the 
Federal-State-local government partnership in beach nourishment had 
functioned as an outstanding example of inter-governmental cooperation 
to protect a vital part of the Nation's infrastructure. The past 3 
years, however, have seen ever decreasing requests by the 
Administration for the funding of this program. In fact, the agreement 
to establish a Working Group to discuss shoreline protection policy 
came only days after an Administration fiscal year 1999 budget request 
of less than a fourth of the level appropriated by Congress for shore 
protection in fiscal year 1998.
    Based on the actions of the Administration over the past 3 years, 
the American Coastal Coalition will continue to work with Congress to 
enact changes in law during the current congressional session which 
will improve the effectiveness and fiscal responsibility of the 
national shore protection program. We seek the support of the 
Administration for these changes, which are based on the fundamental 
concept of strong Federal participation in the repair and maintenance 
of those sandy beaches that meet the standards for Federal 
participation established by law.
    The American Coastal Coalition believes that the first 
responsibility of national shore protection policy must be to mitigate 
the harm to sandy beaches which has been caused by actions of the 
Federal Government. We believe that, wherever such harm has been 
caused, the Federal Government has a statutory responsibility to 
undertake any and all reasonable actions necessary to repair the beach 
erosion it has caused and to undertake additional steps to take 
effective action that will mitigate future damages, as well.
    Not every sandy beach is an appropriate candidate for beach 
nourishment. For the large number which are, there must be an 
understanding and acceptance of the fact that beach nourishment has as 
its objective the reconstruction of a beach so that the net loss of 
sand caused by wave action and storms--and in many cases exacerbated by 
the existence of inlets and other forms of human intervention--is 
slowed to a minimum.
    So long as we look at each ``beach project'' in a microcosm, we 
lose sight of the fact that it is part of a natural sand system that, 
in many cases, has been altered by human intervention. The existence of 
an inlet, for example, will naturally trap sand upward of the inlet, 
causing an accretion of sand, while starving the downward beach of 
sand. Beach nourishment can slow the net loss of sand on the downward 
portion of the beach, but it is highly unlikely to make that downward 
beach totally self-sustaining. Future periodic renourishment--meaning 
placing sand from an accreting region on all or part of the sand-
starved portion of the beach--is an integral part of the beach 
nourishment process. It is by no means a sign of the failure of beach 
nourishment, but rather is a necessary and acceptable maintenance of 
critical infrastructure.
    The American Coastal Coalition is greatly concerned about the 
potential for loss of lives and coastal property due to storms waves 
and surge. We believe that as a matter of general policy, healthy 
beaches with stable dunes afford the most effective and environmentally 
sound approach to protecting life and property while at the same time 
protecting and enhancing the economic and environmental interests of 
the region and the Nation.
    Withdrawing from our coastlines is an unacceptable alternative to 
beach nourishment. The history of mankind is replete with evidence that 
people are drawn to coastlines for both economic and recreational 
reasons. Unless the coasts are cordoned off with barbed wire, that 
attraction will continue. Hindsight shows that some areas of the 
coastline are less conducive to the recreational and/or economic 
presence of human beings than others. That is equally true of the 
significant development which has taken place in riverine areas of the 
Nation. Using the combined tools of effective shoreline protection and 
hazard mitigation, the costs of maintaining these coastal regions and 
reducing the losses resulting from natural disasters can be 
substantially reduced. ``Retreat'' from highly developed coastlines, 
busy recreational beaches, or urbanized shorefronts is not an option.
    We are opposed to over-development of coastal areas, and we believe 
that it is often appropriate for governmental policies to discourage or 
prohibit the development of pristine, undeveloped regions of the 
coastline. However, the only situations in which ``retreat'' is 
appropriate are those where the local community has decided to take 
that course. Federal policies should neither dictate retreat or make 
retreat necessary by withholding appropriate assistance (i.e., beach 
nourishment) from those regions which have been determined to meet 
accepted engineering and economic criteria for erosion control, and 
which are willing to share the costs and responsibilities of beach 
management with the Federal Government.
    To achieve the level of funding for the study and construction of 
projects currently in the pipeline as well as to fund some or all of 
the initiatives discussed below, the American Coastal Coalition 
believes that the Congressional Budget Resolution must include an 
adequate amount for ``Function 300'' (which includes, but is not 
limited, to the Corps civil works program) and which includes report 
language which states that the Budget Committees place a priority on 
the full range of water projects that are included within this budget 
function.
    immediate initiatives to improve the management of the nation's 
                             sandy beaches
    Knowing that significant changes in the national shoreline 
protection program must be implemented with caution over time, we 
nevertheless believe that a limited number of policy changes should be 
implemented during the current congressional session. Each of these 
will assist in the planning, implementation, and management of an 
enhanced Federal shoreline protection program, regardless of the 
specific elements of that program.
    These initiatives include:
    1. Establishment of a National Shoreline and Shore Erosion Data 
Bank. Several Federal agencies currently collect or have the ability to 
collect data that is vital to the management of our coastlines. In 
addition, data is collected by States, academic institutions, and 
private sector research facilities. To facilitate the long-term 
management of our shorelines, all interests should have access to all 
of the useful data they need to make responsible policy determinations. 
The authorization of a National Shoreline and Shore Erosion Data Bank 
in WRDA 1998 and the funding of that Bank in the Energy and Water 
Development Appropriations Bill for Fiscal 1999 and beyond would be a 
significant step toward pulling together and augmenting the available 
data and establishing a mechanism for its maintenance and 
dissemination.
    2. Study of the Regional and National Economic Impacts of Beaches. 
Numerous studies on the local, county and State levels have shown the 
positive effect on regional economies and on the national economy, as 
well. What is needed is a nationwide study using uniform economic 
criteria that will reveal the magnitude and geographical dispersion of 
that benefit. Such a study must be authorized in WRDA 1998 and funded 
in the Energy and Water Development Appropriations Bill for Fiscal 1999 
and beyond.
    3. Strengthening National Policy to Mandate Shore Protection as a 
Corps Responsibility. It is the intent of section 227 of the Water 
Resources Development Act of 1996 (known as the Shore Protection Act) 
to make shore protection one of the primary missions of the Corps of 
Engineers. However, given the fact that the Corps has not interpreted 
this statutory language as creating such a mission, language must be 
included in WRDA 1998 which will accomplish this significant goal. 
