[Senate Hearing 106-123]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 106-123
 
                WATER RESOURCES DEVELOPMENT ACT OF 1999

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 11, 1999

                               __________

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


                     U.S. GOVERNMENT PRINTING OFFICE
57-822 cc                    WASHINGTON : 1999

_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402




               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       one hundred sixth congress
                 JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire          DANIEL PATRICK MOYNIHAN, New York
JAMES M. INHOFE, Oklahoma            FRANK R. LAUTENBERG, New Jersey
CRAIG THOMAS, Wyoming                HARRY REID, Nevada
CHRISTOPHER S. BOND, Missouri        BOB GRAHAM, Florida
GEORGE V. VOINOVICH, Ohio            JOSEPH I. LIEBERMAN, Connecticut
MICHAEL D. CRAPO, Idaho              BARBARA BOXER, California
ROBERT F. BENNETT, Utah              RON WYDEN, Oregon
KAY BAILEY HUTCHISON, Texas
                     Jimmie Powell, Staff Director
               J. Thomas Sliter, Minority Staff Director

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page

                             MARCH 11, 1999
                           OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana.........     2
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island     1
Graham, Hon. Bob, U.S. Senator from the State of Florida.........    18
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................    15
Moynihan, Hon. Patrick, U.S. Senator from the State of New York..    31
Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     3
Warner, Hon. John W., U.S. Senator from the Commonwealth of 
  Virginia.......................................................     3

                               WITNESSES

Westphal, Hon. Joseph W., Assistant Secretary of the Army for 
  Civil Works; accompanied by Michael Davis, Deputy Assistant 
  Secretary for Policy and Legislation...........................     4
    Prepared statement...........................................    31
    Responses to additional questions from:
        Senator Boxer............................................    45
        Senator Crapo............................................    27
        Senator Graham...........................................    49
        Senator Lautenberg.......................................    44

                                 (iii)




                    WATER RESOURCES DEVELOPMENT ACT 
                                OF 1999

                              ----------                              


                        THURSDAY, MARCH 11, 1999

                               U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:32 a.m. in 
room 406, Dirksen Senate Office Building, Hon. John H. Chafee 
(chairman of the committee) presiding.
    Present: Senators Chafee, Warner, Baucus, Voinovich, 
Lautenberg, Graham, and Crapo.

           OPENING STATEMENT OF HON. JOHN H. CHAFEE, 
          U.S. SENATOR FROM THE STATE OF RHODE ISLAND

    Senator Chafee. Today we want to welcome Dr. Westphal, 
Assistant Secretary of the Army for Civil Works.
    Today we will be considering the Water Resources 
Development Act for 1999 in regards to its fiscal year 2000 
budget request for the Army Corps Civil Works program.
    On March 2 of this year, just last week, Senator Warner, 
joined by Senators Baucus, Voinovich, Lautenberg, Bennett, 
Boxer, and myself introduced the Water Resources Development 
Act of 1999, which is S. 507.
    This bill, which authorizes an estimated $2 billion in 
Federal funds for flood control, navigation, environment, and 
shore protection projects and studies, is virtually identical 
to legislation which we adopted last October in the Senate.
    This is good legislation that is important to different 
States and communities across the country. These non-Federal 
sponsors have dutifully cost-shared all of the studies, the 
design work, and other preparatory steps for the construction 
phase of flood control, shoreline protection, environmental, 
and navigation projects.
    I see it as our duty to now move forward with the 
authorization of worthwhile projects. This is what this bill 
does, and I hope we can advance it swiftly, particularly since 
it was approved, as I mentioned before, by the Senate late last 
year on October 9, 1998.
    Secretary Westphal was very helpful last year, and I look 
forward to working closely with him again.
    Secretary Westphal is also here this morning to present the 
fiscal year 2000 budget request for the Army Corps. This budget 
request of $3.9 billion is essentially level with that 
appropriated by Congress for the current fiscal year. A large 
portion of the 2000 request, however, includes assumed revenues 
from this new Harbor Services Fund. Almost 25 percent of the 
overall budget request is made up by the estimated $950 million 
that has been set aside under this new fund.
    Obviously, we need to take a close look at this. We need to 
hold hearings with all of the stakeholders. Who are they? The 
shippers, the vessel operators, ports, and others--to make sure 
that there is equal burden-sharing and to examine the budget 
implications.
    We should continue with some kind of user fund system, but 
I must say I don't know just which approach we should take, but 
I'm eager to receive detailed proposals from the Administration 
so we may begin the process of responding to last year's 
Supreme Court ruling.
    I see Senator Baucus is here. Senator, did you have a 
statement?

  OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE 
                        STATE OF MONTANA

    Senator Baucus. Thank you very much, Mr. Chairman. I join 
you in welcoming Dr. Westphal this morning.
    As you know, Mr. Chairman, today's hearing on S. 507, the 
Water Resources Development Act, gives us an opportunity to 
hear the Administration's proposal for policies and projects 
for the Corps of Engineers. This year's WRDA bill is 
essentially the same bill the Senate passed during the 105th 
Congress. It was not enacted because there was no companion 
bill in the House.
    I hope that our swift action on the bill early this session 
will spur House discussions on the flood control project for 
Sacramento. If an agreement can be reached, we can get WRDA 
1999 signed into law and look forward to WRDA 2000.
    WRDA 1999 proposes a number of new initiatives: 
establishment of the Challenge 21 program, which would 
authorize non-structural flood control and river ecosystem 
restoration projects; an aquatic restoration program for the 
Missouri River; changing the cost share for shoreline 
protection, making beach renourishment a 50/50 Federal/non-
Federal responsibility; 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.
    I also look forward to hearing the views of the 
Administration on the future of the Harbor Maintenance Trust 
Fund and the alternative that they are considering.
    Now that the Supreme Court has ruled that the ad valorem 
fee on exporters is unconstitutional, we need to find an 
equitable source of funding to ensure the continued viability 
of our Nation's ports.
    This committee wants to be very helpful, it wants to be 
involved in developing that alternative, and we look forward 
very much to hearing from you Honorable Westphal this morning.
    Thank you.
    Senator Chafee. Thank you, Senator.
    Senator Warner.

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

    Senator Warner. Thank you, Mr. Chairman. I appreciate the 
support that you gave me last year as the subcommittee chairman 
and the support I received from our distinguished ranking 
member who, indeed, worked with me a great deal on this, and 
for the courtesies accorded this Senator from our newest member 
here, Senator Voinovich.
    The important thing is that America looks upon this 
legislation as being predictable. I have observed, as other 
Members of the Senate, through the years, the care with which 
the communities try to order their priorities, and in the end 
put up such matching funds as are required.
    Our waterways are our links and our lifelines. This is 
America, a maritime nation. We must project across the oceans, 
not only for our national security but our own economic 
security, and therefore it is essential that the Congress, in a 
timely and hopefully predictable manner, can work with the 
communities and States across this Nation to develop those 
facilities and to improve them.
    I join in welcoming our distinguished guest.
    Which title do you like best, Doctor or Secretary?
    Dr. Westphal. I'd prefer Joe.
    Senator Warner. It kind of muddles up the record, so you 
have to make a choice between the two.
    Thank you, Sir.
    Senator Chafee. Senator Voinovich is the chairman of the 
subcommittee that deals with this, and so his panel has 
jurisdiction and we're delighted you're here, Senator.

OPENING STATEMENT OF OF HON. GEORGE V. VOINOVICH, U.S. SENATOR 
                     FROM THE STATE OF OHIO

    Senator Voinovich. Thank you, Mr. Chairman. I'm pleased to 
be here today as the new subcommittee chairman on 
Transportation and Infrastructure. I have worked with my 
colleagues on the committee to seek swift passage of Senate 
bill 507, and particularly I'd like to recognize the efforts of 
Senator Warner, the sponsor of this year's bill, along with 
Senator Chafee and Senator Baucus, who had worked diligently 
for final passage of this bill in the 105th and didn't get 
there, and I'm pleased to join them this year as an original 
co-sponsor of Senate Bill 507.
    As has already been mentioned, it is identical with the 
legislation last year, and when I found out about that I asked 
the chairman if he would bypass the subcommittee level so that 
we could get on with it and get it passed, since it didn't get 
passed last year.
    I join my colleagues in the belief that it is important 
that we continue to enact Water Resources Development Acts 
every 2 years without lapse to ensure that our Nation's 
infrastructure is maintained and constructed in a timely 
manner. I think that is really important, more important today 
than ever before, because in so many of these projects you're 
looking for local sponsorship of them and partial payment of 
them, and people get on to a schedule, and the most important 
things they can rely upon that it's going to take place, so I 
think it is real important that this be done every 2 years.
    I think it is wonderful that this is a bipartisan effort 
with Congress and the Administration, particularly the Army 
Corps of Engineers and the Office of Assistant Secretary of 
Army for Civil Works to ensure, as Senator Warner said, that 
our large water resources program is effective and responsive 
to future and current needs.
    I am particularly pleased--and this is maybe a little bit 
provincial--that the bill under section 224 provides for a 
Great Lakes Basin program. This section directs the Corps to 
develop a strategic plan for programs within the Great Lakes 
basin, and further will provide the means for assessing the 
ability of Corps' projects and programs to meet regional water 
resource needs.
    I am particularly interested in it because I was chairman 
of the Council of Great Lakes Governors, and we were concerned 
about the Great Lakes and the fact that we didn't have that 
kind of a plan, and one of the projects that I undertook as 
Governor of Ohio was to do a Lake Erie water quality index. We 
had made great progress, but we had no baseline numbers to 
determine whether or not we were really getting the job done. 
And so we identified 10 indexes that were going to measure our 
progress, and if we can get this plan done for the Great Lakes, 
that then could be coordinated with this project and we could 
really monitor how we are doing in terms of the Great Lakes.
    I'd also like to note that I think Senator Glenn, was also 
very interested in moving forward with that, so I am pleased 
that we are moving forward with that.
    Mr. Secretary, we look forward to your testimony this 
morning.
    Senator Chafee. Thank you very much, Senator.
    Senator Lautenberg, do you have a statement?
    Senator Lautenberg. Mr. Chairman, I'll submit my statement 
for the record.
    Senator Chafee. Again, we welcome you, Dr. Westphal. Why 
don't you proceed with your testimony?
    Senator Warner. OK, Joe, give it to us.

 STATEMENT OF HON. JOSEPH W. WESTPHAL, ASSISTANT SECRETARY OF 
THE ARMY FOR CIVIL WORKS; ACCOMPANIED BY MICHAEL DAVIS, DEPUTY 
         ASSISTANT SECRETARY FOR POLICY AND LEGISLATION