Shore protection must no longer be considered ancillary to any of the 
Corps' other missions.
    4. Strengthening National Policy on Mitigation as a Basis for 
Undertaking Shore Protection Projects. As stated above, the Federal 
Government has a responsibility to mitigate the damage it has caused to 
beaches by constructing dams, dredging channels, and other similar 
actions. Language must be included in WRDA 1998 which assures that this 
mitigation responsibility can be used as the basis for Federal 
participation in shore protection projects.
    5. Examine the Feasibility of a Systems Approach to Sediment 
Management. We must require the Corps to implement a systems approach 
to sediment management using projects already in the pipeline as well 
as new projects in different parts of the country, and to analyze and 
report to Congress by a date certain on the effectiveness of this 
approach. This can be done in WRDA 1998 with the actual funding of 
projects provided in the Energy and Water Development Appropriations 
Bills for fiscal year 1999 and beyond. The testing of the systems 
approach to sediment management should in no way be used to defer any 
existing shoreline protection projects.
    6. Examine the Feasibility of a Programmatic Approach to Funding 
Shoreline Protection. This is the logical complement to a systems 
approach to sediment management and the Data Bank, as well. If we 
approach shoreline protection and navigation projects on a programmatic 
basis--rather than a project-by-project basis--logic says that it will 
provide Congress with the information it needs to make better decisions 
about project funding. That, however, may not be the case in all parts 
of the country. Once again, WRDA 1998 can be used to direct the Corps 
to implement a programmatic approach and report to Congress by a date 
certain. Here, too, this mandate should not be used in any way to defer 
action on existing or new shoreline protection projects.
    7. Increase Funding for Coastal Research and Development. Federal 
financial support for R&D efforts must be increased so that we can 
acquire the data needed to enable both the Federal Government and State 
governments to more effectively plan for and manage shore protection 
projects. Therefore, we support increased funding for the R&D efforts 
under the Corps' Coastal Engineering Research Center.
    8. Fund the Shoreline Demonstration Program. A demonstration 
program to test alternative shoreline protection technologies in 
different parts of the country was authorized by WRDA 1996 for a total 
of $18 million over 3 years. So far, no money has been appropriated for 
this program. We urge funding this program at a level of $6 million 
annually for Fiscal 1999, 2000, and 2001. It has been several years 
since the Federal Government funded such a demonstration program. 
During that time, coastal engineers and scientists have learned a great 
deal. That knowledge should be field-tested to see what works and under 
what conditions, if any, does it work.
    9. Beneficial Uses of Dredged Material. One immediate change in 
policy would direct the Corps to place beach quality sand dredged from 
channels on adjacent beaches, regardless of whether it was the ``least-
cost option.'' On many occasions, dredged material is disposed in the 
ocean because placement on a nearby public beach is not deemed by the 
Corps to be the ``least-cost option.'' Subsequently, taxpayers pay for 
pumping that sand back onto the beach as part of a shore protection 
project. Thus, the ``least-cost option'' too often may result in a 
higher cost to taxpayers. We support statutory language in WRDA 1998 
that directs the placement of beach quality sand dredged from a 
navigation project on nearby public beaches unless such disposal is not 
economically and environmentally sound.
    10. Non-Federal Sponsors Should Not be Charged for Using OCS Sand. 
In some areas of the country, near-shore sources of sand for beach 
nourishment are becoming scarce. Recognizing this fact, Congress 
adopted legislation making it possible for the Minerals Management 
Service to enter into agreements with the Federal Government as well as 
with non-Federal sponsors of beach nourishment projects to acquire sand 
from the Outer Continental Shelf. While Congress gave MMS the 
discretion to determine if it should charge non-Federal sponsors for 
this sand, the MMS has determined that, as a matter of policy, it will 
impose a charge. This will increase costs to State and local 
governments unnecessarily. Therefore, the American Coastal Coalition 
supports statutory language which removes from MMS the discretion to 
charge any fee for OCS sand to a non-Federal sponsor of a federally 
authorized shore protection project.
                        longer-term initiatives
    The American Coastal Coalition supports an enhanced national 
shoreline protection policy which is based on a strong Federal 
partnership with States and local governments in rebuilding and 
maintaining public sandy beaches. We believe that the annual Federal 
investment in this part of our coastal infrastructure can remain in the 
very modest range of $100 million to $150 million well into the next 
century.
    We believe that the current balance of the Federal-State-local 
partnership should be modified to give a stronger role to States and 
local governments in the management and implementation of shoreline 
protection policies, and that State and local interests should assume 
an increased responsibility for sharing the monetary and non-monetary 
costs of such management. Equally, we believe that the current Federal 
process of selecting which beaches are suitable for Federal shore 
protection assistance and of implementing that assistance must also be 
enhanced in a manner which establishes clearer and more rational 
participation criteria, increases the effectiveness of shoreline 
protection projects, achieves regional goals, and reduces costs.
    Toward these ends, we believe that the Federal Government should 
share with State and local governments the costs of both constructing 
and maintaining beach nourishment projects. The issues of (a) the 
proportion of the cost-share borne by the Federal Government, (b) the 
method used to determine the economic benefits of a proposed shore 
protection project, and (c) the statutory life of a project should be 
discussed in light of both the availability of Federal funds and the 
need to increase the role and responsibilities of the non-Federal 
sponsors of such projects. Furthermore, we believe that consideration 
should be given to increasing the reliance placed on State and local 
governments as well as the private sector in conducting studies and 
construction of beach nourishment projects.
    The American Coastal Coalition believes the discussion of these and 
other aspects of national shoreline protection policy should take place 
only in an environment where there is a clear commitment on the part of 
the Administration to a strong Federal role in the repair and 
maintenance of the Nation's sandy beaches.
    We are hopeful that current discussions involving Congress, the 
Administration, and the private sector will produce legislative 
proposals that will address both the rebalancing of the partnership and 
the project selection and management process. We ask those charged with 
making government policy to make changes in the current Federal shore 
protection program carefully and deliberately, relying on an analysis 
of project-and process-related data to determine which changes are most 
likely to be effective. This emphasis on prudence should not be 
misinterpreted as providing a basis to slow, cease, or prevent action 
on the study, authorization, funding, or construction of any shore 
protection project.