    Dr. Westphal. Thank you, Mr. Chairman. It is an honor to 
come before your committee, Mr. Chairman and distinguished 
ranking colleague, Senator Baucus. Also, I am here before three 
of my chairmen--yourself, my chairman of the Armed Services 
Committee, and my mentor, a person I've learned a lot from over 
the years, and my new chairman of the subcommittee, Senator 
Voinovich, so I'm delighted to be here and I look forward to 
responding to all your questions as best as I can.
    I'm accompanied before you today by my Deputy Assistant 
Secretary for Policy and Legislation, Mr. Michael Davis.
    Senator Chafee. We welcome you, Mr. Davis.
    Mr. Davis. Thank you.
    Dr. Westphal. Mr. Chairman, I am going to be very brief. 
I'm going to just summarize some of my testimony, if you don't 
mind, and just submit the full testimony for the record.
    Let me begin first by noting that the large differences 
between the Administration's budget proposal last year and what 
you appropriated in the Congress in both fiscal year 1998 and 
1999 are now, I think, reconciled in the fiscal year 2000 
budget that I am about to discuss.
    The President has consistently stressed two major themes 
that I think are particularly important to the way we should 
formulate and implement civil works policy.
    The first, policy must be based on building strong 
partnerships with our States and our local communities, as well 
as our sister Federal agencies. That's the point that I think 
Senator Warner just addressed very eloquently.
    Second, we must strive to help our economy grow and prosper 
by combining sound infrastructure management and development 
with environmental protection and ecosystem restoration.
    I believe our program excels in both of these mandates, and 
that the budget I will present to you today reflects their 
important priority.
    I am pleased to say that funding in the President's fiscal 
year 2000 budget supports a strong civil works program. It is 
consistent with levels enacted by Congress in recent years, and 
with the President's overall domestic priorities, his 
commitment to a balanced budget, and his goal for protecting 
Social Security.
    The President's budget for the civil works program for 
fiscal year 2000 includes $3.9 billion for the discretionary 
program comparable to the amount appropriated in the program in 
1999, and significantly above last year's budget.
    With cost sharing contributions by our partners, the non-
Federal sponsors, plus other funding, the fiscal year 2000 
program totals about $4.2 billion.
    I look forward to working with both the houses of Congress 
in meeting the challenges of these partnerships. I'd like to 
point out that in the fiscal year 2000 budget, civil works 
operations and maintenance general program is $1.84 billion. 
This level of funding is very strong, demonstrating the 
Administration's commitment to maintaining our existing 
infrastructure, much of which is aging and requires greater 
upkeep.
    Funding for construction general program is $1.24 billion, 
a significant increase over last year's request.
    On new investments, the fiscal year 2000 budget for the 
Army civil works program provides a strong program of new work, 
including 1 new survey, 19 new construction projects, 5 new 
operation and maintenance new starts, and 6 new plant 
replacement and improvement program major acquisitions in the 
Challenge 21 program.
    And I also want to emphasize, like you, Mr. Chairman, and 
other members of the committee, our commitment to water 
resources development and biannual authorization of WRDA. A 
strong water resources development program is a sound 
investment in our Nation's economic future and environmental 
stability. Communities across the country benefit from water 
resources projects to reduce flood damages, compete more 
effectively in world trade, provide needed water and power, and 
protect and restore our rich aquatic resources.
    In this regard, we will work with Congress to complete a 
Water Resources Development Act in 1999, building on the 
progress that you made and we made last fall in the proposed 
WRDA 1998 bill.
    As you know, the Army, on behalf of the Administration, 
submitted to Congress a proposal in 1998. We believe this 
proposal should serve as the basis for the WRDA 1999. The 
Senate version of WRDA 1998 included important Administration 
policy initiatives, such as our Challenge 21 program, changes 
to shore protection policy, and much-needed improvements in our 
recreation program.
    We hope that, based on our bill and with the assistance of 
the authorizing committees, we can come to closure on our WRDA 
1999 bill early this year, and that it includes important 
policy initiatives and vital projects, while recognizing the 
continued budget constraints.
    This would put us in a better position to address new 
policy and project needs in a WRDA 2000 bill.
    We appreciate your commitment to WRDA 1999. The 
Administration, however, has concerns about the total cost of 
S. 507 and the impacts of authorizing a sizable number of new 
projects at this time, in view of existing backlog and 
continued budget constraints. Therefore, we urge this committee 
to limit the number of new projects authorizations in its 
legislation, as we have done in our proposal, to reflect only 
those additional costs that one might expect to be able to fund 
within a reasonable timeframe.
    We are particularly be concerned about the use of 
contingent authorizations which bypass the existing project 
planning and review process by preauthorizing projects 
contingent upon the issuance of a report by the Chief of 
Engineers.
    Senator Chafee. Mr. Secretary, I know that you are moving 
ahead on this. What page are you roughly on?
    Dr. Westphal. I'm summarizing, so let me----
    Senator Chafee. I appreciate that.
    Dr. Westphal. You bet.
    Senator Chafee. But sometimes it is helpful if we can kind 
of follow along roughly where you are.
    Dr. Westphal. We're on page 3, Sir.
    Senator Chafee. You're on page 3? OK.
    Dr. Westphal. Third paragraph of page 3.
    Senator Chafee. All right. Why don't you keep going, then? 
You did the, ``Each new project authorization adds to the 
existing large backlog,'' at the top of page 3. You've done 
that. Yes. OK.
    Dr. Westphal. Yes. And concerned about the contingent 
authorization projects.
    We believe these provisions would weaken the study process 
and review responsibilities of the Army Corps of Engineers and 
my office and would undermine the biannual WRDA process that 
has been the goal of Congress and every Administration since 
1986.
    The Administration appreciates the committee's support of 
these projects that have completed the normal planning and 
review process and the inclusion of some of our initiatives. We 
are optimistic that we can work with your committee to resolve 
our concerns in a manner that allows us to fully support S. 
507.
    On the Harbor Services Fund proposal, a key component of 
the President's fiscal year 2000 budget for the civil works 
program is the proposal for a new Harbor Services Fund and 
harbor services user fee. This proposal would provide a 
reliable source of funding for important navigation needs, 
including construction, operations, and maintenance, and 
results in a significantly greater funding for these port and 
harbor activities.
    The President's budget for fiscal year 2000 includes $951 
million to be derived from the Harbor Services Fund, an overall 
increase of $382 million over the President's fiscal year 1999 
budget for harbor-related activities.
    This level of funding will allow us to proceed at an 
optimal rate on nearly all operations and maintenance and 
construction activities related to ports and harbors using 
funds contributed by the users.
    As you know, in March 1998 the U.S. Supreme Court ruled 
that the harbor maintenance tax was unconstitutional as applied 
to exports. In that ruling, the court concluded that the harbor 
maintenance tax, which imposed a large charge based on the 
value of commercial cargo being shipped, constituted a tax on 
goods in export transit and therefore violated the export 
clause of the Constitution.
    Because of this ruling, collections of the harbor 
maintenance tax on export stopped on April 25, 1998. The new 
harbor services user fee being proposed avoids the 
constitutional infirmities of the harbor maintenance tax. This 
assessment is a user fee, not a tax. It fairly approximates the 
harbor benefits and services vessels in each category receive 
through port use. It is not imposed based on the cargo of the 
vessel.
    The user fees will generate funds sufficient to pay for the 
Department of the Army's annual cost of developing, operating, 
and maintaining the Nation's ports. The legislative proposal 
will make the total amount of the user fees collected pursuant 
to this proposed legislation in 1 year available to the next 
fiscal year for appropriations.
    We are coming to completion on the details of the proposal 
in light of discussions and comments with interest groups. We 
plan to present the legislative proposal to Congress in the 
very near future. Our plan is to pursue the Harbor Services 
Fund legislative proposal separately from WRDA.
    The Administration is committed to the traditional mission 
areas of improving our navigation and transportation system, 
protecting our local communities from flood damages and other 
disasters, and maintaining and improving hydropower facilities 
across the county.
    In addition, the protection and restoration of the 
environment is an important and integral part of the civil 
works portfolio. The President has strongly advocated linking 
economic growth and protection of the environment. To help meet 
this objective, we will support projects that feature strong 
economic benefits, as well as projects that incorporate 
environmental restoration and enhancement. Of course, 
individual environmental restoration projects are also an 
important part of the civil works mission.
    An example of a program that will integrate the 
environmental concerns into more-traditional civil works 
missions is our Challenge 21, the Riverine Ecosystem 
Restoration and Flood Hazard Mitigation initiative. Like last 
year, this year's budget includes $25 million to begin the 
Challenge 21 program. It is designed to accomplish both flood 
hazard mitigation and ecosystem restoration, and emphasizes 
non-structural measures as a means to accomplish these 
objectives.
    The fiscal year 2000 budget for the civil works regulatory 
program is $117 million, an increase of $11 million over the 
enacted levels in fiscal year 1999. In this program, we are 
proud that we not only protect our aquatic resources, but we 
try to help people within the law to find environmentally 
sustainable solutions to their problems.
    In fiscal year 1998, the regulatory program authorized 
90,000 activities in writing, the most in any year, and nearly 
95 percent of all actions were authorized in less than 60 days.
    This budget will ensure that we can continue to protect the 
environment, and that the level of service is maintained and 
improved, even with an increasing volume of work.
    In summary, the President's fiscal year 2000 budget for the 
Army civil works program is a good one. It demonstrates a 
commitment to civil works missions, with strong support of all 
programs, a plan to solve the Constitutional problem with the 
existing harbor maintenance tax, an especially strong program 
of new construction, a firm commitment to maintaining an 
existing water resources management infrastructure, and 
increased application of civil works program expertise to 
environmental protection and restoration.
    With that, Mr. Chairman, I end my statement and thank you 
for the opportunity to testify to you before the committee 
today.
    Senator Chafee. Thank you, Mr. Secretary.
    Now, this user fee is a great big part of your expected 
revenues. What makes you think everything is going to be all 
right now as far as the Supreme Court goes and the commerce 
clause?
    Dr. Westphal. If I could take a second just to give you a 
little background on the history of how this proposal was 
developed, initially the development of it began before I came 
on board as Assistant Secretary of the Army, and when we 
received the initial proposal, we vetted it with a number of 
stakeholders.
    We felt that we had at that point satisfied the 
requirements of the Court and could meet the constitutional 
test, but we did not feel that we had completely addressed all 
the issues addressed by the stakeholders, and that we still had 
a lot of adjustments to make in the way we calculated the fee, 
so we went back to the drawing board--I'm talking about August, 
September of last year--and spent most of last year, the 
remaining part of last year and early part of this year, 
revising the proposal, addressing its impact on different 
sectors in the economy, and making sure that we met the 
constitutional test.
    We have a proposal now. It is finished. It is being vetted 
with all the other Federal agencies. It is in an inter-agency 
review process, which I think is almost done.
    We hope to be able to deliver that proposal to Congress 
within the next few weeks, and I think it is a much better 
proposal, it is much stronger, it meets the constitutional test 
because it is a fee based on the equivalent of work that has to 
be done to maintain----
    Senator Chafee. I don't quite understand how it works. 
First of all, in addition to the constitutional problems, 
you've got the GATT problems, likewise.
    Dr. Westphal. Right.
    Senator Chafee. Now, I know that the last time you did this 
it was based upon the value of the cargo. In other words, a 
shipment of computers would be a lot more than a shipment of 
wheat.
    Dr. Westphal. That's correct.
    Senator Chafee. But how is this new one going to work now?
    Dr. Westphal. Well, this----
    Senator Chafee. And that was tossed out by the Supreme 
Court.
    Dr. Westphal. Right. First of all, it is addressed to the 
vessel, itself, the carrier, not to the shipper, and not to the 
commodity on the ship. So it is proportional to the amount of 
work that we have to do to maintain the channel, depending upon 
the type of vessel and the size and its impact on the channel.
    We are trying to collect only as much money from the fee as 
we historically have had to put into the maintenance of our 
ports.
    Senator Chafee. Obviously, we're going to have to spend 
some time on this. I must confess I don't understand it. If you 
come into Baltimore, is there a different fee than you might 
get coming into Norfolk?
    Dr. Westphal. No. The fee is the same. It will vary among 
the different types of vessels, not from what you're carrying--
wheat or cars or general cargo--because the ships are 
different. Because of the size of the ship and the tonnage of 
the ship.
    I kept sending it back to the drawing board because we had 
a lot of different scenarios and we wanted to make sure that we 
understood clearly and addressed the issues of how it would 
impact different sectors. You have your cultural sector, the--
--
    Senator Chafee. Well, this is a long, complicated subject, 
I think, and it is for another day.
    Dr. Westphal. Let me just say my plan, hopefully, is that 
when the proposal has been finally vetted by the other Federal 
agencies, that we will have a chance to come before your 
committee, not in a formal way, but informally with your staff 
and present the proposal, brief the staff, brief you, and make 
sure that before you get the final proposal in hand----
    Senator Chafee. I suppose the Finance Committee, too, will 
be deeply involved with this. But let's go on to the next one.
    Senator Voinovich. Mr. Chairman?
    Senator Chafee. Yes?
    Senator Voinovich. I'm not that familiar with how much it 
raises and----
    Senator Chafee. Well, it raises 25 percent of their total 
budget, as I understand.
    Senator Voinovich. And when do you anticipate it coming in, 
and how much of your 2000 budget is based on this new tax?
    Dr. Westphal. Of the 2000 budget, about $300 million.
    Senator Chafee. What's the percentage of that? The 
percentage of that is what, 25 percent?
    Dr. Westphal. Well, the amount that would be needed on the 
2000 budget, it would be less than that. The fund assumes that 
historically we have needed about $600 million on the O&M side 
and another $300 million on the construction side.
    Senator Chafee. I'll tell you what, let me--I just want to 
get my questions in here and we'll go back and forth.
    Senator Voinovich. OK.
    Senator Chafee. As you know, last year we got tripped up on 
the Sacramento problem. Is there any suggestion that that has 
been straightened out or going to be?
    Dr. Westphal. Well, it hasn't been straightened out yet. In 
fact, yesterday I met with Representative Doolittle of 
California. I have been speaking with Representative Matsui in 
previous weeks, as well. They have been talking and negotiating 
this, along with the other members of the California delegation 
whose Districts are impacted. They are on the verge of an 
agreement, but it is----
    Senator Chafee. Well, we'll keep our fingers crossed.
    Dr. Westphal. It is tentative.
    Senator Chafee. All right. Drop the other shoe. What's the 
``but''?
    Dr. Westphal. Well, they're on the verge, but we have to 
make sure that, first of all, the committees of Congress who 
have to appropriate and authorize are going to get a proposal 
that is reasonable, and so we are trying to----
    Senator Chafee. That's the question. Is it going to devour 
the other 49 States?
    Dr. Westphal. Right. We are trying to help them to put 
forth a proposal that we think will work with you and will work 
with the appropriators, as well. At this point I have my staff 
working with Mr. Doolittle's staff and Mr. Matsui's staff in 
crafting that.
    The committee staff has been very helpful in that regard, 
but now I think they've asked me to weigh in on my side.
    Senator Chafee. Well, my time is up. Senator Baucus.
    Senator Baucus. Thank you, Mr. Chairman.
    Secretary Westphal, as you know, this committee has 
jurisdiction over the Harbor Maintenance Trust Fund, as 
authorized in WRDA in 1986, and I expect that your proposal 
will be drafted in a way so this committee continues to have 
jurisdiction; is that correct?
    Dr. Westphal. Yes, Sir.
    Senator Baucus. Yes?
    Dr. Westphal. Yes.
    Senator Baucus. Thank you. A couple of questions on the 
fund, the trust fund proposal.
    I take it the constitutional infirmity was essentially that 
the collection of the fee, as it was intended to be at the 
time, was used generally for the Corps and not applied 
specifically to the work to be done in that specific harbor or 
area; is that correct? Is that one of the infirmities that the 
court found, that the revenue was used generally although the 
collection was collected specifically?
    Dr. Westphal. The infirmity was the fact that it was a tax 
on exports.
    Senator Baucus. We still have a fee on exports, but it----
    Dr. Westphal. Well, we don't have a fee on exports any 
more.
    Senator Baucus. I understand.
    Dr. Westphal. Under this new proposal----
    Senator Baucus. What was the court's problem? That's the 
basic question.
    Dr. Westphal. Just that you were levying a tax on exports, 
and they felt that violated----
    Senator Baucus. Because----
    Dr. Westphal. Because it was on the commodity.
    Senator Baucus. Whether it is a fee or tax or whatever it 
is called was on exports?
    Dr. Westphal. It was on exports and it was on the 
commodity. It was on what you were exporting. What we are doing 
is replacing that with a fee on the service provided to the 
vessels. No relationship to the commodity.
    Senator Baucus. OK. Now, if the new fee is on ships, 
depending upon the size of the ship or the amount of work that 
the Corps must do to accommodate that ship--that is, draft 
channels and so forth--in the back of my mind it sort of sounds 
like the larger the ship the greater the fee; is that correct?
    Dr. Westphal. Well, it is not just the size of the ship, 
but it is also the use of the channel by ships. Some ships, for 
example, make several trips, make continuous trips. Other ships 
make less use of the channel.
    Senator Baucus. Right. What I'm getting at is----
    Dr. Westphal. It's based on that.
    Senator Baucus [continuing]. Our economy is changing 
dramatically, and commodities are low in value, and my guess 
is, frankly, they are going to always be relatively lower than 
manufactured products or services or financial industries and 
so forth, oil.
    Now, maybe the price of oil will go up. Maybe OPEC is going 
to finally start ratcheting down production and the price is 
going to go up. I don't know. But there is a glut of oil today. 
The same with wheat. The same with a lot of agriculture 
commodities. It has just been a continual trend the last 
several years, decline in price.
    These commodities are bulk commodities. They are in big 
ships. And I just don't know if the right policy would be to 
hit them again, in effect, compared with other commodities 
which are higher-value commodities but lower in bulk and just 
don't require the same amount of work by the Corps to keep the 
channels open and the harbors operating and so forth.
    Have you considered that?
    Senator Warner. I'd like to associate myself with your 
point there, because coal is a major export from my State, and 
it seems to me, as you are saying, Senator, it is not a good 
standard.
    Senator Baucus. Right. So I wonder the degree to which 
you've considered all of that in drafting your proposal.
    Dr. Westphal. Well, we considered it after we started doing 
the impact analysis, and we looked at what the impact would be 
to, for example, bulkers who carry predominantly either the 
coal or grain, and so I sent folks back to the drawing board. I 
said:

    We've got to make sure that we come up with something here 
that addresses the differences between those types of 
commodities and others.

    Even though this is not a tax on commodities, we had to 
make some adjustments in the way we came up with the fee to 
compensate for those types of carriers, because, for example, a 
bulk carrier will generally make a port-to-port visit in one 
trip. It will go from one port to another, deliver its cargo, 
and that's it, whereas general cargo vessels tend to make 
multiple stops.
    And so the way the fee was--it's too complicated probably 
to get into how it was actually formulated in the formula, 
itself, but I can tell you we adjusted the formula to make sure 
that we weren't affecting those bulk carriers in an adverse 
fashion.
    We will be able to present to your staffs a more-detailed 
analysis that gives you examples of shipments and what the 
differences would be between the harbor services user fee and 
what they'd have to pay under that and what they were paying 
under the harbor maintenance tax.
    In most cases, in almost every case, I believe, that's 
going to----
    Senator Baucus. Well, I appreciate that very much, and I 
also very much appreciate your volunteering to consult with our 
staff informally before it is made public so that we can work 
out any kinks or problems in it in the meantime.
    Dr. Westphal. Yes, we'll do that.
    Senator Baucus. Thank you very much.
    Senator Chafee. Senator Warner.
    Senator Warner. I listened very carefully, Mr. Chairman, 
and Mr. Baucus, and I'm not sure I understand how you protect 
the bulk coal, grain, and so forth carrier, but you say you do 
it?
    Dr. Westphal. Well, we do it in a way that we calculate the 
formula, because the formula is based----
    Senator Warner. Is this all in the industry now and they 
know what it is?
    Dr. Westphal. No. The proposal is still being vetted 
through the agencies, so----
    Senator Warner. I'm going to put a place holder.
    Dr. Westphal. OK.
    Senator Warner. I accept your representation, but I'm going 
to put a place holder for the future. All right?
    Dr. Westphal. OK, sir.
    Senator Warner. Fair enough.
    This is a bit of a detailed question, but you're a detail 
man. Mr. Secretary, as we've discussed before, I believe the 
Federal Government has a fundamental responsibility to assist 
and protect the coastal communities. I have strongly opposed 
the Administration's policy that the protection of our Nation's 
shorelines from hurricanes and severe storms is a local 
responsibility. Congress also has rejected this policy and 
continues to provide the Federal share of the cost of 
construction for these projects.
    Last year legislation enacted by the Senate made 
modifications to the cost-sharing requirements for shore 
protection projects. With a 50-year life of a project, the 
local sponsor would be required to finance 50 percent of the 
cost of all renourishment work. This is an increase from the 
current requirement of 35 percent.
    I fought this policy change because the Administration's 
earlier statement said shifting greater cost to local 
communities would encourage the Administration to begin 
budgeting for these important projects.
    Now, Mr. Secretary, have I correctly stated the situation? 
Will the Administration return to budgeting for those projects 
under the new financing arrangement provided in the Senate 
bill?
    Dr. Westphal. Yes, Sir, we will.
    Senator Warner. That's a good answer. Stop right there.
    Now, Mr. Secretary, the Harbor Services Fund. The 
replacement of the harbor services fee will require a great 
deal of examination by this committee. I am very concerned by 
the early reports that the Administration has not worked 
closely with the various port authorities and other user groups 
in the development of this proposal. Mild criticism to a good 
man there.
    Can you tell me how this proposal will differ from the 
Administration's draft proposal released last fall? What 
efforts have you undertaken to respond to concerns that have 
been raised to date?
    Dr. Westphal. Well, Mr. Chairman, I held a series of 
meetings with stakeholders, which included the ports, included 
the shippers, included various commodity groups, as well.
    We held those sessions and we got back a long list of 
concerns. We tabulated those concerns, and then I sent staff to 
work on each one of those concerns and do essentially, as best 
as we could, an impact assessment.
    One of the problems with doing this is that the data is 
somewhat limited. For example, just in getting information 
about what ports charge or what foreign ports charge--we make 
some comparisons about how our trade posture would compare to 
other foreign countries--it was very difficult and sometimes 
totally impossible to get. They would not release it.
    But we got as much data as we could, put it together, we 
addressed these concerns, and then over and over I kept getting 
briefed by the analysts who were doing this and I kept sending 
them back to the work table to fix this, fix that, give me a 
better answer on this to make this proposal one that we could 
defend.
    I also, having been one of your students, recognized that 
the Congress is the best place eventually to make these 
decisions. And, as you will hear from your constituents and you 
will be able to work with your staff to fine-tune the proposal, 
we believe now that we've got a proposal we can hand off to you 
that we can explain to you, we can give you the necessary 
impact assessments that we've done, and we can support your 
efforts to make sure that whatever you do in the end is the 
right decision on this particular issue, which I agree is 
complex, has a serious impact on our economy and our country 
and our trade.
    Senator Warner. I thank the witness.
    Thank you, Mr. Chairman.
    Senator Chafee. Senator Voinovich.
    Senator Voinovich. Mr. Secretary, I know the Corps is 
conducting a navigation modernization study of the Ohio 
system's dams and locks, which are getting pretty old, and the 
Ohio River is pretty important to our economic well-being, and 
there is a project called the ``green-up project.'' Are you 
familiar with it?
    Dr. Westphal. I'm sorry, Sir, I'm not.
    Senator Voinovich. It is a project that Senator Byrd and 
Senator McConnell and myself are interested in. It involves 
West Virginia, Kentucky, and Ohio. It is down near Portsmouth, 
OH.
    There is a study, a modernization study, that is being 
looked at, and I'd like to know what the status of that project 
is, because, if we don't get moving on that, by the year 2010 
we are going to have a real problem in terms of moving cargo 
through that particular lock area. So if you could give me an 
answer on that----
    Dr. Westphal. I will certainly do that.
    Senator Voinovich. I'd be grateful.
    Dr. Westphal. I will get you an answer right away on that.
    [The information follows:]

    As part of the ongoing Ohio River Main Stem study, a draft 
interim report on potential modifications for both Greenup 
Locks and Dam and John T. Myers Locks and Dam is scheduled to 
be sent out for public review in January 2000.

    Senator Voinovich. In addition, as Governor I was working 
on the Columbus flood wall. Are you familiar with that project?
    Dr. Westphal. I know of it. I don't know the details of the 
funding part of that.
    Senator Voinovich. The question I have is that there is an 
authorization in the budget of $8 million for that flood wall, 
and what I'm interested in knowing is, from your best estimate, 
will that meet the construction schedule that the Corps has 
agreed to in moving forward with that?
    We have been very lucky that we haven't had a major flood 
in that area, because without this flood wall that area is very 
vulnerable, and I have been through two floods in the last 2 
years in Ohio, and they have been devastating.
    Dr. Westphal. So you need to know the capability?
    Senator Voinovich. I'd like to know whether the 
authorization is going to keep this on track or not.
    Dr. Westphal. Right. OK.
    Senator Voinovich. And whether additional money may be 
needed to stay on track.
    Dr. Westphal. I can get you an answer on that right away, 
too.
    [The information follows:]

    Our budget request for fiscal year 2000 contains $8,000,000 
to continue levee/floodwall construction and further design for 
remaining project features. If not constrained, we could use 
$16,000,000 in fiscal year 2000 to continue ongoing 
construction and engineering and design, contract award for 
reliable power and Phase IIIA (I-70 to Greenlawn Avenue); and 
contract award for Phase IIID (Rennick Run storm/sanitary pump 
station); and complete ongoing Phase IIE (Dodge Park Sanitary 
lift station) contract one year head of schedule.

    Senator Voinovich. And the last one is one that perhaps has 
larger implications, and that is: more and more we're finding 
sites around this country that are abandoned Army depots that 
pose real problems to communities. In Marion, OH, we have a 
situation where somehow a brand new school--actually, not a 
brand new one. It was built many years ago. But somehow they 
built a school right on top of an abandoned dump, Army dump, 
and it is highly contaminated. We've seen a dramatic increase 
in cancer in that area, particularly leukemia.
    I know that there is a study going on, and one of the 
things that I'm interested in knowing is: will that study let 
us know whether or not, in the Corps' opinion, the contaminants 
around that site are linked to leukemia, the high incidence of 
leukemia in the area?
    I'm just saying that this is a little Marion, OH, problem; 
it's a big problem in that community, and they're worried about 
whether they've got to move the school. If you were a parent 
having our Ohio EPA--and I compliment the Corps. They've been 
very cooperative. But the folks there are getting more and more 
antsy about this situation, and it is really important that it 
get high priority by the Corps of Engineers, and it also is 
taking on a national interest because of the book that is out 
called, ``Civil Action.''
    Dr. Westphal. I know about that project in two respects. 
One is that my daughter is getting married this summer to my 
future son-in-law, who is from Marion, OH, and his dad was 
telling me all about the issues in the community, and so I got 
very interested in that. And, in addition, General Ballard, the 
Chief of Engineers, and I actually spoke about this issue just 
a few weeks ago, maybe a week ago. I asked him to please get me 
some more detail on the study so I can keep on top of it, and I 
will speed that process up and get you some answers on what we 
know about it at this point in time.
    Senator Voinovich. I'd really appreciate it.
    Dr. Westphal. I know he's very concerned about it and very 
much involved with it.
    Senator Voinovich. It would be great if you could get it up 
on the priority list.
    Dr. Westphal. We'll do that.
    Senator Voinovich. I know I talked with General Van Winkle 
about it, and he's aware of it. And I say you've been very 
cooperative, but I think we need to speed it up a little bit 
for the folks in Marion.
    Senator Chafee. You set, Senator?
    Senator Voinovich. Yes.
    Senator Chafee. Senator Lautenberg.

        OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, 
           U.S. SENATOR FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. I thank you, Mr. Chairman. And thank 
you for holding this hearing today.
    I am a cosponsor of the Water Resources Development Act of 
1999, and I consider it one of the most important public works 
programs before the Senate.
    The legislation includes authorization for numerous water 
resource projects critical to my State, and I would dare say to 
other coastal States, and the projects that will protect 
property, wildlife habitat, and contribute to New Jersey's 
coastal economy are authorized to proceed, so we resolved in 
this committee--and I commend you, Mr. Chairman, for it--a 
dispute with the Administration on the funding for shore 
projects by arriving at a compromise that is reasonably 
acceptable.
    The thing that I must tell you I don't understand--members 
of this committee may be tired of hearing me talk about this--
but replenishment, sand replenishment is part of the 
infrastructure of the seashore, one of the biggest tourist 
attractions in this country, and we are sitting here, three of 
us from coastal States--that doesn't leave out Ohio, but it 
does focus on the coastal requirements that we have, and that 
is: just like any other infrastructure problem, is a flood a 
natural disaster and its consequences affecting the lives, 
well-being, the economy of those areas, whether it is in Ohio 
or along the Mississippi River, or wherever it is? Is that 
different than the depletion of the sand that attracts people 
to the shore communities upon which so many are dependent for 
their livelihood?
    So I see them very much as the same kind of problem, and I 
think that we should respond to flood threats and I think we 
should respond to the elimination of an economic opportunity in 
the coastal communities.
    So I sound that theme and will continue to do it as long as 
I am here, and I hope that we will be able to feel more 
comfortable about its continuation.
    We have something in place if this bill passes. Change the 
formulas a little bit, but I think we have arrived at a 
compromise that is fair to the States--fair warning, certainly.
    [The prepared statement of Senator Lautenberg follows:]
 Prepared Statement of Hon. Frank R. Lautenberg, U.S. Senator from the 
                          State of New Jersey
    Mr. Chairman, thank you for holding this important hearing today. I 
am pleased to be a cosponsor of the Water Resources Development Act of 
1999, one of the most important public works measures before the 
Senate.
    I applaud you, Mr. Chairman, for bringing this matter so quickly to 
the committee for consideration.
    This legislation includes authorizations for numerous water 
resources projects critical to my state.
    Three shoreline protection projects--which will protect property, 
wildlife habitat, and contribute to New Jersey's coastal economy--are 
authorized to proceed to construction in this bill.
    Mr. Chairman, I am also pleased that this committee has addressed a 
serious policy disagreement with the Administration over funding for 
shore protection projects.
    For the past 5 years, the Administration has requested no funding 
for new shore protection studies and has underfunded the construction 
work of ongoing projects.
    Last year, the Administration proposed modifying the cost-share for 
shore protection projects to require the states and localities to 
finance the majority--65 percent, of the costs of periodic 
renourishment.
    This activity is the most expensive portion of the project, since 
these projects generally receive renourishments approximately once 
every 3 to 5 years over their 50-year lifetime.
    I disagreed with this approach because I believed that it was 
unfair to those communities that had planned long and hard for these 
projects, on the expectation of a true partnership with the Federal 
Government.
    During the consideration of this bill in committee last year, I 
offered an amendment to allow us to phase in a more reasonable cost-
sharing formula for shore protection projects.
    Those projects which have a feasibility study completed by the end 
of 1998 (and now, 1999 in our new bill) or which are authorized to 
proceed to construction in this bill, will continue to be covered by 
the 65/35 cost-share formula through the life of the projects, just as 
all flood control projects are cost-shared.
    Those projects authorized subsequently will continue to receive the 
65/35 cost-share formula for the initial construction. However, States 
will be required to provide 50 percent for periodic renourishment.
    While I was disappointed that we could not maintain the current 
cost share for all projects, I believe that the committee's proposal is 
fairer to the communities and States that have planned for these 
projects.
    We have authorized many shore protection projects that have only 
moved forward because of the efforts of Congress. I sincerely hope that 
our action today moves the Administration forward to begin planning and 
budgeting for these projects.
    The bill also provides necessary authorization adjustments for 
projects critical to the movement of cargo through the Port of New York 
and New Jersey as proposed by Senator Moynihan and me.
    The port, which annually handles 1.4 million containers and 30 
billion gallons of petroleum products, is the gateway to a thriving 
economy for New Jersey, New York, and the entire country. By the Year 
2010, experts predict that 90 percent of all liner freight will be 
shipped in containers.
    The bill's amendments are important to addressing the increasing 
cost of dredged material disposal in light of the moratorium on ocean 
disposal.
    Mr. Chairman, the State of New Jersey, local governments and 
regional authorities have been carefully planning and budgeting for the 
critical projects that this bill authorizes.
    Any further delays could have an adverse impact on the economies of 
regions that are affected by these projects. I hope that we can move 
quickly to report this bill out of committee.
    I'm also looking forward to discussing the Corps' proposed budget 
for Fiscal Year 2000 with Dr. Westphal. I believe that this budget has 
a lot for New Jersey's ports and I'm pleased that both the Kill van 
Kull project in the north, and the Delaware River project in the south, 
are adequately funded.
    Thank you.

    Senator Lautenberg. Dr. Westphal, it is good to see you 
here.
    We start out with the bipartisan agreement that I think the 
Administration has gone halfway on an issue which we've 
disagreed with you in the past, yet this year again we see no 
funding proposed for new starts for shore protection projects. 
Why would you say these projects were not included?
    Dr. Westphal. Well, I think that the Administration's 
proposal initially, in the bill last year, was to hopefully be 
able to recoup some savings from the change in the cost share 
on the beach nourishment projects and use that additional 
resources to fund projects.
    Since WRDA didn't pass, we didn't put those in the budget. 
We didn't put projects like that in the budget. We hope that if 
WRDA passes this year that we will be able to, in the 2001, 
begin to budget for them, and we expect to do so.
    Senator Lautenberg. What's your opinion on the compromise 
that the committee reached last year on the water resources 
bill?
    Dr. Westphal. Well, I personally think that we need to 
arrive at least at compromise. I personally believe that one of 
the problems in funding these projects is really that they 
require a lot of money, and when they compete with flood 
protection and navigation and some of the other also important 
areas that we're working, the resources required around the 
Nation to do beach renourishment are simply not there.
    And so by changing the formula we felt that we could use 
those cost savings to budget more in this area than we ever 
have in the past, or before the Administration's new policy.
    So I'm hopeful that Congress will move forth on the shore 
protection and move forth on the WRDA bill and we can get this 
policy change.
    Senator Lautenberg. So is it fair to say that you think 
that this is a reasonable approach?
    Dr. Westphal. I believe that it is reasonable. Yes.
    Senator Lautenberg. It would be good to have your help.
    The budget for construction, $1.25 billion, contrasts 
sharply with last year's request of less than $800 million, and 
I'm pleased that you recognize the need for more funding in the 
area. To what do we owe this surprise?
    Dr. Westphal. Well, Senator, I think the Administration 
took a long, hard look at our program this year, perhaps 
focusing more on the need to not only maintain our 
infrastructure but to take care of some of the backlog that we 
had there, so on the O&M side we went way up. And on the 
construction side, we felt it was really also time to move some 
of the projects that have been studied and ready to go forth, 
to move them at a more-aggressive pace.
    We wanted to make sure that--you know, one of my goals and 
the goal of the Administration and the folks at OMB and other 
places was to come up with a budget that is reasonably close to 
what you have appropriated in the Congress in the last 2 years. 
The problem was that we were coming up with a budget much 
smaller than that. And I think that was a goal that we wanted 
to achieve, and we achieved it this year.
    Senator Lautenberg. Well, you know, my time is up, but you 
know, Dr. Westphal, that these are important programs for the 
States, and there isn't a State in the country that doesn't 
have some call for assistance in these natural disaster/natural 
resource areas. Whether it is the deepening of the harbor to 
keep us competitive, not just--we don't want to be competing 
with one another and dig faster and deeper, but we do have to 
recognize that therein lies enormous economic opportunity and 
we have to do what we can to protect the infrastructure that 
was built around these harbor and these port activities in the 
past.
    Mr. Chairman, I thank you very much.
    Dr. Westphal. Senator, you are leaving a big void. I was 
personally very saddened to know that you decided not to come 
back to the Senate in the next cycle.
    Senator Lautenberg. That's very kind.
    Dr. Westphal. I wish you well, and I have enjoyed working 
with you and will enjoy working with you the remainder of your 
term here.
    Senator Lautenberg. That makes you a crowd of one.
    Dr. Westphal. I don't think so, Senator.
    Senator Lautenberg. Thank you very much. I appreciate it.
    Senator Chafee. Senator Graham.
    Senator Graham. Mr. Chairman, I would like to be the second 
in that crowd expressing those same feelings.
    Senator Chafee. I'll join in that, too.
    Senator Graham. Now we're up to three.
    Senator Lautenberg. Thank you.
    Senator Voinovich. Make it four.
    Senator Graham. Senator Lautenberg has been an effective 
advocate for a wide range of issues important to the 
environment and the continued development of America's 
infrastructure, and he will be sorely missed. I hope that he'll 
spend lots of time with his grandchildren, who happen to live 
in Florida.
    Mr. Chairman, I assume that if we have some additional 
questions we can submit them in writing?
    Senator Chafee. Sure. Actually, we've got some time here, 
so why don't you just go ahead and I'll give you 5 minutes, and 
then we'll have a chance for another round here if you'd like.
    [The prepared statement of Senator Graham follows:]
  Prepared Statement of Hon. Bob Graham, U.S. Senator from the State 
                               of Florida
    Mr. President, I would like to take this opportunity to make some 
remarks regarding S. 507, the Water Resources Development Act 
introduced by Senator Warner on Monday, March 1, 1999 and the 
President's budget request for the Energy and Water Appropriations 
bill.
    Both of these pieces of legislation are of vital importance to 
Florida. In particular, several provisions in each bill will support 
the restoration of the Everglades, one of the Nation's most precious 
ecosystems. 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, man-made changes to the region's water flow have 
provided important economic benefits to the region, but have also had 
devastating effects on the environment. The Federal Government and the 
State of Florida have begun a long-term partnership to restore this 
ecosystem and preserve it for future generations. The actions we are 
considering today will support this partnership.
    In the Fiscal Year 2000 Energy and Water Appropriations bill, the 
President requested a total of $129 million in support of Everglades 
restoration. Of particular interest to me are funds to support the 
Kissimmee River restoration which will refurbish the headwaters of the 
Everglades watershed. I initiated work on this project as Governor of 
Florida in the 1980's and have been supporting its progress since that 
time. Congress authorized this project in WRDA 1992, and since that 
time the State of Florida has already expended approximately $95 
million in land acquisition and restoration evaluation. The State has 
met all of the schedule requirements. I am pleased to say that with the 
support of Congress last year in the appropriations process, this 
summer the Army Corps will begin initial construction on schedule. The 
Fiscal Year 2000 funding request before us today from the Army Corps 
funds will keep this project on schedule.
    The WRDA 1999 bill includes several items related to Everglades 
restoration. Before I highlight these projects, I would like to first 
thank my colleague Senator Mack for his partnership in our efforts to 
produce a WRDA bill that reflects the needs of our State. I would also 
like to thank Senators Chafee, Baucus, and Warner for their leadership 
last year on this critical piece of legislation. I am looking forward 
to working with you, Senator Voinovich, on the 1999 version of the 
Water Resources Development Act.
    First, the WRDA 1999 bill includes an extension of the ``critical 
projects'' authority provided to the Army Corps for Everglades 
restoration in 1996. The critical projects authorized in WRDA 1996 have 
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 extension in WRDA 1999 will allow for 
completion of already authorized projects.
    In addition to this extension, the WRDA 1999 bill includes a $27 
million authorization for the Hillsborough and Okeechobee Aquifer 
Storage and Recovery Project. This technology is presently used to 
create subsurface reservoirs for drinking water. The Army Corps is 
considering the use of Aquifer Storage and Recovery as a water storage 
technology for use in long-term Everglades restoration. Our action to 
authorize work on this project will allow early evaluation of the 
viability of this technology.
    Finally, the WRDA 1999 bill includes clarifying language to make 
expenditures by the State of Florida for land acquisitions in the 
Caloosahatchee River basin eligible for Federal reimbursement if they 
are identified as part of the Restudy when it is released in July 1999. 
Our action assures Florida that acquired lands which become part of the 
Restudy will be eligible for Federal reimbursement.
    Those of you who have been following restoration of the Everglades 
will notice that what is not included in WRDA 1999 is the ``Restudy'' 
which some of you may remember this committee authorized in 1996. On 
July 1 of 1999, the Army Corps of Engineers will submit an Everglades 
restoration plan to Congress, termed the ``Restudy'' by the Water 
Resources Development Act of 1996. This plan reviews the original 
Central and South Florida Flood Control project which was initiated in 
the 1940's by the Army Corps and was the source of the ecosystem 
manipulation that occurred in Florida since that time. The Restudy 
outlines the basic elements of a plan to restore the Everglades as 
closely to their natural State as possible. This is a difficult and 
complex task since the original area of the Everglades was reduced by 
50 percent with the development of both coasts with large metropolitan 
areas.
    This will be an expensive project whose costs will be shared on a 
50-50 basis with the State of Florida. There has never been a 
restoration project of this size in the history of the United States or 
the world. This is an opportunity to preserve a national treasure that 
was destroyed by our own actions in the past. This plan will restore an 
adequate water supply for the State of Florida, which is vital given 
that our population is expected to increase from just over 6 million 
people today to 8 million people by 2010. Without this plan, the urban 
residents in the State of Florida, the treasured environment of the 
Everglades, and the agriculture industry in this portion of the State 
will face extreme water supply conflicts.
    The Army Corps of Engineers has done a superb job in meeting the 
deadlines set forth by Congress in 1996 for this ambitious project. In 
WRDA 2000, this committee will play the key role in the Senate in 
determining the future of this important restoration program. I 
encourage any of you to contact me should you have any questions 
regarding the Restudy or the role of the Army Corps of Engineers in 
this project which is so important to Florida and the Nation.
    I am looking forward to our discussion today on both the Energy and 
Water Appropriations request for Fiscal Year 2000 and WRDA 1999--two 
pieces of legislation that are of vital importance to my State. Thank 
you.