    Thank you for this opportunity to present our views to this 
subcommittee today.
                                 ______
                                 
        Prepared Statement of Louisa Strayhorn, Council Member, 
                           Virginia Beach, VA
    Good morning Mr. Chairman and Senators. My name is Louisa 
Strayhorn, and I am a City Councilwoman for the city of Virginia Beach, 
representing the Kempsville Borough. I appreciate this opportunity to 
testify before the committee about the City's past and ongoing work 
with the U.S. Army Corps of Engineers for our numerous beach and 
navigation projects.
    As you probably know, Virginia Beach is a beautiful resort city 
located only a few hours drive from the Nation's capitol, and it is the 
largest City in the Commonwealth. Having served on the City Council for 
the past 4 years, I know first-hand how the well-being of our beaches 
is crucial to the City's economy. The City has over 6 miles of 
commercial beach front which is critical to the livelihood of many 
Virginia Beach residents and the City's financial health since tourism 
is our largest employer. Over two million out-of-town visitors arrived 
in Virginia Beach last year. These visitors spent approximately $500 
million in the City and directly created about 11,000 jobs.
    In addition to our visitors, the second biggest employer for 
Virginia Beach is the U.S. Navy as the Naval Air Station (NAS) Oceana 
supports the largest naval complex in the free world. After three 
rounds of Base Realignment and Closure (BRAC), expansion of this 
megaport continues with an increase of as many as 6,000 sailors and 
family members in the next year with the F/A 18 transfer from Cecil 
Field to Oceana. Our City's economic health directly impacts the 
quality of life enjoyed by the thousands of Naval personnel in Virginia 
Beach.
    Therefore, because of these many varying factors which constitute 
the City: the size of our population (nearly 400,000), our location on 
the Atlantic Ocean and Chesapeake Bay, and our dependence on tourism as 
the largest segment of our economy, the Virginia Beach City Council has 
a particular interest and directive to protect our beaches and 
navigable waterways.
    Sandy beaches are a integral part of the City coastal 
infrastructure and provide the first line of defense against storm 
waves and form the
    basis for our continued economic vitality. For the past 25 years, 
the City, in conjunction with the Corps, has been working to finish the 
region's highest priority, the Virginia Beach Erosion Control and 
Hurricane Protection Project. This project protects and enhances six 
miles of commercial and residential beach front, consisting of over $1 
billion in flood insured development, against a direct hit from a 
hurricane. The project protects hundreds of millions of dollars of City 
infrastructure, our tourism industry and more than a thousand of 
commercial and residential properties along the shore.
    Study on this program as a Federal project began in the 1960's, and 
after long anticipation the project was authorized by Congress for 
construction in the 1986 Water Resources Development Act. Actual 
construction began in fiscal year 1996, and depending on appropriations 
levels, initial construction will be completed in 2001. A vast 
improvement in protection from storm events, the area protected by the 
project will be saved from average annual flooding damages estimated at 
over $13 million during the project's 50-year life.
    The project scope required phasing of the work to match funding 
levels and comply with procurement policies. The recent policy change 
to prohibit ``continuing contracts,'' coupled with the reductions in 
Civil Works appropriations, has slowed progress and complicated the 
sequencing of the work. However, in May the rules changed again to re-
allow continuing contracts, and with continued support for this project 
by the appropriators it appears that we are back on track for a 2001 
completion of construction.
    Most projects of this scope and size authorized by this Congress 
require multi-year and phased contracting for construction to match and 
track with appropriations levels. Last year's change and subsequent 
reversal in the ``continuing contract'' policy severely impacted many 
projects throughout the country. I believe it may be appropriate for 
your committee to consider language in this year's WRDA to clarify and 
resolve the issue.
    Another issue facing this committee as you prepare the WRDA is the 
Administration's proposed revision in cost-sharing for beach 
replenishment. Once construction of this Beach Erosion Control and 
Hurricane Protection project is complete, the authorization includes 
the periodic renourishment of the project beach for a 50-year period. 
The very basis for the project's performance estimates is founded in 
the premise that the beach and seawall or dunes will act together to 
provide the protection benefits--the beach must be maintained.
    Though not specifically addressed in the draft language supplied by 
the Administration, the application of revised cost-sharing must not 
affect on-going or existing projects. We have based our participation 
in this project, and agreed to maintain the constructed project, with 
the belief that the cost-sharing formulation in the 1986 Water 
Resources Development Act, and subsequently in our Project Cooperation 
Agreement, would remain at the authorized level of 65 percent Federal 
and 35 percent local. The Administration has proposed to change the 
beach replenishment portion of these projects to 35 percent Federal and 
65 percent local. While the merits of revision could be argued, any 
application of new cost-sharing levels must be limited to new 
authorities and I urge you to specifically address this issue as you 
move forward with the WRDA.
    If the Administration's new cost-sharing formula were applied to 
our existing project, the cost to the City of Virginia Beach, over and 
above the amount specified in our Project Cooperation Agreement, would 
escalate by more than $40 million. As a member of City Council when the 
Council authorized our City Manager to enter into the agreement with 
the Corps of Engineers, I can tell you first hand that the City Council 
would feel betrayed if the rules were changed in the middle of the 
project and our cost share increased as a result by over $40 million.
    Our discussions with Administration officials indicate that their 
intention was to exclude existing projects and authorities from the 
proposed revision. We are comforted by this response, but given the 
seriousness of the issue, we feel it is necessary for you to consider 
specific
    language in this year's WRDA to clarify and resolve the issue that 
existing projects would not be subject to any new cost-sharing 
formulas.
    As you consider this issue, please keep in mind the merits of these 
types of projects and the methodology used to judge these merits--
strict interpretation of National Economic Development policies. Flood 
damage reduction to the businesses and residences insured under the 
National Flood Insurance Program is the primary benefit calculated in 
the authorization documents. An annualized benefit of over $13 million 
in these flood damage reductions justifies the $10 million annualized 
costs for the project. Under the current authority and policy, the city 
of Virginia Beach pays for 35 percent of these costs though the 
benefits for this national program are entirely Federal.
    Granted, the project provides benefits far beyond those calculated 
in the National Economic Development methodology; chiefly, preservation 
of our City's tax base and the underpinning of our $500 million portion 
of one of the Nation's largest industries--tourism. The 11,000 jobs 
supported by our tourism industry, and the spin-off economics of those 
jobs, clearly enhance the merits of the project far beyond flood 
protection benefits. These benefits and others should be included in 
project formulation to allow full review of the merits of these 
projects.
    With this in mind, I would ask this committee to consider the 
broader range of Federal benefits derived from Beach Erosion Control 
and Hurricane Protection projects in its deliberations on any proposed 
revisions to the 1986 Water Resources Development Act cost-sharing 
formulation for beach replenishment. Prior to 1986, beach replenishment 
was authorized at 50 percent Federal and 50 percent local. Owing to the 
multitude of benefits derived from such projects, this committee 
changed the cost-sharing formulation to 65 percent Federal and 35 
percent local in 1986. If changes are deemed appropriate at this point, 
I would urge you to reject the Administration's proposal and consider a 
cost-share formulation that reverts to no less than the pre-1986 levels 
in consideration of both flood damage reduction benefits and the vital 
economic contributions that the Nations' beach tourism industry 
generate.
    Another Water Resource Development issue for our City relates to 
the Sandbridge Beach Erosion Control and Hurricane Protection Project 
which was authorized in the 1992 Act. Sandbridge is our southernmost 
beach community, the beach there has all but vanished through years of 
erosion and storm activity and damage to public and private 
infrastructure which occurs increasingly each year.
    Three years after authorization, in 1995, the Administration, 
without notice or warning, arbitrarily terminated new construction 
starts for this class of projects. Our community relied on this 
authorization to move ahead with a special tax district to raise funds 
for the local cost-share and take other steps to protect public and 
private property from storm damage while we awaited construction of the 
project. The authority to construct this project was based on the same 
National Economic Development criteria as the Virginia Beach project--
the benefits which outweigh the costs were tabulated solely on flood 
damage reduction to the 1,500 or so insured properties in the 
Sandbridge community.
    Lacking a Federal appropriation and support from the Administration 
to construct this project, and in response to the devastation of the 
community from erosion, the city of Virginia Beach has fully funded the 
initial construction of this project. The City Council appropriated 
$8.1 million in fiscal 1998 for a 100 percent locally funded emergency 
beach restoration project at Sandbridge. I am pleased to report that 
construction is now underway of this vital project as authorized by 
your Congress, though the continued authorized renourishment cannot be 
programmed without Federal support, it is simply beyond our means as a 
city to fully implement the authorized project.
    While we anxiously await support from the Administration to 
implement this project, an issue developed during the emergency beach 
restoration phase which may be of interest as you consider the WRDA. 
The amended Outer Continental Shelf Lands Act authorized the Department 
of the Interior to assess fees for the extraction of minerals from the 
continental shelf. The program is managed by the Mineral Management 
Service, who in late 1997 finalized their policies regarding fee 
assessment. In short, their policy would exempt federally funded beach 
replenishment projects from fees for sand minerals mined from the shelf 
for such projects. However, locally funded beach replenishment projects 
are not exempt, regardless of Federal authorization.
    As a result of this recent policy development, the City of Virginia 
Beach was assessed a Federal fee for mining the sand used to construct 
the Federal project at Sandbridge solely because the Federal Government 
did not contribute to the cost of construction. This was the first such 
assessment anywhere in the Nation, and we find it objectionable, 
outrageous, and bad public policy. The purpose for establishing fees 
for mineral extraction from the continental shelf was to assure that 
the citizens were compensated for allowing the use of public resources 
by profit seeking endeavors. Clearly Congress did not intend for the 
Department of the Interior to assess fees to local governments who 
would use the mineral for a purely public purpose--flood protection.
    In our case, a fee of $0.18 per cubic yard was assessed, and we 
were compelled to enter into a lease agreement with MMS before our 
emergency beach erosion project could go forward. Including this fee in 
our project finances limited us to contracting for only 1,100,000 cubic 
yards of sand, paying the Department of Interior $198,000 in mineral 
fees to construct the Federal project. In this time when the 
Administration is proposing to rely more heavily on local sponsors for 
the funding and execution of Federal flood protection projects, clearly 
the counter productive nature of assessing these fees to local sponsors 
should be eliminated. I urge you to consider language for the WRDA that 
would prohibit the Interior Department from applying its authority 
under the Outer Continental Shelf Lands Act for any project authorized 
by the WRDA.
    In that the City of Virginia Beach is the only locality in the 
country to have ever been compelled to pay the mining fee, directive 
language for reimbursement of the $198,000 would be greatly appreciated 
if the committee agrees that the fees should not be assessed to 
localities.
    In conclusion, I would like to highlight the following points and 
recommendations to the committee:
    First, I urge the committee to clarify in its Bill that any 
revisions to the cost-sharing formulation for beach replenishment only 
apply to projects not yet authorized or constructed.
    Second, I urge the committee to identify in its Bill the 
contracting methods by which the Army Corps of Engineers will execute 
authorized projects to facilitate good planning and avoid the pitfalls 
of midstream policy changes.
    I would also urge the committee to review all of the merits and 
benefits of the Federal beach replenishment program and strive to reach 
a compromise to the cost-sharing formula reversal proposed by the 
Administration.
    Finally, in our view the Department of the Interior has overstepped 
its authority by assessing fees to local governments for mining beach 
replenishment sand in the furtherance of projects authorized by this 
committee.
    Mr. Chairman, I want to thank you again for the opportunity to 
speak with you today on these issues of extreme importance to the 
nearly 400,000 citizens of the City of Virginia Beach. The work of this 
committee has had a very positive affect on our community through 
nearly 50 years of continuous beach replenishment and now with the 
construction of the new Beach Erosion Control and Hurricane Protection 
project at our resort area.
                                 ______
                                 
 Statement of John Koeper, Executive Director, Metropolitan St. Louis 
                             Sewer District
    Thank you for the opportunity to submit testimony to the Senate 
Committee on Environment and Public Works in support of a demonstration 
project proposed by Metropolitan St. Louis Sewer District (District) 
and the U.S. Army Corps of Engineers (Corps) to study methods of 
capturing and removing floatables released into our Nation's waterways 
during combined sewer overflow (CSO) events. This valuable project will 
provide cities situated on high-volume rivers throughout the Nation 
with important information on how to best improve the water quality and 
aesthetics of their rivers by removal of these objects. We ask that 
authorization for this project be included in the Water Resources 
Development Act of 1998.