    Senator Graham. I have some questions that are fairly 
specific, and----
    Senator Chafee. Fine. Well, you go to it. You've got your 
time.
    Senator Graham. I'd like to make some comments about the 
issue that has already been discussed, and that is the coastal 
protection issue. Your very succinct answer to Senator Warner's 
question about the effect of Congress passing a 50/50 
allocation for construction and long-term maintenance of these 
coastal protection projects was very encouraging, and I think 
will get a lot of impetus to getting the 50/50 cost share 
enacted.
    It has been my feeling that, in addition to the cost share, 
that there were some other steps that needed to be taken in 
terms of the Federal/State relationship for coastal protection, 
and those involved issues of establishing prioritization of 
need for coastal protection projects, the issue of an assured 
non-Federal share for the financing of those projects, and an 
ongoing responsibility of a credible non-Federal agency for the 
management of the projects.
    I'm not going to ask you at this point if you have any 
specific thoughts in that direction, but I would say that I'd 
look forward to working with you to see if, not necessarily in 
this WRDA bill--in fact, definitely not in this WRDA bill, but 
in the one that I anticipate will come in the year 2000, if we 
might be able to work toward some of those structural issues in 
the Federal/State relationship on coastal protection.
    Dr. Westphal. That's a very good idea, and I look forward 
to working with you on that.
    Senator Graham. Good. Fine. Thank you.
    I want to say, Mr. Chairman, that I've had the opportunity 
of working with Dr. Westphal in the past in several of his 
previous lives, and this Administration chose very wisely in 
asking him to take on this important responsibility with the 
U.S. Army and the Corps of Engineers, and I'm certain that 
we're going to find that the skills that he has demonstrated in 
the past will be very valuable and very constructive in our 
congressional relationship with the Corps.
    Dr. Westphal. Thank you, Senator. That's very kind.
    Senator Graham. Now we're going to get down to the tougher 
questions, Doctor.
    Dr. Westphal. OK.
    Senator Graham. I was concerned last year on one of the 
aspects of the Everglades project, which was the Kissimmee 
River, that we started the year with a number, which was $27.3 
million, as to what the next year's costs were going to be, and 
we advocated strongly for that number, and then we found out, 
in the middle of the process, that there were some funds that 
weren't going to be expended, and so therefore the fiscal year 
1999 cost was considerably less than $27 million.
    I'm pleased that we were being frugal, but it affects 
credibility when it appears as if you may be overstating your 
case and then can fall back, in this case fall back by almost 
$20 million. So my first request is: if there is going to be 
adjustments in the numbers, let's try to do them as early in 
the process as possible so that we are all allies in this 
effort to save the Everglades and that we don't inadvertently 
affect the ability of our allies to be part of the effort to be 
successful.
    Having made that editorial statement, how much of the funds 
for the Kissimmee River restoration will be obligated by the 
end of 1999? That is, of those funds which have been 
appropriated in fiscal year 1999 and previous years, how much 
will be expended by September 30, 1999?
    Dr. Westphal. We are very certain that 100 percent of those 
funds will be obligated this year.
    Senator Graham. Last year the final figure that you 
received was $8 million, which, in conjunction with some carry-
over funds, were represented as being sufficient to continue 
the project on schedule. Is that going to be realized in 1999? 
That is, will the project be continued as scheduled?
    Dr. Westphal. Yes, Sir.
    Senator I have with me also Michael Davis, who is my Deputy 
Assistant Secretary, who has done not only a great job, but an 
extremely difficult job of managing for us the entire project 
down there, which, as you know, is a number of projects built 
into one. And, as I usually have to say to folks from other 
parts of the country who sometimes ask us about the Everglades 
and why we are spending so much money there, when the Corps 
first initiated these projects back in the 1940's--I can't 
remember the exact populations. Maybe Michael will remember. 
The population of Florida was about 500,000 people at the time.
    Senator Graham. It's a little bit of an understatement. It 
was approximately two million.
    Dr. Westphal. I mean two million. I mean the Miami area, I 
guess, was----
    Senator Graham. Would have been probably 600,000 or 
700,000.
    Dr. Westphal. OK. That's the figure I was thinking about. 
And today it is how many million today? About five or six 
million today, and expected to grow to almost three times that 
much.
    So these projects are of extreme significance in terms of 
every aspect, not just the environmental restoration that we're 
doing, and it is so important to the Nation, as a whole, but 
the other aspects of it, which include water supply and water 
quality issues and so on.
    So in some of your questions I may ask Michael to address 
them, since he has been so intimately involved in this, to make 
sure we give you the right answer.
    Senator Graham. You are doing God's work, and I encourage 
you to continue to go out and evangelize on that effort.
    Secretary Babbitt recently announced his intention to 
create a scientific review panel to comment on the development 
and implementation of the Corps' restudy of the Everglades. 
What role do you see the Corps playing in this process of 
scientific review of your restudy?
    Dr. Westphal. Well, we will be intimately involved with 
that. In fact, I spoke with Secretary Babbitt yesterday about 
this very issue. We are keeping in touch. We communicate 
regularly on it. He is very supportive of us playing a major 
role in this, so we plan to be intimately involved.
    I don't know if you want to add anything to that, Michael.
    Mr. Davis. Senator, the one thing that I would add is that 
I think it is very important that we have had independent 
scientific peer review anticipated and built into the restudy 
process from the very beginning, so that has been part of it. 
Dr. Westphal and I were involved with Secretary Babbitt in 
formulating or expediting this scientific team that we're 
trying to put together now, and we'll be a very integral part 
of that as a member of the task force that will oversee the 
team.
    Senator Graham. Thank you very much.
    Mr. Chairman, I will submit some questions in writing.
    Senator Chafee. Fine.
    I think we will have a chance, if you wish, if you are able 
to stay--I've got some questions in the Everglades, too. I'm 
deeply interested.
    Senator Crapo.
    Senator Crapo. Thank you, Mr. Chairman. I have no questions 
at this time.
    Senator Chafee. All right. Well, I'd like to pursue, if I 
might, Mr. Secretary, the line of questioning began by Senator 
Graham.
    As I understand it, in your budget justification you State 
that $129 million has been set aside for the Everglades 
restoration, and I'm curious about that. How are you going to 
spend the $129 million?
    Dr. Westphal. OK. Well, we expect to spend about $21 
million of what we proposed for what we call the ``critical 
projects''--a lot of small projects, about $21 million there. 
On the Kissimmee River it is about----
    Senator Chafee. Just going back on that so-called 
``critical projects,'' these are ones we authorized back in 
1996?
    Dr. Westphal. Yes.
    Senator Chafee. So finally we are going to go ahead with 
them?
    Dr. Westphal. Well, they have been ongoing.
    Senator Chafee. OK.
    Dr. Westphal. And this is the 2000 year funding.
    Senator Chafee. All right. Keep going then, if you would, 
please.
    Dr. Westphal. And then $39 million for the Kissimmee River 
restoration project, and then $48 million, almost $49 million--
$48,813,000 for the restudy work this year. And so those are 
the three major elements of that $129 million.
    Senator Chafee. Now, I saw that ``New York Times'' 
editorial, which was a little bit on the sour side, of March 8, 
which is just this week. Do you have any comments on it? As I 
understood that editorial, the objection was that the focus was 
on water supply for the urban and agricultural communities, 
rather than water delivery and water quality, the water quality 
improvements for the Everglades. What do you say about that?
    Dr. Westphal. Well, it's not necessarily a fair 
characterization.
    Senator Chafee. I must say I agree with the conclusion of 
the editorial where it says, ``This is a very, very difficult 
job and a thankless job to try and solve this problem.''
    Dr. Westphal. The primary aim is still the environmental 
restoration piece, but we are, by law--I think it is by law--to 
also look at the water supply part of this.
    The article refers essentially to the first draft report 
that was issued on this, which is a report that was vetted to 
the public. We now have produced a final report, and that 
report is ready to go forward, also to be vetted, and we're 
working with the other Federal agencies and the State on that, 
and we think we have a pretty good report going forward and 
expect to release it in July.
    I don't know if you want to add anything outstanding that, 
Michael?
    Mr. Davis. Mr. Chairman, if I could just add a couple of 
points----
    Senator Chafee. Have you had a particularly close role to 
the Everglades, Mr. Davis?
    Mr. Davis. Yes, Sir.
    Senator Chafee. Yes.
    Mr. Davis. I think it is very important to understand--and 
the article didn't recognize this--that the overarching 
principle has been ecosystem restoration, and the Corps and our 
partners, that has been unequivocal in our commitment to do 
that.
    It's not the Corps' plan. The Corps has a leadership role, 
but the plan was actually put together by scores of scientists 
and engineers and hydrologists from all Federal agencies 
involved, the State of Florida, the water management district, 
and others, so it is really not the Corps' plan. It really is 
an inter-agency, interdisciplinary team's plan that has been 
subject to extensive peer review at this point.
    We think we do have a very good plan, but it is also very 
important to understand we have a very flexible plan, and, to 
the extent that new information is brought out and we can make 
adjustments to this plan, we designed it that way. So we're 
very comfortable with what we have right now.
    Senator Chafee. Well, it is a very difficult job. I suppose 
involved with all this is the State of Florida, likewise, and 
the Governor.
    Mr. Davis. The State of Florida is an equal partner here. 
They are cost-sharing this project at a 50/50 ratio.
    Senator Chafee. Switching gears a little bit here----
    Senator Graham. Mr. Chairman, if I could?
    Senator Chafee. Yes.
    Senator Graham. It is my understanding that the final 
report of the restudy, which was authorized in the 1996 WRDA 
bill, will be submitted this summer and will probably be 
included in the 2000 WRDA bill for purposes of authorization.
    I would hope that some time between the summer and when we 
take up the next WRDA bill that we'll have an opportunity for a 
full hearing on this restudy.
    Senator Chafee. I think so. It is a subject of tremendous 
interest--obviously deep interest to you. If that's what you 
wish, sure, we'll be glad to do that, work it out.
    Just a quick question going back to the user fees. Did I 
understand that you tried to ascertain what took place in 
foreign ports but just found it a maze that you couldn't fight 
your way through? Is that about it?
    Dr. Westphal. We got some data. We went mainly to European 
ports. We looked at some ports in Asia, as well, to get 
information not only on their fees, their port fees, but also 
to understand what types of taxes and fees they use to maintain 
their ports.
    In some cases, we were able to get that information and we 
will be able to provide it as part of our impact analysis. In 
some places, we just couldn't get it. They wouldn't release it.
    But, generally speaking, we were able to make some 
comparisons between what some of the major European ports are 
doing and what we are proposing in this fee.
    Senator Chafee. My time is up.
    Senator Voinovich.
    Senator Voinovich. In terms of getting all of this work 
done on the user fee, when do you anticipate it will be done?
    Dr. Westphal. We think that the interagency review is 
almost done. Once all that input comes in, probably a week or 
so, maybe 2 weeks from today to sort of fix all of that, 
incorporate any changes that are being proposed by the other 
Federal agencies involved, like Treasury, for example, and then 
be ready to bring it forth to hopefully initially committee 
staff and yourselves and then the stakeholders, as well, and 
release it.
    The way it will come to you, I cannot--I have no idea 
exactly how that will be packaged as it comes to the Congress. 
It is a decision that is still sort of working in the White 
House, and I don't have an answer for that. But we don't intend 
it to be a part of WRDA.
    Senator Voinovich. Do you have a vehicle where you sit down 
with the users before you send that over here to kind of get 
their feeling, so that if there are some concerns about it they 
are worked out before it comes here?
    Dr. Westphal. Well, we felt that--we did that initially 
with the stakeholders. We had a very extensive set of meetings 
with them. We continue to receive input. We asked for input in 
writing, as well, and we incorporated that in our impact 
analysis.
    So I think we have addressed most of their concerns, but we 
do want to let them have the proposal ahead of time, as well, 
so that they have a chance to look at it and, should there be 
any glaring issues that we can address quickly, we'll do that. 
But I think the next step is in your house here for it to be 
addressed here.
    Senator Voinovich. And you need the money to begin flowing 
for your fiscal year 2000?
    Dr. Westphal. Yes. Now, the existing fund has a balance. 
The existing fund has a balance, and we continue to collect 
money on the import side under the harbor maintenance tax. Once 
this fee is adopted, the harbor tax will be repealed and the 
balance of the fund will be transferred over to the Harbor 
Services Fund we are proposing here. So there is money in the 
fund from which to appropriate for this purpose until we----
    Senator Voinovich. So 1999 is OK?
    Dr. Westphal. Yes.
    Senator Voinovich. You've got a carry-over next year, and 
then----
    Dr. Westphal. Yes.
    Senator Voinovich [continuing]. You anticipate you'd 
collect about $200 million in fiscal year 2000?
    Dr. Westphal. In fiscal year 2000 we would need to collect 
about $200 to $300 million.
    Senator Voinovich. Mr. Chairman, could I continue?
    Senator Chafee. Yes.
    Senator Voinovich. One of the things that I'm concerned 
about as I look at the Federal bureaucracy is the incidence of 
your sitting down with EPA and Interior and looking at your 
respective responsibilities and looking at how they could be 
better coordinated and how you can work together. Does that go 
on?
    Dr. Westphal. Yes. Extensively. And more so--and I've 
worked in other Administrations, and it has worked more so 
under this Administration than I've ever seen before. I 
regularly speak with my counterparts at EPA, Interior. When I 
talk to my district engineers and division commanders out in 
the field, they are constantly in direct communications with 
their counterparts at the regional level.
    And I think the level of cooperation there between our 
agencies is excellent. I asked one time, when I first came on 
board, if they could do a little survey of all the district 
engineers--we've got 38 districts around the country--which 
other sister agencies of the Federal Government they were 
having difficulty in communicating with or having a positive 
relationship in terms of solving people's problems and 
addressing them in a timely manner, and the answer I got back--
I think it was a pretty honest answer--was that yes, we've got 
a problem here and there occasionally on some issue because we 
simply don't agree, but, generally speaking, almost in every 
corner of the country in all those 38 districts relationships 
were very, very good with Fish and Wildlife, with EPA, and with 
other Interior agencies that they tend to deal with.
    Senator Voinovich. How about State agencies?
    Dr. Westphal. The same thing. I mean, the States are 
integral partners in this. They often cost-share, obviously, 
our projects. And more and more we are relying on the States to 
be equal partners in this.
    We've got some areas where I have been particularly 
insistent that we need to help the States where they don't have 
the resources or the expertise or the capability, help them not 
by directing them but by actually supplementing them, by giving 
them the assistance that they need so that they can carry out 
their proper role in government.
    What I mean by that is that, for example, when you're 
talking about, say, in our regulatory program, wetlands 
program, that we are able to assist the States so that they can 
best manage the development and the planning aspects of their 
communities without us having to get into that role at all, 
which is not an appropriate role for the Federal Government, to 
help the State agencies to do this by being good partners with 
them and giving them the assistance that they need, and I think 
we're getting that in most places.
    Senator Voinovich. One of the things that is kind of 
disturbing to me is we have, on Lake Erie, an erosion 
protection effort that, in order to dump any hard fill, to 
protect property from being eroded you need a permit from the 
Army Corps of Engineers. We have a new thing where you've got 
to get a permit also from the State of Ohio. We're doing what 
we can to make sure that people don't build in areas where 
studies show that you're going to have erosion, and also to 
make sure that when we dump hard fill that it is done properly.
    At the same time we're doing that, in some of the dredging 
efforts sand is being picked up and deposited out in the middle 
of Lake Erie, whereas, if there was better coordination, some 
of that could be used closer in to protect some of our beaches 
from disappearing on us.
    Dr. Westphal. I think that is an excellent example, and I 
may actually use that when I talk to General Van Winkle about 
what is going on on Lake Erie. But I think you're right. I 
mean, I think the State has to play the critical role there. I 
know you, in your former position, probably would agree with 
that, but that's essential that we provide and assist the State 
in being able to carry out its mission, without being an 
impediment, without using regulations, but rather try to, 
again, be of assistance.
    We have limited dollars in that the Corps, unlike our other 
sister agencies, is a project-funded organization. I mean, we 
are funded on the basis of projects, and so money comes to the 
Corps for specific projects and we don't have a pot of money 
that we can move from one area to another and say this year we 
want to emphasize ``A'' instead of ``B,'' and so we're just 
going to shift monies from ``B'' to ``A.'' We can't do that.
    Other agencies have that type of flexibility. We're not a 
grants agency and so we have to work on the basis of those 
projects that you have directed us to work on, and we try, as 
much as we can in our Planning Assistance to States program, to 
be that additional help. It's a small amount of money that we 
have in the budget, but we hope to be able to use it in a 
positive way.
    But I agree with what you are saying.
    Senator Chafee. All right.
    Senator Crapo.
    Senator Crapo. Thank you, Mr. Chairman.
    Mr. Westphal, I come from the Pacific Northwest, and I note 
in the President's proposed budget for this year there is $100 
million in construction funding for the Columbia River fish 
mitigation program.
    Could you give me a brief description of how those dollars 
are intended to be used?
    Dr. Westphal. Well, it is a variety. Probably I will have 
to get the more-detailed information to you separately, because 
I don't have it in front of me, but I know it to be a series of 
projects that essentially are our efforts, as in meeting the 
requirements of the biological opinion, to do what we can to 
protect the movement of the species up and down the river.
    Senator Crapo. But you don't have the details right now?
    Dr. Westphal. I don't have them with me, but I would be 
glad to provide it to you. I can give you a detailed assessment 
of that.
    Senator Crapo. I would appreciate that, because I'd like to 
have an idea of where the Corps intends to head with these 
resources because, as you know, this is a very significant 
issue----
    Dr. Westphal. It is.
    Senator Chafee [continuing]. To put it mildly, out in the 
Pacific Northwest.
    [The information follows:]


                         Project Cost Breakdown
------------------------------------------------------------------------

------------------------------------------------------------------------
Lower Granite...........................................      $3,160,000
Little Goose............................................       5,980,000
Lower Monumental........................................         460,000
Ice Harbor..............................................         410,000
McNary..................................................       9,570,000
John Day................................................      10,030,000
The Dalles..............................................       1,850,000
Bonneville..............................................       9,090,000
Mitigation Analysis.....................................      59,450,000
------------------------------------------------------------------------


    Senator Crapo. Specifically, I also note that in the 
legislation we are preparing we already have authorization in 
place for fish-friendly turbine development, and that we are 
looking at increasing the authorization for that because it 
looks like additional resources will be needed. Are you 
familiar with that authorization and with that project?
    Dr. Westphal. I'm familiar with that idea. When I recently 
took a trip out to the Northwest to look at the various 
projects out there, I went with the Corps. I was in Idaho on 
the Snake River and down the Columbia, and so I stopped at many 
of the projects and talked to the folks there about that 
particular issue and others, and so I'm a little bit familiar 
with the concept behind it.
    Senator Crapo. Do you have the ability to tell me now, or 
would you like to get back, just with regard to how the 
development of the fish friendly turbine is proceeding.
    Dr. Westphal. No, I couldn't. I don't have the answer to 
that, but I will be glad to get it for you.
    Senator Crapo. All right. I would appreciate that.
    [The information follows:]

    An experimental minimum gap runner (MUIR) is currently being 
installed in Unit 6 at Bonneville First Powerhouse as part ofthe 
Bonneville Dam rehabilitation project. The Corps will be testing the 
unit this fall/winter. The plan is to install the MGR units in all of 
the Bonneville First Powerhouse turbines during the remainder of the 
rehab. [A runner is the portion of the turbine that spins like a fan 
and to which the blades are attached. A Minimum Gap Runner is a runner 
design that almost eliminates gaps fish could enter when the turbine is 
operating. This is done by making the corners of the blades longer than 
those of traditional Kaplan blades, and milling out notches in the hub 
for the longer corners to fit into when the blades are tilted at a 
steep angle. The MGR also is a highly efficient blade design.]
    Further research will continue within the Turbine Passage Survival 
Program, which is examining the entire turbine environment.
    A 16-member Turbine Technical Working Group is composed of 
biologists and engineers from the National Marine Fisheries Service, 
the Corps of Engineers, the Department of Energy, Bonneville Power 
Administration, public utility districts, the Idaho National 
Engineering Laboratory and the Electric Power Research Institute. The 
group was formed specifically to share information and develop a 
coordinated approach to studying and solving turbine passage problems.
    The Turbine Passage Survival Program was developed by the Corps in 
coordination with the Technical Working Group. It is a three-year 
program to investigate short-term and long-term improvements to 
juvenile passage via the turbine route. The entire turbine environment 
is being studied. The project study plan was developed in coordination 
with related activities underway by other organizations (public utility 
districts, Dept. of Energy, Electric Power Research Institute and 
Bonneville Power Administration) to eliminate duplication, reduce cost 
and enhance the effectiveness of the Corps' turbine program. fiscal 
year 1999 funding for this study is $3.1 million and $2.5 million is 
requested in fiscal year 2000.
Other activities related to protection of migrating fish
    As noted in response to question 1, there is considerable activity 
underway and projected for future years for improving juvenile and 
adult fish survival at the eight mainstem Corps dams. In brief summary:
      Extended submerged screens installed in the juvenile fish 
bypass systems at Lower Granite, Little Goose, and McNary dams
      Surface collector prototypes being tested at Lower 
Granite and Bonneville dams
      Gas abatement through:

  flow deflectors installed at Ice Harbor and John Day,
  fast-track effort for additional near gas abatement, and
  long-term major configuration measures study 60 percent complete.