    As you know, combined sewers are pipes which carry wastewater 
(sewage) as well as stormwater runoff during rain events or snow melts 
in the same structure. The majority of these sewers were built prior to 
1940. The flows in the combined sewers are generally discharged 
directly into rivers, lakes, or oceans without any type of treatment 
during wet weather events and sometimes during high river stages. Many 
communities are exploring ways to contain these releases. However, 
there is little full-scale data available to evaluate techniques 
suitable for systems that discharge into major rivers with high flow 
volumes and extreme variance in water levels. This project, conducted 
at three different outflow locations in the city of St. Louis along the 
Mississippi River and one of its tributaries, would allow equipment 
manufacturers and suppliers to install their containment equipment and 
demonstrate its effectiveness under large flows with heavy debris and 
unreliable river levels. Such equipment could include simple water 
baffles, screens, racks, brooms, skimmer vessels, mechanically cleaned 
screens and swirl concentrators.
    The demonstration and operating data derived from this project will 
provide invaluable water pollution control information to agencies 
throughout the country and especially to those communities located 
along major rivers with CSOs. With communities facing the prospect of 
spending millions of dollars on controlling floatables and solids from 
CSOs, the information gained from the demonstration project can lead to 
development of an effective solution at a reasonable cost.
    The estimated cost of developing, implementing and analyzing the 
data collected during the demonstration is approximately $2.5 million. 
These funds will be expended during the 3 years it is expected to 
complete the demonstration. The extended period of time is needed to 
ensure that enough wet weather (rain) events occur so that significant 
data can be gathered on the various combined sewer techniques being 
used. We ask that you include an authorization of $1.7 million for this 
project in the Water Resources Development Act of 1998, and have 
enclosed proposed legislative language for your review. The remaining 
$0.8 million of the project costs will be provided by the Metropolitan 
St. Louis Sewer District.
    Thank you again for the opportunity to submit this statement and 
for your consideration of the funding that the District needs to 
conduct this study. Our Nation's rivers are a precious environmental 
resource, and we are committed to finding new ways to improve their 
health and appearance. We thank you for your attention and ask for your 
support of this worthy project.
                                 ______
                                 
 Metropolitan St. Louis Sewer District Combined Sewer Overflow Project
Add as a new section:

SEC. ____. STUDY OF REMOVAL OF FLOATABLES FROM COMBINED SEWER OVERFLOWS 
                    IN ST. LOUIS, MISSOURI.

    The Secretary, in consultation with the Metropolitan St. Louis 
Sewer District, shall construct a demonstration project to evaluate 
various methods for capturing and removing floatables released during 
combined sewer overflow events and shall provide an analysis of the 
efficacy of the various removal methods. There is authorized to be 
appropriated $1.7 million to carry out this paragraph.
                                 ______
                                 
 Statement of Henry Dean, Chairman, Interstate Council on Water Policy
                             i. background
    The Interstate Council on Water Policy (ICWP) represents State, 
interstate, intrastate, and regional water agencies; academic 
institutions; professional and business firms; and individuals 
committed to the conservation, use, development and wise management of 
water. Established in 1959, ICWP is the national voice for water-
related interests both on quantity and quality issues.
    ICWP's membership includes State and local agencies who are project 
sponsors with the Corps of Engineers.
    ICWP urges Congress to renew the Water Resources Development Act 
(WRDA) this year, in keeping with the 2-year schedule followed 
subsequent to WRDA 86. The Council feels that this is a critical piece 
of legislation to its members and to the Nation's water resources as a 
whole.
                            ii. cost sharing
    ICWP continues to support the philosophy of cost-sharing as 
expressed in the WRDA 1986 as a means of achieving a full and equitable 
partnership in the planning and construction of water resources 
development projects.
    ICWP urges that the current cost-sharing proportions for federally 
partnered projects remain at their current levels. Since the enactment 
of WRDA 1986, flood control project sponsors and others have already 
taken on substantially more of the costs of such projects due to the 
last formula change from the initial 75/25 ratio enacted under WRDA 86 
to the current 65/35 ratio. The Council's policy notes that some 
projects should be funded at higher Federal proportions (up to 100 
percent), such as environmental restoration which is still at a 75/25 
cost share. Projects which are primarily of a Federal interest should 
be funded at 100 percent. ICWP feels that if the formula is modified 
again to shift more of the burden to the project sponsor, many critical 
projects in this country will not be undertaken.
    The Council supports the tacit recognition of in-kind services as 
part of the non-Federal cost share. This should also extend into the 
study area, including those mentioned under the new Flood Hazard 
Mitigation and Riverine Ecosystem Restoration program outlined under 
Section 4.
    ICWP is pleased to see that the Administration has not proposed any 
further changes in the current cost sharing formula for flood control 
projects, but urges Congress not to reduce the Federal cost-share for 
shore protection projects. Although the Administration has indicated 
that they are proposing to keep the current Federal cost-share for 
construction of new shore protection projects, they are proposing to 
reduce the Federal cost-share for long-term periodic nourishment of 
beaches to make more funds available for construction of new shore 
protection projects. ICWP feels that Congress and the Federal 
Government should be committed to both of these efforts.
    ICWP believes that cost-sharing policies should be consistent among 
alternative means of achieving the same purpose. In this regard, ICWP 
endorses uniformity in cost sharing for both structural and 
nonstructural alternatives to a problem. It is ICWP's position that 
cost-sharing policies should be consistent among Federal agencies for 
like project purposes.
                  iii. master schedule of new projects
    ICWP urges Congress to direct the Administration to work with 
Congress to develop a master schedule of new projects to bring on line 
in the future.
        iv. storage cost recovery and repayment on reallocation
    Federal reservoirs are a national asset, not a profit opportunity 
for the Federal Government. Federal policy should be based on obtaining 
repayment of those project costs where repayment is required by law. 
Beyond this point, reservoirs should be managed to meet the Nation's 
water priorities, rather than to maximize Federal revenues.