      Numerous miscellaneous measures, e.g. adult passage 
improvements, juvenile bypass system improvements underway.

      Major studies ongoing:
  Lower Snake River Feasibility Study (near completion)
  John Day drawdown study Phase I begun
  Turbine studies program (see above).

    Senator Crapo. And then, last, another big issue related to 
the entire salmon and steelhead recovery issues is the 
relocation of the Caspian turns from the mouth of the Columbia 
River. Are you familiar with that activity?
    Dr. Westphal. Yes.
    Senator Crapo. I note that we have $1 million authorized 
for that activity, but could you just give me whatever 
information you have and tell me how that is progressing and 
what we can expect to see out of that activity in the coming 
year?
    Dr. Westphal. Yes. I can tell you that we are working with 
EPA on that project, and what I don't have is an up-to-date 
status report on where we are with it, but I will be glad to 
include it in the three things I owe you already and get that 
to you as soon as possible.
    [The information follows:]

    The U.S. Fish and Wildlife Service (USFWS) and the National Marine 
Fisheries Service (NMFS), the agencies ultimately responsible for the 
management of the predatory populations, have requested our assistance 
in reducing bird predation in the Columbia River estuary. Accordingly, 
we are providing funding and are cooperating in a 1999 pilot program to 
relocate the Caspian Tern population located on Rice Island further 
downstream away from the vulnerable juvenile salmon. Initial seeding 
has been completed on Rice Island (to discourage nesting) and habitat 
improvements on East Sand Island should be completed next week. Further 
actions in fiscal year 2000 and beyond for the bird predators will be 
dependent on the results of the pilot program and upon subsequent 
management plans developed by NMFS and the USFWS.

    Senator Crapo. One last area, Mr. Westphal, is it is my 
understanding that there has been some cooperative effort 
between the Corps of Engineers and the Department of Energy 
with regard to some of the cleanup activities at particularly 
the site that I'm interested in at the Idaho National 
Engineering and Environmental Laboratory. Are you familiar with 
some of that activity on the Corps' behalf that is being 
undertaken there?
    Dr. Westphal. No, Sir, I'm not. I'm sorry.
    Senator Crapo. OK. I'll have to ask if you can get me some 
information.
    Dr. Westphal. I will do that. I apologize for that, but I 
don't know the details of that.
    Senator Crapo. All right. Thank you.
    Dr. Westphal. But we will get you that. I will get you that 
immediately, and within the next couple of days I will get you 
all that information.
    Senator Crapo. All right. I'd appreciate that. Thank you.
    Dr. Westphal. Sure.
    [The information follows:]

    The Walla Walla District has completed 16 months of cost 
engineering at the Department of Energy (DOE) Idaho National 
Engineering and Environmental Laboratory (INEEL), following up the 
Project EM assessments conducted at INEEL and other DOE sites during 
1996-1998. In the Project EM, the Corps reviewed the DOE multi-year 
cost and schedule baselines for cleanup of 13 major contaminated sites 
and identified $1.9 billion in overestimates, or potential cost 
savings. In the follow-up work at INEEL, the Walla Walla District team 
identified additional possible savings of $1.2 billion and assisted the 
DOE staff to implement a major recommendation of the Project-EM to 
convert their budget support documentation from level-of-effort 
estimates to the more reliable activity-based cost (ABC) estimates. 
Expressing satisfaction over the results of the Corps' work, the INEEL 
management asked Walla Walla District for a proposal to revise the 
remaining 250 sets of cost baselines through the rest of the fiscal 
year. However, the original funding from DOE headquarters for this work 
is nearly gone and no additional funds have been provided. INEEL has 
indicated they will use their contractors to finish converting the sets 
of cost estimates.

    Senator Crapo. I have no further questions, Mr. Chairman.
    Senator Chafee. All right.
    Mr. Westphal, before I go any further, I just wanted to say 
that I, along, I'm sure, with every member of this committee, 
share great admiration for the Corps of Engineers. We've seen 
the Corps work not only in this country but overseas.
    I'll never forget being in Saudi Arabia and hearing from 
the Saudis the high respect that they had for the Corps, which 
was doing some major construction work in some of those cities 
over there. They always relied on the honesty and 
professionalism--they did, to a great degree, rely on the 
honesty and professionalism of our Corps of Engineers, and I 
think that is a great tribute to the United States that they 
dealt, obviously, with private contractors, but they had this 
tremendous respect for the U.S. Army Corps of Engineers. I 
found it very flattering to the United States and a wonderful 
tribute to the organization that you head up.
    Dr. Westphal. Yes, Sir.
    Senator Chafee. Now, apparently the Administration has 
decided to end the practice of providing general revenues for 
construction of the deep draft harbors, and, as I understand 
it, the operation and maintenance of these facilities is going 
to be through this fee business you've got, but construction, 
as I understand it currently, is cost-shared on another system 
based on the depth of the channel and so forth.
    Now, in other words, are you now shifting the construction 
costs, along with the operation and maintenance, over to the 
user fees, likewise?
    Dr. Westphal. Yes.
    Senator Chafee. In other words, is it all going over to the 
user fees?
    Dr. Westphal. That's right. The Federal portion of it, the 
Federal share of the construction, could be now funded under 
the harbor services user fee proposal. We just simply believe 
that these harbor projects are so important to the Nation's 
trade posture that, by putting them in as part of this fund, we 
are essentially protecting that area of spending somewhat. We 
realize it is obviously up to the Appropriations Committees to 
make that final judgment, but we believe that, by doing that, 
we will have the resources necessary to maintain our harbors 
competitive around the world.
    Those projects will be able to be fully funded at an 
optimal schedule, meaning they will be on schedule as they 
proceed, so we believe that that's a better way of doing it 
than relying simply on the General Fund on the construction 
side.
    Senator Chafee. Well, I must say you're putting a lot of 
faith in these users fees, and we'll just have to see how that 
shakes out, but that is all to come, and you're going to polish 
that up and then come forward with your suggestions.
    Dr. Westphal. Yes, Sir.
    Senator Chafee. All right.
    Senator Voinovich.
    Senator Voinovich. And that proposal will come to this 
committee? That's not just going to go to Appropriations, the 
language that you would tuck into appropriations?
    Dr. Westphal. No. It won't be--to my knowledge, no, I don't 
think it will go to Appropriations, but how it will be packaged 
I don't know.
    Senator Voinovich. But it will come to this committee?
    Dr. Westphal. I would assume that the committee will deal 
with it. Yes, Sir.
    Senator Voinovich. I think that I'd like to see it----
    Dr. Westphal. I don't know, for example, on the tax part, 
whether the Finance Committee would have to get involved 
because it calls for the repeal of the tax, so I imagine there 
will probably be some joint disposition of the proposal between 
this committee and Finance.
    The mechanism for triggering the funding is--in other 
words, the triggering of the funding has to be done, obviously, 
by the appropriators in consultation with this committee.
    Senator Chafee. Senator, have you got some more?
    Senator Voinovich. I have no other questions.
    Senator Chafee. All right. Well, obviously this harbor 
services fee is a great big item here, because, as we mentioned 
before, it is a substantial portion of your budget and it is 
going to go into the areas that so many of the members of this 
committee are deeply interested in--namely, their ports. So 
we'll see what you come up with and look forward to further 
work with you, and when you get the thing ready we'll get you 
back up here again.
    Dr. Westphal. OK, Sir.
    Senator Chafee. OK. Fine. Thanks a lot, Mr. Secretary. 
Thanks, Mr. Davis.
    Dr. Westphal. Thank you, Senator.
    Senator Chafee. We appreciate your coming up.
    Dr. Westphal. Thank you.
    [Whereupon, at 10:56 a.m., the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statement submitted for the record follows:]
 Prepared Statement of Hon. Daniel Patrick Moynihan, U.S. Senator from 
                         the State of New York
    My great thanks to Assistant Secretary Westphal for indulging us 
again on the Water Resources Development Act of 1998, now 1999. With 
the capable leadership of our Chairman Senator Chafee, Senator Warner, 
Senator Baucus, and Senator Voinovich, we might well convince our 
friends in the other body that this legislation must be passed. And not 
a moment to soon.
    Since the first Water Resources Development Act in 1986, when we 
introduced rational economic criteria and equitable cost-sharing to the 
Federal water planning process, we have witnessed nothing short of a 
quiet revolution in the development of water resource projects. Much 
credit for that success is due to the professionalism of the Army Corps 
of Engineers. My friends on the committee who were here with me then 
will agree that the free-booting days when the Subcommittee Chairman 
got two dams, the Ranking Member got one, and everyone else on the 
committee got a promise--are long over. For the past 13 years we have 
reviewed and accepted authorizations for projects in a responsible 
manner, and should be justifiably proud.
    The greatest problems with the WRDA process come only when we fail 
to reauthorize the legislation as we had in 1994 and then again last 
year. Projects are stalled. Costs increase. Three years have passed 
since we last passed WRDA legislation and it is time to move this bill. 
If we should need address WRDA again next year also, so be it. Our 
Nation's rivers, flood plains, and harbors can stand the attention.
    I would close my remarks by urging the Administration to get that 
Harbor Maintenance Tax proposal to us. While we all surely understand 
the difficulty in devising a proper and fair user fee for the 
maintenance of our harbors in light of the Supreme Court decision last 
March, our chances of establishing a sound, equitable policy diminish 
the longer the debate is forestalled.
                                 ______
                                 
     Prepared Statement of Joseph W. Westphal, Assistant Secretary 
                              of the Army
    Mr. Chairman and distinguished Members of the committee: It is an 
honor and a pleasure to testify before the committee on the President's 
Army Civil Works budget priorities for the year 2000, and on the 1999 
Water Resources Development bill.
    Accompanying me today is Mr. Michael Davis, my Deputy Assistant 
Secretary for Policy and Legislation.
    Let me begin by noting that the large differences between the 
Administration's budget proposal last year and what was appropriated in 
both fiscal year 1998 and fiscal year 1999 are now reconciled in the 
fiscal year 2000 budget I am about to outline.
    The President has consistently stressed two major themes that I 
think are particularly important to the way we should formulate and 
implement Civil Works policy. First, it must be based on building 
strong partnerships with our states and local communities as well as 
among our sister Federal agencies. Second, we must strive to help our 
economy grow and prosper by combining sound infrastructure management 
and development with environmental protection and ecosystem 
restoration. I believe our program excels in both of these mandates and 
that the budget I will present today reflects their importance and 
priority.
    I am pleased to say that funding in the President's fiscal year 
2000 budget supports a strong Civil Works Program. It is consistent 
with levels enacted by Congress in recent years, and with the 
President's overall domestic priorities, his commitment to a balanced 
budget, and his goal of protecting Social Security and meeting the 
challenges of the 21st Century.
    My statement covers the following subjects:

     The fiscal year 2000 Civil Works Program Budget,
     Water Resources Development Acts of 1999 and 2000,
     Civil Works Program Performance,
     The Harbor Services Fund Proposal,
     The Economy and Environment,
     New Investments, and
     Highlights of the fiscal year 2000 Continuing Program.