    When storage is reallocated to water supply storage at a Federal 
reservoir, non-Federal interests should pay the proportionate share of 
the project's original cost plus interest as provided by the Water 
Supply Act of 1958, as amended. In cases where where water storage 
space is reallocated from a vendible purpose, the non-Federal 
participant should also pay the cost of any project facilities no 
longer usable as a result of the allocation, less the portion of these 
costs already paid for by revenues received where the storage was used 
by a Federal licensee or contract holder possessing a valid water right 
under applicable State law. Payment shall included the value of any 
compensation or credit which must be provided by the Federal Government 
for such rights. When a reallocation for water supply requires 
modification or rehabilitation of the project, the beneficiary should 
pay this cost. Water supply users should also pay a proportionate share 
of project operation and maintenance costs after reallocation. The 
total of these payments should compensate the Federal Government for 
the change in project purposes.
    In considering reallocation of storage space at Federal reservoirs, 
Federal agencies should strictly respect State water law and State 
water management responsibilities and to consult all affected States, 
as well as following applicable State laws on water rights and water 
quality.
                     v. prepayment of storage cost
    Many contracts for repayment of water supply costs at Federal 
reservoirs constructed and managed by the Corps of Engineers provide 
for comparatively low interest rates for outstanding payments, thereby 
creating a negative cash-flow for the Federal Government when 
considering higher Federal borrowing rates. Additionally, accumulating 
interest on future use storage may increase the costs of that portion 
of the storage beyond the financial capabilities of contracting 
entities when use of such storage is needed, requiring those entities 
to find alternative supplies and resulting in no cost recovery by the 
Federal Government. Furthermore, ongoing operation and maintenance 
costs attributable to future use storage in such Federal reservoirs 
would continue to be borne by the Federal Government.
    The Federal Government should require the Corps of Engineers to 
accept prepayment of storage costs in amounts that consider not only 
the present value of the outstanding balance of such costs, but also 
the risk that future use storage and operation and maintenance costs 
will not be recovered.
                vi. one-year study of mitigation banking
    ICWP urges that authorization be included in WRDA 1998 for for the 
U.S. Army Corps of Engineers to carry out a 1-year study of mitigation 
banking in States with experience in authorizing and using mitigation 
banks. The goal of the study should be to determine the prospects and 
problems associated with mitigation banking. The study should also 
focus on whether any Federal legislation is needed and what provisions 
need to be included as part of such legislation. ICWP wants to make it 
clear that although the association considers this study essential, 
authorization of the study should not be construed to preclude the 
consideration of other Federal legislation on mitigation banking.
    It is ICWP's position that use of a mitigation bank is appropriate 
as compensatory mitigation for wetland impacts when the sequencing, 
avoidance, and minimization requirements have been met and the bank 
offsets the wetlands functions lost at the impact project site. 
However, mitigation banking should be just one of the tools available 
to provide compensatory mitigation, and should not become the sole 
mitigation option.
                   vii. small flood control projects
    ICWP supports the Administration's proposal to allow nonstructural 
projects to be covered under Section 205 of the Flood Control Act of 
1948 as amended (33 U.S.C. 701s).
   viii. cooperative agreements for natural resources, environmental 
            protection, conservation and recreation measures
    ICWP supports the authorization for the Department of the Army to 
enter into cooperative agreements with non-Federal public bodies and 
non-profit entities to facilitate collaborative efforts involving 
environmental protection and restoration, natural resources, 
conservation, and recreation in connection with the development, 
operation and management of water resources projects under the 
jurisdiction of the Department of the Army. The Council supports 
Sections 9, 10 and 11 of the Administration's 1998 WRDA proposal.
     ix. state contributions in environmental restoration projects
    ICWP supports Section 12 of the Administration's proposal to allow 
State contributions to be used in environmental restoration projects as 
well as flood control projects.
             x. establishment of water resources foundation
    ICWP questions the need to create the Water Resources Foundation 
proposed by the Administration under Section 16. The foundation seems 
to be proposed in a top-down fashion and seems to lack the grass roots 
orientation which makes endeavors such as those listed under subsection 
b successful. The Council feels that these tasks could be coordinated 
with existing organizations and delegated appropriately to local units.
         xi. clean water action plan--corps of engineers issues
    ICWP supports the Administration's efforts to implement the Clean 
Water Action Plan and urges the Administration to continue to work with 
the States, local governments and interstate river basin organizations 
to implement the goals of this plan. We feel that these communities 
play a vital role in protecting the Nation's valuable water resources.
Measurement of Wetlands Goal
    ICWP recognizes that wetlands are a precious natural resource. ICWP 
is committed to stemming the present rate of loss the Nation is 
experiencing on a yearly basis. However, one issue the Council would 
like to raise for consideration is the measurement of achievement of 
the wetlands goal, which is a net increase of 100,000 acres of wetlands 
per year. ICWP is concerned that because ``unavoidable'' losses are to 
be offset by mitigation gains, basing the goal on acreage alone 
obscures differences in type, function and quality. Wetland creation 
does not always replace lost functions and values.
    It is unclear how enhancement acreage will be counted. Preservation 
as a form of mitigation may protect large connected systems but neglect 
small isolated wetlands, possibly with detrimental effects to 
particular species, and in any event does not add acreage to the total. 
Separate data collection for acres preserved would be useful. Perhaps 
these factors can be taken into account in establishing the interagency 
tracking system proposed in the plan.
Challenge 21-Flood Hazard Mitigation and Riverine Restoration Program
    ICWP also supports the Administration's proposed Challenge 21, as 
one of the tools for flood damage reduction and riverine ecosystem 
restoration. ICWP understands and supports the goals to expand the use 
of non-structural flood damage reduction measures and to provide for 
more effective coordination of Federal programs on a watershed basis. 
The Council also supports the proposed 65 Federal/35 local cost share 
proposed for the program. ICWP understands that the non-Federal 
interests shall be responsible for all costs associated with operating, 
maintaining, replacing, repairing, and rehabilitating all projects 
carried under this authority.