                   fy 2000 civil works program budget
    The President's budget for the Civil Works Program for fiscal year 
2000 includes $3.9 billion for the discretionary program, comparable to 
the amount appropriated for the program in fiscal year 1999, and 
significantly above last year's budget request. Details are presented 
in Table A.
    The Administration appreciates the significant commitments made by 
our partners, the non-Federal sponsors who cost-share studies and 
projects of the Civil Works Program. These commitments demonstrate the 
value of the program to the sponsors. With cost-sharing contributions 
and other funding, total funding for the fiscal year 2000 program is 
$4.2 billion. In fiscal year 2000, we will be asking non-Federal 
sponsors to contribute over $251 million as their cost share of 
projects throughout the Nation. They are our partners in this program 
and we are committed to a very responsive and timely allocation of 
resources to meet their efforts. I look forward to working with both 
Houses of Congress to meeting the challenges of this partnership.
           water resources development acts of 1999 and 2000
    I also want to emphasize our commitment to water resources 
development and the biennial authorization cycle. A strong water 
resources development program is a sound investment in our Nation's 
economic future and environmental stability. Communities across the 
country benefit from water resource projects to reduce flood damages, 
compete more efficiently in world trade, provide needed water and 
power, and protect and restore our rich aquatic resources. In this 
regard, we will work with the Congress to complete a Water Resources 
Development Act (WRDA) in 1999--building on the progress that we made 
last fall on the proposed WRDA 1998.
    As you know, the Army, on behalf of the Administration, submitted 
to Congress a WRDA proposal in 1998. We believe this proposal should 
serve as the basis for a WRDA 1999. The Senate version of WRDA 98 
included important Administration policy initiatives such as our 
Challenge 21 program, changes to shore protection policy, and 
improvements to our recreation program. We hope that, based on our 
bill, and then with the assistance of the authorizing committees, we 
can come to closure on a responsible WRDA 1999 early this year that 
includes important policy initiatives and vital projects, while 
recognizing the continuing budget constraints. This would put us in a 
better position to address new policy and project needs in a WRDA 2000 
bill that will include such important initiatives as the restoration of 
the Everglades.
    We appreciate your commitment to a WRDA 1999. The Administration, 
however, has concerns about the total cost of S. 507 and the impacts of 
authorizing a sizable number of new projects at this time in view of 
the existing backlog and continuing budget constraints. Each new 
project authorization adds to the already large existing backlog of 
Corps projects under or awaiting construction. Therefore, we urge this 
committee to limit the number of new project authorizations in its 
legislation, as we have done in our proposal, to reflect only those 
additional costs that one might expect to be able to fund within a 
reasonable timeframe.
    We are particularly concerned about authorizations which bypass the 
existing project planning and review process by authorizing and 
preauthorizing projects upon the issuance of a report by the Chief of 
Engineers. These provisions weaken the review responsibilities of the 
Secretary of the Army and the Administration, and for those 
authorizations which are ``contingent'' on a report of the Chief of 
Engineers weaken the study and review responsibility of the Army Corps 
of Engineers itself. Such authorizations would undermine the biennial 
WRDA process that has been the goal of Congress and every 
Administration since 1986. While there may be a compelling reason, on 
rare occasion, to expedite the authorization of an individual project, 
as the Administration proposed and the Congress accepted in the case of 
Grand Forks, ND and East Forks, MN, we believe that projects generally 
should await the completion of review by the Chief of Engineers, the 
Army, and the Administration before authorization.
    In addition, we are concerned about other provisions in S. 507, 
including those that would provide special exemptions from cost-sharing 
requirements, authorize projects based upon what may be outdated 
studies, or authorize projects that either are not economically 
justified or fall outside of the traditional missions of the Army 
Corps.
    The Administration appreciates this committee's support for those 
projects that have completed the normal planning, review, and approval 
process and the inclusion of some of our initiatives. We are optimistic 
that we can work with your committee to resolve our concerns in a 
manner that allows us to fully support S. 507.
                    civil works program performance
    The Government Performance and Results Act of 1993 (GPRA) requires 
that the Army Corps of Engineers show how improvements in its business 
processes impact the quality and delivery of our products and services 
to the Nation.
    The Corps is improving its business processes by streamlining 
decision document review procedures, eliminating duplication of 
functions at different levels; intensively monitoring policy review to 
reduce review times; extending the use of standardized project 
cooperation agreements; continuing to strengthen partnerships with 
local sponsors; and intensively managing program execution, for more 
efficient and timely production and greater customer satisfaction. In 
particular, the Chief of Engineers has developed a process to 
streamline project planning and I look forward to working with him on 
this.
    The Corps is currently implementing the first annual performance 
plan required by GPRA on its fiscal year 1999 program. The Corps is 
testing an initial set of results-oriented program performance measures 
to assess the benefits of process improvements made at the project 
level. The Corps will evaluate the initial set of results-oriented 
program performance measures during fiscal year 1999 program execution 
and will extend successful applications of the measures into the fiscal 
year 2000 program and continue to develop improved performance measures 
in the future.
                     harbor services fund proposal
    A key component of the President's fiscal year 2000 budget for the 
Army Civil Works program is the proposal for a new Harbor Services Fund 
and Harbor Services User Fee. This proposal will provide a reliable 
source of funding for important navigation needs including 
construction, operation, and maintenance. It results in significantly 
greater funding for these port and harbor activities. The President's 
budget for fiscal year 2000 includes $951 million to be derived from 
the Harbor Services Fund, an overall increase of $382 million over the 
President's fiscal year 1999 budget for harbor-related activities. This 
level of funding will allow us to proceed at an optimal rate on nearly 
all operation and maintenance and construction activities related to 
ports and harbors, using funds contributed by the users.
    In March 1998, the U.S. Supreme Court ruled that the Harbor 
Maintenance Tax (HMT) was unconstitutional, as applied to exports. In 
that ruling, the Court concluded that the HMT, which imposed a charge 
based on the value of the commercial cargo being shipped, constituted a 
tax on goods in export transit and therefore violated the Export Clause 
of the Constitution. Because of this ruling, the HMT stopped being 
collected on exports on April 25, 1998. The new Harbor Services User 
Fee being proposed avoids the constitutional infirmities of the HMT. 
The assessment is a user fee, not a tax: it fairly approximates the 
harbor benefits and services vessels in each vessel category received 
through port use. It is not imposed based on the cargo of a vessel.
    The user fees will generate funds sufficient to pay the Department 
of the Army's annual costs of developing, operating, and maintaining 
the Nation's ports. The legislative proposal will make the total amount 
of the user fees collected pursuant to this proposed legislation in 1 
year available the next fiscal year for appropriation to fund the 
projected total annual expenditures of the Department of the Army for 
harbor development, operation, and maintenance.
    Thus, this proposal will address all of the biggest problems 
associated with the existing Harbor Maintenance Tax and Trust Fund 
(HMTF). First, we will stop collections on imports, domestic shippers, 
and passengers collected under the existing HMT, eliminating the 
uncertainties involved with our foreign trading partners.
    Second, we would institute a new fee mechanism based on vessel type 
linking the fee with the level of service provided to certain types of 
vessels, which will meet the Supreme Court's test for 
constitutionality. Those fees would be placed in the new Harbor 
Services Fund (HSF), along with remaining balances from the old HMTF. A 
portion of those balances will be used to fund the program in the first 
year, fiscal year 2000.
    And third, the proposal will directly link the amount of fees 
collected with the funds appropriated, thus avoiding buildup balances 
in the HSF. For budget purposes, the user fees will be treated as 
offsetting collections.
    We are coming to completion on details of the proposal in light of 
discussions and comments from interested groups. We plan to present a 
legislative proposal to Congress in the near future. Our plan is to 
pursue the HSF legislative proposal separately from WRDA 1999.
                      economy and the environment
    The Administration is committed to the traditional mission areas of 
improving our navigation and transportation system, protection of our 
local communities from flood damages and other disasters, and 
maintaining and improving hydropower facilities across the country. In 
addition, the protection and restoration of the environment are an 
important and integral part of the Civil Works mission portfolio. The 
President has strongly advocated linking economic growth with 
protection of the environment. To help meet this objective, we will 
support projects that feature strong economic benefits, as well as 
projects that incorporate environmental restoration and enhancement. Of 
course, individual environmental restoration projects are also an 
important part of the Civil Works mission. These environmental 
objectives make the Army Corps an important participant in advancing 
the goals of the President's Clean Water Action Plan.
    An example of a program that will integrate environmental concerns 
into more traditional Civil Works missions is our Challenge 21: 
Riverine Ecosystem Restoration and Flood Hazard Mitigation Initiative. 
Like last year, this year's budget includes $25 M to begin the 
Challenge 21 program. It is designed to accomplish both flood hazard 
mitigation and ecosystem restoration and emphasizes nonstructural 
measures as a means to accomplish these objectives. Challenge 21 was 
proposed for authorization last year, and came close to becoming a 
reality in the proposed WRDA 1998. In fact, the Senate version of WRDA 
1998 included a Challenge 21 program. We will continue to work with 
Congress to pass this much-needed legislation. The key to this program 
is that it will be implemented at the request of local communities and 
not imposed as a solution by the Federal Government. To date, over 50 
communities have expressed interest in participating in Challenge 21.
    Environmental programs make up about 18 percent of the fiscal year 
2000 Army Civil Works budget, and are integrated into all of the major 
areas of work. Some environmental programs of note are in the following 
areas. There is $100 million in construction funding for the Columbia 
River Fish Mitigation program in the Pacific Northwest. There is $129 
million in overall funding for the ongoing effort in south Florida to 
restore, preserve and protect the Everglades. We have also budgeted $14 
million to fund our ongoing environmental restoration continuing 
authorities programs (Section 204, the Beneficial Uses of Dredged 
Materials program, Section 206, the Aquatic Ecosystem Restoration 
program, and Section 1135 Project Modifications for Improvements of the 
Environment). This funding will allow us to implement projects to 
create and restore aquatic habitats and to modify Civil Works projects 
to improve the environment.
    The Formerly Utilized Sites Remedial Action Program, FUSRAP, is an 
environmental cleanup program that was transferred by Congress from the 
Department of Energy (DOE) to the Army Civil Works program in the 
fiscal year 1998 Appropriations Act. We are continuing the smooth 
implementation of needed cleanup of contaminated sites, with no 
slippage of the program during the transition from DOE to the Civil 
Works program. In fact, we have exceeded the DOE schedules for the 
Middlesex, Maywood, and Wayne sites in New Jersey, and surpassed DOE's 
planned quantities of soil removed and disposed. This year's budget 
includes $150 million for this program, an increase of $10 million over 
the past 2 years. This will help improve the rate of cleanups of the 
sites.
                            new investments
    The fiscal year 2000 budget for the Army Civil Works program 
provides a strong program of new work. Details are presented in Table 
B.
    Our program of new work includes one new survey and 19 new 
construction projects, 5 new operation and maintenance new starts, and 
6 new Plant Replacement and Improvement Program (PRIP) major 
acquisitions, and the Challenge 21 program.
    The budget includes $80 million in fiscal year 2000 for the new 
investments in the construction account, including $55 million for new 
construction starts, and $25 million for Challenge 21. Capital costs 
for these new investments total $1.8 billion. Of that, $1.3 billion 
will be provided by the Federal Government. The balance, covering costs 
of lands, easements, rights-of-way, and relocations, will be financed 
directly by non-Federal sponsors.
    The 19 new construction projects include:
     5 for commercial navigation,
     3 for flood damage reduction,
     2 for environmental restoration,
     7 for major rehabilitation, and
     2 for dam safety assurance.
         highlights of the fiscal year 2000 continuing program
Operation and Maintenance, General
    The fiscal year 2000 budget for the Civil Works Operation and 
Maintenance, General (O&M) Program is $1.84 billion. This level of 
funding is very strong, demonstrating the Administration's commitment 
to maintaining our existing infrastructure, much of which is aging and 
requires greater upkeep. Of the $1.84 billion, $693 million would be 
for port and harbor activities, derived from the proposed HSF, 
including $75 million to maintain small boat harbors, important to the 
economies of local communities. In addition, operation and maintenance 
of hydropower facilities in the Pacific Northwest will be financed by a 
transfer of approximately $107 million from the Bonneville Power 
Administration, pursuant to an agreement signed 2 years ago.
    The budget also provides $226 million to continue the operation and 
maintenance of recreation areas at Civil Works projects.
Construction, General
    The fiscal year 2000 budget for the Civil Works Construction, 
General Program is $1.24 billion, of which $1.16 billion is for the 
continuing program. Of the total, $258 million would be for port and 
harbor construction projects derived from the Harbor Services Fund, 
allowing port related projects to proceed at optimal rates. This will 
enhance the competitiveness of our Nation's ports and harbors.
    Following are highlights of the Continuing Program.
    South Florida Ecosystem Restoration.--The Everglades is an 
ecosystem of international importance. It is also one that has 
dramatically deteriorated since the turn of the century. It is very 
important that we aggressively continue the work that we have underway 
to start the process of restoring this treasure that is so important to 
the Nation. Construction funding for these projects is $110 million for 
restoration of the Everglades and South Florida Ecosystem, a major 
environmental activity to which we are strongly committed. This amount 
includes $49 million for the Central and Southern Florida project to 
continue construction work at West Palm Beach Canal, South Dade County, 
and manatee pass-through gates, as well as planning, engineering and 
design work on the Comprehensive Restoration Plan, also known as the 
``Restudy''; $40 million to continue construction on the Kissimmee 
River Restoration project; and $21 million for critical restoration 
projects authorized under the Everglades and South Florida Ecosystem 
Restoration program.
    Pacific Northwest Salmon.-- The budget includes $100 million for 
Army Corps construction activities associated with the Columbia River 
Fish Mitigation project at 8 Corps dams on the Columbia and Snake 
rivers and to continue the mitigation analysis which evaluates 
additional measures to increase fish survival at those dams. This 
includes $59 million for studies of surface bypass facilities, drawdown 
of Lower Snake Reservoirs, John Day drawdown and hatchery mitigation, 
turbine passage, gas abatement, adult passage, and Lower Columbia 
configuration.
    Montgomery Point Lock and Dam.-- The budget includes $20 million 
for the Montgomery Point Lock and Dam project on the McClellan-Kerr 
Arkansas River Navigation System to continue construction of the lock 
and dam. The project is programmed to be financed entirely from the 
Construction account.
    Kentucky Lock and Dam, Kentucky.-- The budget includes $7.75 
million for the Kentucky Lock and Dam project on the Tennessee River to 
continue detailed design of the new lock and to relocate the Tennessee 
Valley Authority's power transmission towers at the project site. The 
addition of a new lock will greatly reduce delays at the existing lock 
which is too small to handle modern 15 barge tows without 2 lockages.
    Olmsted Locks and Dam, Illinois and Kentucky.-- The budget includes 
$28.6 million to continue construction of 2 new locks on the Ohio River 
near Olmsted, Illinois, to replace Locks 52 and 53 which are over 60 
years old. Virtually all waterway traffic moving between the Ohio and 
Mississippi Rivers passes through the project area, and both of the 
existing locks have temporary lock chambers that are inefficient. 
Projected increases in waterway traffic demands in combination with the 
limited capacity of the existing locks will result in increased lockage 
delays without the new locks.
    New York and New Jersey Harbors, New York and New Jersey.-- The 
budget includes $60 million for the Kill Van Kull and Newark Bay, New 
York and New Jersey, project to continue construction of the deepening 
of 5 miles of Kill Van Kull channels and 3 miles of Newark Bay channels 
from 40 to 45 feet. The deeper project will accommodate larger, fully 
loaded, more modern containerships. The budget also includes $2 million 
for the New York Harbor and Adjacent Channels, Port Jersey Channel, New 
Jersey, project. Deepening Port Jersey channel from 35 feet to 41 feet 
will accommodate larger, deeper draft, cargo ships.
    Los Angeles County Drainage Area, California.-- The budget includes 
$30 million for up grading the existing system, raising channel walls 
and converting the trapezoidal channel to a rectangular channel, and 
bridge modifications. These improvements would protect residential, 
commercial, and industrial properties in Long Beach by accommodating 
the increased runoff resulting from urbanization over the past 40 
years.
    Southeast Louisiana.--The budget includes $47 million to continue 
construction activities for the Southeast Louisiana project including 
Canal 3, Suburban Canal, Elmwood Canal, Railroad Canal, Whitney 
Barataria Pumping Station in Jefferson Parish, and Napoleon Avenue 
Canal, Dwyer Road Pumping Station, and Broad Street Pumping Station in 
Orleans Parish.
    Continuing Authorities Program.-- The budget includes $57 million 
for a full program of continuing and new work under the 9 activities in 
the Continuing Authorities Program. This amount includes $2.5 million 
for beach erosion control projects (Section 103), $8.5 million for 
emergency streambank and shoreline protection projects (Section 14), 
$26.9 million for flood damage reduction projects (Section 205), $0.5 
million for navigation mitigation projects (Section 111), $4.5 million 
for navigation projects (Section 107), $0.1 million for snagging and 
clearing projects (Section 208), $4.5 million for aquatic ecosystem 
restoration (Section 206), $8.5 million for project modifications for 
improvement of the environment (Section 1135), and $1 million for 
beneficial uses of dredged material (Section 204).
                         general investigations
    The budget for the Civil Works General Investigations (GI) Program 
is $135 million. While this is a lower level than usual, it is a key 
element of our plan to stabilize the Civil Works budget in the future. 
The study program feeds the pipeline of construction work. There is a 
large amount of construction work already waiting for funding--far more 
than the funds we can reasonably expect in the future. This budget cuts 
back on project study funding, in order to reduce the backlog of 
potential construction projects that are beyond our capacity to budget 
within a reasonable timeframe. Once the backlog of costly projects is 
reduced, then we would be able to resume funding for studies at a 
higher level.
    We believe that cutting back on study funding on a temporary basis 
is the right thing to do for our local sponsors, who expect timely 
construction of projects, once studies are completed and the projects 
are authorized.
                           regulatory program
    The fiscal year 2000 budget for the Civil Works Regulatory Program 
is $117 million, an increase of $11 million over the enacted level of 
fiscal year 1999 funding. This will ensure that we continue to provide 
for effective and equitable regulation of the Nation's waters, 
including wetlands. Through the Regulatory Program the Corps is 
committed to protecting the aquatic environment and serving the public 
in a fair and reasonable manner. In fiscal year 1998, the Regulatory 
Program authorized 90,000 activities in writing, the most in any year, 
and nearly 95 percent of all actions were authorized in less than 60 
days.
    One of the goals of the Army Corps is to help people find solutions 
to their problems. In this program, we are proud that we not only 
protect our vital aquatic resources, but we try to help people, within 
the law, to find environmentally sustainable solutions to their 
problems. This budget will ensure that this level of service is 
maintained and improved, even with an increasing volume of work. The 
proposed increase would also enable the Corps to broaden its 
partnerships with States and local communities through watershed 
planning efforts.
    We will also continue to pursue important initiatives as part of 
the Regulatory Program. For example, under the Regulatory Program, we 
are also active in the preparation of Special Area Management Plans 
(SAMPs) to address development in environmentally sensitive areas. We 
will build on existing relationships with Federal and State resource 
agencies through our consultation responsibilities to minimize habitat 
losses and mitigate unavoidable wetland losses. With the amount 
included in the President's budget, we will establish a full 
administrative appeals process that will allow the public to challenge 
permit decisions and jurisdiction determinations without costly, time-
consuming litigation.
    Again this year, we are proposing a reasonable increase in the 
permit application fees for commercial applicants as a means to offset 
a portion of the costs of the Regulatory Program. We are prepared to 
work closely with this committee and the public to ensure that any 
revisions that we may adopt are reasonable.
                               conclusion
    In summary, the President's fiscal year 2000 budget for the Army 
Civil Works Program is a good one. It demonstrates a commitment to 
Civil Works missions, with strong support for all programs, a plan to 
solve the constitutional problem with the existing Harbor Maintenance 
Tax, an especially strong program of new construction, a firm 
commitment to maintaining existing water resource management 
infrastructure, and increased application of Civil Works Program 
expertise to environmental protection and restoration.
    Thank you Mr. Chairman and Members of the committee. This concludes 
my statement.
                                 ______
                                 

                                     Table A.--Department of the Army, Corps of Engineers Civil Works, Fiscal Year 2000 Direct Program, President's Program
                                                                                         [Funding ($K)]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                Fund
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Special                                        Trust                          General            Transfer         Trust
             Program              ---------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Permit                   Coastal                                                       Bonneville      River and       Total
                                     Harbor       Permanent    Application  Rcrth User    Wetlands       Harbor      Inland     Ultimate4   Initial5        Power          Harbor
                                    Services1  Appropriations     Fees2        Fees     Restriction3  Maintenance   Waterway                           Administration  Contributions
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Combined (discretionary and
 mandatory) Defense:
  Formerly Utilized Sites          ..........  ..............  ...........  ..........  ............  ...........  ..........     150,000     150,000  ..............  .............     150,000
 Remedial Action Program.........
Domestic:
  General Investigations.........  ..........  ..............  ...........  ..........  ............  ...........  ..........     135,000     135,000  ..............        39,827      174,827
  Construction, General..........     257,700  ..............  ...........  ..........  ............  ...........      55,000     927,200   1,239,900  ..............       156,786    1,396,666
  Operation and Maintenance,          692,900  ..............  ...........      35,700  ............  ...........  ..........   1,107,300   1,835,900       107,000           8,055    1,950,955
 General.........................
  Flood Control, Mississippi       ..........  ..............  ...........  ..........  ............  ...........  ..........     280,000     280,000  ..............        45,673      325,673
 River and Tributaries Project...
  Regulatory Program.............  ..........  ..............        7,000  ..........  ............  ...........  ..........     117,000     117,000  ..............  .............     117,000
  General Expenses...............  ..........  ..............  ...........  ..........  ............  ...........  ..........     148,000     148,000  ..............  .............     148,000
  Flood Control and Coastal        ..........  ..............  ...........  ..........  ............  ...........  ..........           0           0  ..............  .............           0
 Emergencies.....................
  Revolving Fund.................  ..........  ..............  ...........  ..........  ............  ...........  ..........           0           0  ..............  .............           0
  Coastal Wetlands Restoration...  ..........  ..............  ...........  ..........       54,180   ...........  ..........  ..........  ..........  ..............           800       10,800
  Permanent Appropriations.......  ..........        18,576    ...........  ..........  ............  ...........  ..........  ..........  ..........  ..............  .............      18,576
                                  --------------------------------------------------------------------------------------------------------------------------------------------------------------
    All..........................     960,600        18,576          7,000      35,700       54,180             0      55,000   2,864,500   3,905,800       107,000         251,141    4,292,517
Discretionary....................  ..........  ..............  ...........  ..........  ............  ...........  ..........   2,864,500   2,864,500  ..............  .............   2,864,500
Mandatory........................     950,600        18,576          7,000      35,700       54,180             0      55,000  ..........   1,041,300       107,000         251,141    1,428,017
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1 Proposed special fund to replace Harbor Maintenance Trust Fund.
2 Proposed fees for processing permit applications, to be paid to General Fund receipt account, not available to Corps.
3 Total for interagency task force; Corps' place of $10 million is reflected under ``Total.''
4 Net direct Congressional appropriation after reimbursement from mandatory ``Special'' and ``Trust'' funds, as applicable.
5 Direct Congressional appropriation. The total for all accounts comes from the General Fund, initially. Ultimately, it is reimbursed from mandatory accounts in the amount shown opposite
  ``Mandatory.''

                                 ______
                                 

                       Table B.--Department of the Army, Corps of Engineers Civil Works Fiscal Year 2000 Direct Program, President's New Starts and Other New Work Program
                                                                                         [Funding ($K)]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Funding
                                                               ---------------------------------------------------------------------------------------------------------------------------------
                                                                                           First Cost                                                      Budget Year
                    Account/Category                       #   ---------------------------------------------------------------------------------------------------------------------------------
                                                                                            Federal                                                          Federal
                                                                   Total    ---------------------------------------  Nonfederal     Total    ---------------------------------------  Nonfederal
                                                                                  GF          HSF          IWTF                                    GF          HSF          NWTF
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
General Investigations:
  Surveys:
    Santa Inez River, CA...............................      1          100          100            0            0            0          100          100            0            0            0
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
      All (Surveys)....................................      1          100          100            0            0            0          100          100            0            0            0

Construction, General:
  Projects:
  (Regular/Environmental):
    Cheyenne River Sioux Tribe, Lower Brute Sioux, ND..      1      108,000      108,000            0            0            0        2,000        2,000            0            0            0
    Willernette River Temperature Control, OR..........      1       70,600       70,600            0            0            0        1,700        1,700            0            0            0
  Flood Production:
    Arecibo River, PR..................................      1       23,100       12,500            0            0       10,600        8,742        2,500            0            0        6,242
    Grand Forks, ND--East Grand Forks, MN..............      1      350,250      175,900            0            0      174,350       30,600       10,000            0            0       20,600
    Napa River, CA.....................................      1      182,000       91,000            0            0       91,000       42,528        4,500            0            0       38,028
  Navigation:
    Baltimore Harbor and Channels, MD., Brewerton            1       14,035       10,530            0            0        3,505       13,083        9,578            0            0        3,505
     Channel...........................................
    Kikiaola Small Boat Harbor, Kaual, HI..............      1        5,653        4,997            0            0          656          185           75            0            0          110
    Neches River and Tributaries Saltwater Barrier, TX.      1       55,880       41,895            0            0       13,965        5,661        2,000            0            0        3,661
    Port Fourchon, LA..................................      1        4,930        2,557            0            0        2,373        4,557        2,184            0            0        2,373
    Santa Barbara Harbor, CA...........................      1        6,700        5,360            0            0        1,340        6,300        4,960            0            0        1,340
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
      All (Regular Projects)...........................     10      821,128      523,339            0            0      297,789      115,356       39,497            0            0       75,859

  Major Rehabilitation:
    Cape Cod Canal Railroad Bridge, MA.................      1       30,500       30,500            0            0            0        5,000        5,000            0            0            0
    John H. Kerr Powerhouse, VA & NC...................      1       59,600       59,600            0            0            0        1,400        1,400            0            0            0
    Lock and Dam 12, Mississippi River, IA.............      1       15,500        7,750            0        7,750            0        2,600        1,300            0        1,300            0
    Lock and Dam 24, Part 2, Mississippi River, IL & MO      1       38,400       19,200            0       19,200            0        1,200          600            0          600            0
    London Locks and Dam, Kanawha River, WV............      1       20,300       10,150            0       10,150            0          600            0            0          600            0
    Patoka Lake, IN....................................      1        7,200        7,200            0            0            0        2,000        2,000            0            0            0
    Walter F. George Powerhouse and Dam, AL & GA.......      1       37,000       37,000            0            0            0          750          750            0            0            0
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
      All (Major Rehabilitation Projects)..............      7      208,500      171,400            0       37,100            0       13,550       11,050            0        2,500            0

  Dam Safety Assurance:
    Bluestone Lake, WV.................................      1      107,300      107,300            0            0            0          750          750            0            0            0
    Success Dam, CA....................................      1       30,900       30,900            0            0            0        1,250        1,250            0            0            0
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
      All (Dam Safety Assurance Projects)..............      2      138,200      138,200            0            0            0        2,000        2,000            0            0            0
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
      All (Projects)...................................     19    1,167,828      832,939            0       37,100      297,789      130,906       52,547            0        2,500       75,859
  Program:
    Riverine Ecosystem Restoration and Flood Hazard          1      654,000      425,000            0            0      229,000       35,000       25,000            0            0       10,000
     Mitigation Program................................
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
      All (Projects and Program).......................     20    1,821,828    1,257,939            0       37,100      526,789      165,906       77,547            0        2,500       85,859

Operation and Maintenance, General:
  Dredge Wheeler Ready Reserve1........................      1            0            0            0            0            0       12,450       12,450            0            0            0
  Management Tools for Operation and Management........      1        2,265        2,265            0            0            0          975          975            0            0            0
  National Dam Security Program1.......................      1            0            0            0            0            0           20           20            0            0            0
  Wetlands Functional Assessment Methodology...........      1        7,398        7,398            0            0            0        1,000        1,000            0            0            0
  Zebra Mussel Research Program........................      1       13,378       13,378            0            0            0        1,500        1,500            0            0            0
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
    All (Remaining Items)..............................      5       23,041       23,041            0            0            0       15,945       15,945            0            0            0

Revolving Fund:
  Plant Replacement and Improvement Program (PRIP)
   Major Acquisitions2 :
    Towboat Raymond C. Peck Replacement................      1        5,500        5,500            0            0            0        5,160        5,160            0            0            0
    Fuel Oil Barge Replacement.........................      1        1,495        1,495            0            0            0        1,390        1,390            0            0            0
    Survey Boat Granada Replacement....................      1        1,533        1,533            0            0            0        1,285        1,285            0            0            0
    Derrickboat No. 6 Replacement......................      1          775          775            0            0            0          660          660            0            0            0
    Panama City Crane Barge Replacement................      1        6,400        6,400            0            0            0          125          125            0            0            0
    Survey Boat Gatlin Replacement.....................      1        1,800        1,800            0            0            0        1,550        1,550            0            0            0
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
      All (PRIP Major Acquisitions)....................      6       17,503       17,503            0            0            0       10,170       10,170            0            0            0
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
      All..............................................     32    1,862,472    1,296,583            0       37,100      526,789      192,121      103,762            0        2,500       85,859
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1 Fiscal Year 2000 funding reflects annual requirement.
2 Funding is available from the Revolving Fund.

                                 ______
                                 

    Table C.--Department of the Army Corps of Engineers Civil Works, Fiscal Year 2000 Total (Direct and Reimbursed) Program President's Environmental
                                                                         Program
                                                                    [Funding ($000)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              FY
                                    --------------------------------------------------------------------------------------------------------------------
                                                        Appropriation                                                 Budget
                                    --------------------------------------------------------------------------------------------------------------------
              Category                                                                                                  00
                                                                                        ----------------------------------------------------------------
                                          96           97           98           99                                  Account
                                                                                        ----------------------------------------------------------------
                                                                                             All           G1          C,G         OAM,G        Others
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Program:
  Discretionary Program Study and
 Project Specific Activities:
    Mitigation.....................      156,010      177,515      128,833      158,840      148,700        3,887      141,516            0        3,366
    Restoration....................      105,782       74,031      181,516       82,289      138,940       15,584       97,154       10,702       18,500
    Protection.....................       79,450       90,594      126,875       81,852       86,319          459        3,909       74,044        7,907
    Cleanup........................       12,020        3,458          317          540            0            0            0            0            0
    Compliance.....................        9,864          360          395        2,480        1,327          304          468            0          555
                                    --------------------------------------------------------------------------------------------------------------------
      All (Study and Project             383,098      345,958      438,036      324,001      376,355       20,234      243,047       84,746       27,328
       Specific Activities)........

Programmatic Activities:
    Aquatic Plant Control..........        4,000        2,000        5,000        3,000        3,000            0        3,000            0            0
    Aquatic Ecosystem Restoration              0            0        6,000       11,200        4,500            0        4,500            0            0
     (SEC 206).....................
    Beneficial Uses of Dredged             2,500        1,500        2,000          350        1,000            0        1,000            0            0
     Material (SEC 204)............
    Dredging Operations and                    0        1,500        4,000        5,000        8,000            0            0        8,000            0
     Environmental Research (DOER).
    Environmental Data Studies.....            0          100          100          100          100          100            0            0            0
    Environmental Infrastructure...            0            0        5,000            0            0            0            0            0            0
    Environmental Review Guide for             0            0            0            0            0            0            0            0            0
     Operations (ERGO).............
    Formerly Utilized Sirtes                   0            0     162,7181      140,000      150,000            0            0            0      150,000
     Remedial Action Program
     (FUSRAP)......................
    Great Lakes Remedial Action              500          500          500          500            0            0            0            0            0
     Program (SEC 401).............
    Hazardous Waste Site                   3,500            0            0            0            0            0            0            0            0
     Restoration Initiative........
    National Recreation Management             0            0            0        1,000            0            0            0            0            0
     Support (NRMS)................
    Natural Resources Technical                0            0          700            0            0            0            0            0            0
     Support (NRTS)................
    Oil Spill Research Program.....          840            0            0            0            0            0            0            0            0
    Pollution Prevention Program...        5,000            0            0            0            0            0            0            0            0
    Project Modification for              10,850       17,000       21,175       11,000        8,500            0        8,500            0            0
     Improvement of the Environment
     (SEC 1135)....................
    Regulatory Program.............      101,000      106,000      108,000      106,000      117,000            0            0            0      117,000
    Research and Development.......        8,331       10,399       17,450       19,450       18,000        4,500        3,000       10,500            0
    Riverine Ecosystem Restoration             0            0            0            0       25,000            0       25,000            0            0
     and Flood Hazard Mitigation...
    Wetland and Aquatic Habitat            2,500  ...........  ...........  ...........            0            0            0            0            0
     Creation......................
    Wetlands Functional Assessment             0            0            0            0       01,000            0            0        1,500            0
     Methodology...................
    Zebra Mussel Research Program..            0            0            0        1,500        1,500            0            0        1,500            0
                                    --------------------------------------------------------------------------------------------------------------------
      All (Programmatic Activities)      135,031      131,999      325,643      296,100      354,800        4,500       42,000       21,000      267,000
                                    --------------------------------------------------------------------------------------------------------------------
      All (Study and project             496,127      477,957      763,679      620,101      708,955       24,834      285,047      106,748      294,328
       Specific and Programmatic
       Activities).................
  Mandatory Program:
    Coastal Wetlands Planning,            35,000       43,000       44,000       10,000       10,000            0            0            0       10,000
     Protection, and Restoration...
                                    --------------------------------------------------------------------------------------------------------------------
      All (Discretionary and             533,127      520,957      807,679      630,101      719,955       24,834      285,047      106,748      304,328
       Mandatory Programs).........
Reimbursed Program (Support for
 Others):..........................
  EPA Superfund....................      250,000      250,000      300,000      250,000      250,000            0            0            0      250,000
  Department of Energy.............       31,000       20,000       22,000        2,000            0            0            0            0            0
  Other Governmental Agencies......       65,000       45,000       35,000       11,000        8,000            0            0            0        8,000
                                    --------------------------------------------------------------------------------------------------------------------
    All (Reimbursed Program).......      346,000      315,000      357,000      263,000      258,000            0            0            0      258,000
                                    --------------------------------------------------------------------------------------------------------------------
    All (Direct and Reimbursed           879,127      835,957    1,184,879      893,101      977,955       24,834      285,047      105,746      582,328
     Program)......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
1Includes $22,718 in unpaid balance transferred from Department of Energy.

   Responses by Assistant Secretary Joseph W. Westphal to Additional 
                   Questions from Senator Lautenberg
    Question 1. Harbor Maintenance Tax.--I am concerned that any new or 
replacement fee on port users may ultimately serve to divert cargo from 
U.S. ports to those of Canada or Mexico, especially if the fee is 
assessed on the vessel. As you know, competition between ports in the 
Northeast and the Pacific Northwest and their Canada counterparts is 
very real. In New Jersey, for example, we are waiting to see if Halifax 
will take Sea-Land and Maersk business from New York Harbor. What are 
you doing to ensure that the Administration's draft proposal will not 
have that unintended consequence?
    Answer. The Administration is very sensitive to this issue and has 
taken several steps to ensure that the potential for any such cargo 
diversions is minimized. First, we believe that because the proposed 
Harbor Services User Fee was structured as a user fee to be imposed on 
vessels and not on cargo, the incentive for shippers to redirect cargo 
away from U.S. ports is minimized. Second, the Administration decided 
to impose the Harbor Services User Fee on a ``voyage'' basis, rather 
than a ``port call'' basis, so that any incentive for vessel operators 
to reduce the number of calls to the United States during a particular 
voyage is eliminated. As an additional consideration, the imposition of 
the fee on a ``voyage'' basis was structured to be independent of the 
order of port calls between the United States and other North American 
ports to further minimize the potential for any unintended diversions 
of cargo.
    With the fee structured as described above, vessel operators may be 
motivated to more fully utilize their vessel cargo capacity by carrying 
the maximum amount of goods on voyages to U.S. ports. A vessel could 
completely avoid the fee only by not calling at any U.S. ports on a 
particular voyage (presumably in favor of calling in Canada or Mexico). 
This is considered highly unlikely for virtually all U.S. trade due to 
the size and importance of the U.S. market and the overland 
transportation costs from Canadian and Mexican ports to the United 
States

    Question 2. Kill van Kull Project.--Dr. Westphal, I was very 
pleased that recently, Vice president Gore and you were able to join us 
in Elizabeth for the signing of the agreement between the Corps of 
Engineers and the Port Authority on the Kill van Kull to Newark Bay 
deepening project. That project has been a long time coming and it is 
important to both sides of the harbor. Please tell me the status of the 
bidding process and how soon the digging will start.
    Answer. Bid opening on the first contract for work on the project 
occurred on March 11, 1999. The work is for removal of rock and non-
rock material in the Constable hook area. From bid opening through 
award of contract to initiation of construction normally takes 60 to 90 
days.

    Question 3. FUSRAP/Thorium.--I note that the Administration 
proposes a $10 million increase in the budget for the Formerly Utilized 
Sites Remedial Action Program--or ``FUSRAP.'' I was pleased to see this 
increase as my state, New Jersey, has four sites contaminated with 
thorium waste. I'm also pleased to tell you, Dr. Westphal, that I'm 
very satisfied with the speed with which you are cleaning up these 
sites in my state. Some of these are located right in residential 
neighborhoods. To what do you owe the increased funding? And, with this 
increase, do you expect to clean these sites up faster than would have 
been done under the Department of Energy?
    Answer. I believe that the increased funding is a result both of 
the Corps success in executing FUSRAP in BY 1998 and of efforts made by 
my office and the Corps to justify an increased allocation of funds for 
this program. While $150 million is more than the Department of Energy 
(DOE) ever had available for FUSRAP in a single year, DOE's draft 
accelerated cleanup plan as well as their 10-year plan were predicated 
on funding at the $182 million a year level. Some combination of 
increased efficiency and additional funding will be necessary to 
accelerate work.

    Question 4. FUSRAP/Thorium.--Can you tell me what progress you plan 
to make at sites in New Jersey this year-specifically at the Wayne and 
Maywood sites?
    Answer. At both of these sites we will continue remedial activities 
initiated in fiscal year 1998. In addition, we will develop final 
cleanup plans for both sites in accordance with the requirements of the 
Comprehensive Environmental Response, Compensation and Liability Act, 
which will establish the cleanup criteria at each of the sites. The 
Corps anticipates finalizing records of decisions for these sites early 
in fiscal year 2000.
                                 ______
                                 
   Responses by Assistant Secretary Joseph W. Westphal to Additional 
                      Questions from Senator Boxer
    Question 1. American River Watershed Flood Control Project.--The 
Sacramento District has issued a preliminary American River Basin 
Comparison of Flood Risks of the various alternatives for flood 
control. Please provide the committee a realistic appraisal of this 
document in terms of the different methodologies used for different 
alternatives compared, what important costs, such as environmental 
mitigation, that were not included and the different sources of cost 
estimates. In other words, what advice and caution should we use in 
evaluating this document?
    Answer. The American River Basin Comparison of Flood Risk dated 
March 11, 1999 was developed to display the results of the U.S. Army 
Corps of Engineers most recent hydrological analysis of American River 
flood frequency. For comparison purposes the data from the Corps 
previous frequency curves as well as from the National Research Council 
(NRC) conclusions are displayed in the attached table. Even though 
detailed cost estimates were not available for all the alternatives 
listed in the table, a preliminary estimate of the cost of each 
alternative was presented to give a relative comparison of costs 
between the alternatives. All 12 alternatives were evaluated for flood 
risk based on the same flow-frequency curve and using the same risk and 
uncertainty analysis. Therefore, the annual chance of exceedence and 
the recurrence interval values shown in the table for each alternative 
are comparable to the respective values for the other alternatives.
    The components of the 12 alternatives are described in enclosure 1 
to the table. The description of each alternative includes all 
appropriate components or provides an explanation of what additional 
features may be required. The preliminary costs presented in the table 
reflect a varying degree of certainty. Enclosure 2 describes the basis 
for and the uncertainty about the cost estimates. As noted in enclosure 
2, the costs provided for some of the alternatives are based on much 
more detailed designs and estimates than others. Detention Dam Plan (ID 
5) has the most detailed design because it was the tentatively 
recommended plan in the 1996 American River Watershed Project, 
Supplemental Information Report (SIR). Stepped Release Plan (ID 4) and 
Folsom Modification Plan (ID 6) were evaluated as candidate plans in 
the SIR and thus have designs on which to base the costs, but in less 
detail than the Detention Dam Plan. The Stepped Release Plan (ID 7) and 
Folsom Modification Plan (ID 8), as proposed by SAFCA, are proposed 
modifications of ID 4 and ID 6 and do not have the same design detail 
as the original plans. Thus, the estimated costs for ID 7 and ID 8 are 
not as certain as are those for ID 4 and ID 6. The Raise Folsom Plans 
(ID 9, ID 10, and ID 11) were evaluated on a limited basis in the SIR 
and as such have a lesser level of detail than the other alternatives. 
The 180,000 acre-foot Cofferdam Plan (ID 12) was based on information 
developed for the flood detention dams in the SIR, but no detailed 
design was completed. The cost estimates for the three Raise Folsom 
Plans and the Cofferdam Plan are comparable and of lesser certainty 
than those for the other alternatives.
    The Corps is in the process of developing additional information on 
alternatives ID 7 through ID 12. This will allow development of more 
detailed cost estimates for use in evaluating alternatives. Results of 
these analyses will be presented in an information paper that is 
scheduled for completion by the end of April 1999. In the interim, the 
costs included in the table are suitable for comparing the relative 
difference in cost between the alternatives.