    ICWP supports the project justifications as outlined in the 
Administration's proposal, which state that a project authorized under 
this program must be determined to significantly reduce potential flood 
damage, improve the quality of the environment and is justified 
considering all costs and beneficial outputs of the project. The 
Council also urges the Corps to involve its members in the development 
and review of the criteria for selecting and rating the projects to be 
carried out as part of the flood damage reduction and riverine 
restoration program.
                   xii. critical stream gaging issues
    ICWP urges Congress to support and direct the U. S. Army Corps of 
Engineers to maintain streamgages nationwide, as part of their ongoing 
responsibility for management along the waters of the Nation. The Corps 
should be urged to partner or cost share with non-Federal agencies on 
those gages having shared uses among Federal and non-Federal agencies. 
These gages play a critical role in maintaining the Nation's water 
resources and need to have Federal support.
    The subcommittee needs to be aware that the Corps of Engineers has 
helped to fund these gaging stations, but recent budgetary constraints 
within the Corps are inducing certain District offices to withdraw 
their support of gaging stations traditionally used by the Corps and 
States in the management of water resources. Numerous members of ICWP 
are facing circumstances of losing gages which they have historically 
relied upon for certain needs because water control operations within 
Corps Districts are cutting out support.
    The Interstate Council on Water Policy appreciates the opportunity 
to comment on WRDA 98.
                                 ______
                                 
           Statement of Sacramento Area Flood Control Agency
                              introduction
    Mr. Chairman and members of the committee, I am Muriel P. Johnson, 
Chair of the Sacramento Area Flood Control Agency (SAFCA). We 
appreciate the opportunity to appear before your committee during its 
hearings on the Water Resources Development Act of 1998. My statement 
will cover four issues: (1) what is at stake in Sacramento for the 
local community, the State of California, and the Federal Government in 
the event of an uncontrolled flood along the American River; (2) what 
have SAFCA and its member agencies done to reduce the risk of flooding 
in Sacramento; (3) why is SAFCA advocating modifications to Folsom Dam 
and improvements to American River and South Sacramento Streams Group 
levees as the next steps in the ongoing process of upgrading 
Sacramento's existing flood control system; and (4) why is this matter 
ripe for resolution. My major contentions are as follows:
    No river city in America faces a graver threat of flooding than 
Sacramento where 400,000 residents, the State Capitol and 160,000 other 
structures, with an estimated value of $37 billion, occupy a vast 
floodplain at the confluence of the Sacramento and American Rivers. 
Economic losses from an uncontrolled flood are estimated to range from 
$7 billion to $16 billion depending on the magnitude of the flood 
event. At the lower level, the damages would be comparable to those 
suffered in the 1989 Loma Prieta earthquake. Assuming a comparable 
public/private sector response to such a disaster, costs for relief and 
reconstruction would total almost $5 billion of which the Federal 
Government would contribute approximately $2.6 billion, State and local 
government $1 billion, private insurance $1 billion, and private 
charities $125 million.
    In response to the record floods of 1986 and 1997 and Congress' 
decision not to authorize a comprehensive flood risk reduction program 
for Sacramento involving construction of a flood control dam at Auburn, 
SAFCA has determinedly pursued an incremental approach to upgrading the 
existing flood control system. This approach has focused on repairing 
and improving the levees which provide residents of the floodplain with 
the first line of defense against flood damages and increasing the 
space available for flood control in Folsom Reservoir. In pursuit of 
these improvements, SAFCA has spent almost $100 million for planning, 
administration and construction of flood control improvements since 
1990.
    The logical next steps in this process are to implement structural 
modifications to Folsom Dam which would improve flood control 
operations and make more effective use of the space available for flood 
control in the reservoir, raise and strengthen the American River 
levees to allow dam operators to step up the releases from Folsom Dam 
in the event of very large flood events, and to improve the South 
Sacramento Streams Group levees which guard the backdoor to the 
American River floodplain. These improvements are described in the 
Chief's Report dated June 27, 1996 for the American River Watershed 
Project, California and in the Chiefs Report for the South Sacramento 
Streams Group Project which will be available this June.
    The matter of increased protection for Sacramento is ripe for 
decision by Congress. A comprehensive analysis of available flood 
control options for Sacramento was presented in the Army Corps of 
Engineers Supplemental Information Report, American River Watershed, 
which was prepared for your consideration in 1996. SAFCA heartily 
agrees with the principal finding of the National Research Council's 
Committee on Flood Control Alternatives in the American River basin 
which was formed for the express purpose of reviewing the Corps of 
Engineers' (Corps) analysis: ``It is time to select and implement flood 
risk reduction strategies for the American River basin.''
   an emerging consensus on safca's preferred next step has developed
    The above described locally preferred American River flood control 
project was selected by SAFCA by a 10 to 2 vote. The Sacramento City 
Council unanimously endorsed SAFCA's selection. In March, the National 
Wildlife Federation, in testimony before the House Committee on 
Transportation and Infrastructure, urged authorization of this project. 
On April 10, the Office of Management and Budget, in a letter to 
Sacramento Congressman Robert Matsui, announced the Administration's 
support for authorization of the project. SAFCA believes these actions 
of support clearly demonstrate a consensus that Folsom Dam and levee 
modifications is the right next step.
                            what's at stake
    Like most of America's river cities (Plate 1), Sacramento's 19th 
century economy revolved around river transport. As a result, the 
city's early settlers preferred to live close to the water's edge--
opting to battle the large floods that periodically transformed 
California's Central Valley into an inland sea rather than retreat to 
high ground. As a result, over the past 150 years, the floodplain at 
the confluence of the Sacramento and American Rivers has been widely 
developed. An extensive system of flood works built almost entirely by 
the Corps of Engineers during this century has prevented serious 
flooding during the city's modern era (Plate 2). However, the record 
flood of 1986 has reminded area residents of the perils of life in a 
floodplain and caused flood control engineers to reassess the 
likelihood of uncontrolled flooding along the American River.
    It now appears that without substantial improvement of the existing 
flood control system, there is approximately one chance in 80 that 
Sacramento will be flooded from the American River in any year. This 
annual risk translates into a cumulative risk, over the next thirty 
years, of one chance in three. A home in the floodplain is thus more 
likely to be damaged by a flood than a fire, and much more likely to be 
damaged by a flood than an earthquake.


    The flood will be the direct result of either a levee failure or 
levee overtopping along the Lower American River. When the breach 
occurs, water levels in the American River will be eight to 15 feet 
higher than the ground outside the levees. Water will pour through the 
gap and spill into the heavily urbanized areas along the Sacramento and 
American Rivers, eventually inundating as much as 55,000 acres.
    Because the American River watershed is steep, runoff increases 
very rapidly after a major storm. State and Federal flood control 
officials will, at best, be able to give Sacramento 8 to 12 hours of 
warning prior to the breach. Approximately 400,000 people live in the 
area which could be flooded. There are approximately 160,000 
residential structures, 5,000 business and 1,200 government facilities, 
including the State Capitol, in the potential floodplain. Seven of the 
region's nine major hospitals will be flooded as will seven of the 
area's nine police stations. 130 schools will be damaged or destroyed. 
Flood depths will range from 5 to 20 feet, depending on ground 
elevations in the flooded area and the duration of high river stages. A 
list of the affected facilities is attached for the committee's 
information as Appendix A.
    Damages, without including costs for local and statewide business 
disruption are estimated to range from a minimum of $7 billion for a 
100-year flood to $16 billion for a 400-year flood. At the lower level, 
the damages would be comparable to those suffered in the 1989 Loma 
Prieta earthquake which caused 63 deaths, 3,757 injuries, and more than 
$8 billion in direct property damage. Assuming a comparable public/
private sector response to such a disaster, costs for relief and 
reconstruction would total approximately $4.75 billion of which the 
Federal Government would contribute approximately $2.6 billion (Table 
1), State Government $1 billion, private insurance $1 billion, and 
private charities $ 125 million.

    Table 1.--Allocation of Federal Costs for Loma Prieta Earthquake
------------------------------------------------------------------------
 
------------------------------------------------------------------------
FEMA--Disaster Relief.....................  $0.85 billion
Federal Highway Adm.--Emergency Bridge &    $1.0 billion
 Highway Repair.
Small Business Adm.--Disaster Loan Fund...  $0.5 billion
Department of Commerce *..................  Unknown
President's Discretionary Funds...........  $0.25 billion
 
------------------------------------------------------------------------
* To supplement existing SBA and FEMA business loan programs.

                         safca's long-term goal
    Since its inception, SAFCA's long-term flood control planning goal 
for the American River basin has been to provide Sacramento with a high 
level of flood protection. This goal, variously defined over the years 
as protection from a 200-year or larger flood, or protection from the 
``standard project flood,'' inspired the design and construction of 
Folsom Dam and Reservoir in the 1950's, gave impetus to the 
multipurpose Auburn Dam project in the 1960's and 70's, when large 
storms demonstrated Folsom's inadequacies (Plate 4), and guided the 
governmental response to the record flood of 1986 along the American 
River. According to the June 1994 report by the Interagency Floodplain 
Management Review Committee, ``Blueprint for Change, Sharing the 
Challenge--Floodplain Management in the 21st Century'' (Galloway 
Report), the standard project flood (or ``SPF'') . . . represents the 
flow that can be expected from the most severe combination of 
meteorologic and hydrologic conditions reasonably characteristic of the 
geographic region involved . . . The SPF discharge is generally used to 
determine the level of protection for urban population centers where 
there is great threat of loss of life and damage to critical 
infrastructure.'' SAFCA believes its long-term flood protection goal of 
minimum 200-year protection is also consistent with the level of flood 
protection provided to other cities of comparable size throughout the 
United States.


    what has been accomplished in reducing the risk of flooding in 
                               sacramento
    Based on the most current hydrology for the American River basin, 
it appears that SAFCA's long-term planning goal of not less than 200-
year flood protection can only be achieved by creating a new flood 
control storage facility along the American River upstream of Folsom 
Dam. SAFCA and the surrounding communities sought congressional 
authorization of such a facility at Auburn in 1992 and again in 1996. 
In both instances, Congress rejected the proposal for a dam. In light 
of those actions, SAFCA has opted to pursue a series of incremental 
improvements to the existing flood control system with the aim of 
achieving as much flood protection as possible without adding new 
storage capacity to this system. This approach (Plate 3) has produced 
the following results:
     SAFCA has cooperated with the State Reclamation Board and 
the Corps of Engineers in carrying out $35 million of improvements to 
strengthen approximately 33 miles of the east levee of the Sacramento 
River which protects 40,000 residents of the Natomas basin and much of 
the urbanized portion of the city of Sacramento south of the American 
River. This work was conducted under the existing authorization for the 
Sacramento River Flood Control Project.
     SAFCA, at its own expense, has completed $60 million worth 
of levee and related improvements to protect Natomas and portions of 
North Sacramento (collectively referred to as the North Area) from 
flooding along the Natomas East Main Drainage Canal and lower Dry and 
Arcade Creeks. This work was authorized as part of the 1993 Defense 
Appropriations Act.
     SAFCA has entered into an agreement with the U.S. Bureau 
of Reclamation (Reclamation) to increase the space available for flood 
control in Folsom Reservoir, provided that SAFCA fairly compensates the 
Federal Government for any resulting loss of hydropower and replaces 
any lost water that may be needed by Reclamation to meet contractual 
obligations or environmental requirements. As part of the Common 
Elements project authorized in the 1996 Water Resources Development 
Act, Congress directed Reclamation to continue such operation until a 
comprehensive flood control plan is initiated and authorized Federal 
cost sharing through the year 2000.
     SAFCA has facilitated a consensus among flood control, 
environmental, recreation and neighborhood interests to proceed under 
the authority of the Sacramento River Bank Protection Project with a 
series of uniquely designed erosion control measures at four sites 
covering almost two miles of the south bank of the Lower American 
River.
     SAFCA is cooperating with the State and the Corps on a 
project involving $63 million in improvements to strengthen the levees 
along both sides of the American River and to raise and strengthen 
portions of the east levee of the Sacramento River. This work was also 
authorized as part of the Common Elements project.
    These incremental improvements provided Sacramento with an 
important margin of safety in warding off the flood of 1997. The full 
power of this storm was centered in the Feather River watershed north 
of Sacramento, where levee failures resulted in devastating flooding. 
Even with this fortunate act of nature, this storm nearly equaled the 
record magnitude of the 1986 flood on the American River. Unlike 1986, 
however, no significant seepage occurred along the east levee of the 
Sacramento River; SAFCA's variable storage space operation at Folsom 
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