                                                    American River Basin--Comparison of Flood Risk using Corps' Risk-Based Analysis Procedure
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    Frequency Curve
                                                                   ----------------------------------------------------------------------------------------------------------------
                                                                             COE 1986                    COE 1997                       NRC                      COE 1999            Preliminary
                  ID                     Flood Control Alternative ----------------------------------------------------------------------------------------------------------------   Cost  [$
                                                                      % chance     Recurrence     % chance     Recurrence     % chance     Recurrence     % chance     Recurrence     millions]
                                                                     Exceedence     Interval     Exceedence     Interval     Exceedence     Interval     Exceedence     Interval
                                                                     in any year     (years)     in any year     (years)     in any year     (years)     in any year     (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Alternatives Presented in Supplemental Information Report (SIR) Dated 1966
1.....................................  Existing Conditions w/o            1.28            78          1.61            62          1.27            79          1.49            67             0
                                         Folsom Reoperation.
2.....................................  Folsom Dam Reoperation w/o         1.02            98          1.32            76          0.99           101          1.19            84             0
                                         Common Features.
3.....................................  Folsom Dam Reoperation w/          0.95           105          1.25            80          0.92           109          1.11            90            67
                                         Common Features.
4.....................................  Stepped Release Plan--             0.42           238          0.61           164          0.42           238          0.52           192       505-650
                                         145,000/180,000 cfs.
5.....................................  Detention Dam Plan--               0.16           625          0.25           400          0.17           588          0.20           500      960-1000
                                         115,000 cfs.
6.....................................  Folsom Modification Plan--         0.54           185          0.74           135          0.53           188          0.65           153      370-430
                                         115,000 cfs.
                                                                           Modified Sir Alternatives Proposed By SAFCA
7.....................................  Stepped Release Plan--             0.48           208          0.66           151          0.47           212          0.58           172       505-600
                                         145,000/180,000 cfs.
8.....................................  Folsom Modification Plan--         0.65           154          0.85           117          0.62           161          0.77           130      150-170
                                         115,000 cfs.
                                                                                   Folsom Raise Alternatives
9.....................................  Raise 6.5 feet............         0.55           181          0.76           131          0.54           185          0.66           151       300-350
10....................................  Raise 17 feet.............         0.42           238          0.60           166          0.42           238          0.52           192       600-700
11....................................  Raise 30 feet.............         0.32           313          0.46           217          0.32           313          0.39           256     800-1000
                                                                                           Coffer Dam
12....................................  180,000 Acre-Ft Auburn             0.44           227          0.62           161          0.44           227          0.53           188       420-550
                                         Coffer Dam.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
1 See Enclosure 1 for Description of Frequency Curves and Alternatives.
2 The costs displayed are preliminary estimates based on available information. They are not based on a detailed Feasibility level study (except for ID 5, Detention Dam Plan which does have a
  feasibility level detailed estimate). Enclosure 2 provides additional information on the basis of the costs displayed.

                                 ______
                                 
American River Basin: Comparison of Flood Risk Using Corps' Risk-Based 
                           Analysis Procedure
            description of frequency curves and alternatives
    1. COE 1986 Frequency Curve represents statistical analyses 
performed after the February 1986 Flood (Presented in SIR).
    2. COE 1997 Frequency Curve represents statistical analyses 
performed after the January 1997 Flood (June 1998).
    3. NRC Frequency Curve represents the February 1999 statistical 
analyses recommended by the NRC.
    4. COE 1999 Frequency Curve reflects analyses based on Bulletin 
17B, systematic record, no historic adjustment, and station skew.
    5. (goes with ID 2 & 3) Flood control storage varies from 400,000 
af to 670,000 af depending on space in upstream reservoirs.
    6. (goes with ID 3) Common features includes slurry walls in lower 
American River levees and modification to Sacramento River levees 
adjacent to Natomas Basin.
    7. (goes with ID 4) Lower the 5 primary spillway bays and enlarge 
the 8 existing river outlets at Folsom Dam. Raise and modify levees on 
lower American River and Yolo Bypass. Widen Sacramento Weir and Bypass. 
Increase Folsom Dam's objective release from 115,000 to 145,000/ 
180,000 cfs.
    8. (goes with ID 5) 894,000 af single purpose flood control 
detention dam at the Auburn site. New high bridge to relocate Highway 
49.
    9. (goes with ID 6) Lower the 5 primary spillway bays, enlarge the 
8 existing river outlets, modifications for increased surcharge 
storage, increase flood storage to 475,000/720,000 af.
    10. (goes with ID 7) Enlarge the 8 existing river outlets, 
construct 5 new river outlets, modifications for increased surcharge 
storage, flood storage of 400,000/600,000 af, raise and modify levees 
the same as ID 4, increase objective release to 145,000/180,000 cfs.
    11. (goes with ID 8) Enlarge the 8 existing river outlets, 
construct 5 new river outlets, modifications for increased surcharge 
storage, flood storage of 400,000/600,000 af.
    12. (goes with ID 9) Raise dam and dikes 6.5 feet, replace spillway 
gates, construct 5 new river outlets, enlarge the 8 existing river 
outlets, construct new bridge downstream of dam. Objective release will 
remain at the existing 115,000 cfs.
    13. (goes with ID 10) Raise dam and dikes 17 feet, reconstruct 
spillway and replace all spillway gates, construct 5 new river outlets, 
enlarge the 8 existing river outlets, new bridge downstream of dam, and 
acquire additional real estate. Objective release will remain at the 
existing 115,000 cfs.
    14. (goes with ID 11) Same as ID 11 but raise by 30 feet. Objective 
release will remain at the existing 115,000 cfs.
    15. (goes with ID 12) Construct concrete dam at or near previous 
Auburn Dam cofferdam site, use existing diversion tunnel with some 
modifications as main outlet, environmental mitigation, and land 
acquisition.
                                 ______
                                 
 American River Basin Comparison of Flood Risk Using Corps' Risk-Based 
                           Analysis Procedure
                    explanation of preliminary costs

------------------------------------------------------------------------
                                   First Costs
                ID                     [$ x             Comments
                                    millions]
------------------------------------------------------------------------
1................................            0  ........................
2................................            0  For these purposes it is
                                                 assumed that the
                                                 existing reoperation is
                                                 a without project
                                                 condition and has no
                                                 incremental cost.
3................................           67  The current estimated
                                                 cost of the authorized
                                                 project which is under
                                                 construction. For the
                                                 purpose of this table
                                                 this is a without
                                                 project condition and
                                                 other cost estimates do
                                                 not include these
                                                 costs.
4................................      505-650  The $505 million is the
                                                 cost for the plan as
                                                 described in the 1996
                                                 Supplemental
                                                 Information Report
                                                 (SIR) updated to Oct 98
                                                 price level. In
                                                 developing the plan for
                                                 the SIR, it was
                                                 believed that Folsom
                                                 Dam's five primary
                                                 spillways could be
                                                 lowered without
                                                 significantly affecting
                                                 the large amount of
                                                 public traffic using
                                                 the road across the
                                                 dam. New information
                                                 became available
                                                 subsequent to
                                                 completing the SIR and
                                                 it is now believed that
                                                 there would be a
                                                 significant impact to
                                                 public traffic using
                                                 the dam road. The most
                                                 likely mitigation for
                                                 the traffic impacts
                                                 would be to construct a
                                                 new bridge just
                                                 downstream of the dam.
                                                 Various local agencies
                                                 have also questioned
                                                 whether the costs
                                                 included for hydraulic
                                                 mitigation in the Yolo
                                                 Bypass is adequate. The
                                                 $650 million includes
                                                 costs for both a new
                                                 bridge and additional
                                                 contingency for
                                                 hydraulic mitigation.
5................................     960-1000  Reflects estimate cited
                                                 in the SIR updated by
                                                 price level to Oct 98
                                                 prices. Includes $88
                                                 million in sunk costs
                                                 that are not included
                                                 in any other estimate
                                                 in this table. The
                                                 range is to account for
                                                 uncertainty in the cost
                                                 estimate.
6................................      370-430  The $370 million is
                                                 based on the plan
                                                 presented in the SIR
                                                 updated by price level
                                                 to Oct 98 prices. As
                                                 with alternative 4
                                                 (Stepped Release Plan)
                                                 it is likely a new
                                                 bridge downstream of
                                                 Folsom will be required
                                                 to mitigate for traffic
                                                 impacts. The $430
                                                 million estimate
                                                 includes the potential
                                                 cost of a new bridge.
7................................      505-600  The $505 million is the
                                                 same cost as presented
                                                 in the SIR for the
                                                 stepped release plan.
                                                 For this estimate it is
                                                 assumed the costs are
                                                 the same for the 5 new
                                                 river outlets which are
                                                 included in this plan
                                                 in lieu of the spillway
                                                 lowering feature
                                                 included in the stepped
                                                 release plan described
                                                 in the SIR. The $600
                                                 million includes
                                                 additional costs
                                                 because of the
                                                 uncertainty in the cost
                                                 for hydraulic
                                                 mitigation in the Yolo
                                                 Bypass. The spillways
                                                 will not be lowered in
                                                 this plan therefore, a
                                                 new downstream bridge
                                                 is assumed not to be
                                                 needed.
8................................      150-170  This plan is similar to
                                                 number 6 but includes
                                                 flood control storage
                                                 of 400,000/600,000 af
                                                 in lieu of the 475,000/
                                                 720,000 af, and
                                                 includes 5 new river
                                                 outlets in lieu of
                                                 lowering the 5 primary
                                                 spillway bays. It is
                                                 expected that the 5 new
                                                 river outlets will be
                                                 somewhat less costly
                                                 than lowering the
                                                 spillways. However, a
                                                 specific estimate of
                                                 the new river outlets
                                                 has not been made
                                                 therefore the cost
                                                 listed is the costs of
                                                 the Folsom
                                                 modifications in the
                                                 SIR updated by price
                                                 level to Oct 98 prices.
                                                 The range is for
                                                 uncertainty in the
                                                 overall estimate. The
                                                 spillway will not be
                                                 lowered in this plan,
                                                 therefore, a new
                                                 downstream bridge is
                                                 assumed not to be
                                                 needed.
9................................      300-350  This is based on an
                                                 estimate made by the
                                                 Sacramento Area Flood
                                                 Control Agency. Range
                                                 is for uncertainty in
                                                 the overall estimate.
                                                 The Corps is in the
                                                 process of developing
                                                 an estimate.
10...............................      600-700  This was evaluated as a
                                                 preliminary measure in
                                                 the development of the
                                                 SIR. The cost range is
                                                 because there are
                                                 potentially significant
                                                 additional costs for
                                                 real estate, recreation
                                                 modifications, costs
                                                 for lost water during
                                                 construction, and
                                                 construction
                                                 uncertainties due to
                                                 seasonal conditions.
11...............................     800-1000  This was evaluated as a
                                                 preliminary measure in
                                                 the development of the
                                                 SIR The cost range is
                                                 because there are
                                                 potentially significant
                                                 additional costs for
                                                 real estate, recreation
                                                 modifications, costs
                                                 for lost water during
                                                 construction, and
                                                 construction
                                                 uncertainties due to
                                                 seasonal availability.
12...............................      420-550  The $420 million does
                                                 not include any costs
                                                 for potential
                                                 mitigation for impacts
                                                 to Highway 49 bridge.
                                                 If mitigation is
                                                 required, there are
                                                 various options to
                                                 mitigate impacts to
                                                 include a full bridge
                                                 replacement estimated
                                                 to cost about $110
                                                 million. (Note: This
                                                 plan includes
                                                 modifications to Folsom
                                                 outlet works (id 8) and
                                                 does not include any
                                                 sunk cost as were
                                                 included in ID 5.)
------------------------------------------------------------------------


    Question 2. American River Watershed Flood Control Project.--What 
is your estimate of the length of time it would take for the Corps to 
produce a Chief of Engineers Report for the so-called ``Folsom Raise'' 
alternatives identified as nos. 9, 10 and 11 in this report?
    Answer. It would take 18-24 months to complete a Chief of Engineers 
report that focuses only on an alternative that raises Folsom Dam for 
the sole purpose of flood control, it would take 18-24 months to 
complete. This would include, among other items of work, determining 
the optimum height of the raise of Folsom Dam and completion of a joint 
Environmental Impact Statement-Environmental Impact Report, which would 
specifically address this alternative and generally address all other 
alternatives previously considered. Included in the 18-24 months of 
effort would be a Feasibility-type report that would recommend a plan 
based on the outcome of optimization and environmental analysis.
                                 ______
                                 
   Responses by Assistant Secretary Joseph W. Westphal to Additional 
                     Questions from Senator Graham
    Question 1. Kissimmee River Restoration.--Of the funds provided to 
the Army Corps for Kissimmee River restoration since the inception of 
the project, how much will be obligated by the end of fiscal year 1999?
    Answer. 100 percent of the funds received by the Corps of Engineers 
for Kissimmee River restoration will be obligated by the end of fiscal 
year 1999. A small amount of the obligated funds will not be expended 
because the ongoing contracts will have some undelivered orders.

    Question 2. Kissimmee River Restoration.--In fiscal year 1999, the 
original request for the Kissimmee River project was $27.3 million. The 
enacted amount was $8 million. What effect has this had on the Army 
Corps schedule for the Kissimmee River project?
    Answer. None. Modifications to contract 14, which was intended for 
spoil removal in the Lower Kissimmee Basin resulted in a total cost 
reduction of $12 million and fiscal year 1999 cost reduction of 48 
million. Lower Basin contract 6, which focused on the Istokpoga levee 
was delayed, resulting in a reduction of $2 million in fiscal year 1999 
costs. We are in the process of notifying OMB and the Appropriations 
Committees of our intent to reprogram $5 million. Therefore, the 
reduction in fiscal year 1999 funds resulted in no change to the Corps 
construction on the Kissimmee project.

    Question 3. Kissimmee River Restoration.--Given the changes that 
occurred in the fiscal year 1999 request, can we anticipate similar 
changes in the fiscal year 2000 request?
    Answer. No. The circumstances leading to the cost reductions for 
fiscal year 1999 were a one-time event. The cost changes stemming from 
contract 14 modifications were incorporated into last year's budget. 
The delays in contract 6 are over and forward progress is anticipated 
this fiscal year. In addition, as I indicated earlier, by the end of 
fiscal year 1999, all funds received by the Corps will be obligated, 
making full funding of the fiscal year 200 request a priority.

    Question 4. Everglades Restoration.--Secretary Babbitt recently 
announced his intent to create an independent panel of scientists to 
review the development and implementation of the Corps of Engineers 
Everglades restoration plans. What role will the Army Corps play in 
selecting the panel of scientists?
    Answer. First, let me emphasize that sound science has formed the 
foundation of all of our efforts to develop a plan to restore the 
Everglades. In fact the plan was developed by scores of scientists and 
engineers from many different agencies. In regard to the independent 
panel of scientists, we have always considered outside peer review to 
be an important component of the implementation of the restoration 
plan. We are working closely with the Department of the Interior and 
other agencies to select and convene this group as soon as possible.

    Question 5. Shore Protection Cost Sharing.--Included in the WRDA 
1999 legislation is a proposal to modify the cost-share requirements 
for shore protection projects to 50-50. This differs slightly from the 
Administration's original proposal. If WRDA 1999 is enacted into law 
with a 50-50 cost share provision for shore protection projects, will 
the Army Corps begin requesting funds to support these projects in 
fiscal year 2001?
    Answer. Yes, if WRDA 1999 is enacted with cost sharing acceptable 
to the Administration, we will pursue funding to the extent feasible 
within budget constraints.

    Question 6. Brevard County Issue No. 1.--Background. The Army Corps 
initially agreed that as part of the settlement of this lawsuit, they 
would conduct the shore protection project as laid out in the 
feasibility study. In the summer of 1998, the Corps indicated that they 
wanted the right to make modifications to the project. These changes 
would be governed by regulations ER 1105-2-100.
    The lawyers for Brevard County reviewed the regulations in December 
1998 and took exception to 2-17b, which allows the Chief of Engineers 
the discretionary authority to make changes that do not meet criteria.
    Because the Corps took the position that such decisions were non-
reviewable, the Brevard County lawyers proposed that they add the 
following language to the settlement agreement: ``No change may 
arbitrarily or capriciously reduce the scope of the Shore Protection 
Project''.
    During mediation on February 18, 1999, I understand that the Corps 
rejected the proposed sentence.
    Can you explain why the Corps would disagree with a statement that 
it would not arbitrarily or capriciously reduce the scope of the Shore 
Protection Project that is part of the settlement agreement with 
Brevard County?
    Answer. My response is to both issues you raised concerning Brevard 
County. The issues indicate that the Army Corps of Engineers has had 
dealings with lawyers for Brevard County, Florida regarding a 
settlement agreement and this implies that there is a lawsuit involving 
Brevard County. This is incorrect. There is no lawsuit involving 
Brevard County and there have been no such settlement discussions with 
lawyers for Brevard County. Nonetheless, it is clear the questions 
relate to ongoing settlement discussions between the U.S. Department of 
Justice/Army Corps of Engineers and private lawyers representing 
approximately 350 private beach front property owners located south of 
the Corps' Canaveral Harbor Project (Applegate, et al. v. United 
States, No. 92-832L, U.S. Ct. Fed. Cls.).
    As such, the issues pertain to settlement discussions in a 
presently pending lawsuit, in which the United States Army is 
represented by the Department of Justice. You have asked me to explain 
why the Corps took particular positions in connection with the 
negotiations to attempt to develop an agreement under which this 
lawsuit might be settled. It is my understanding that settlement 
discussions are considered confidential, and that the Settlement Judge 
in this matter has specifically confirmed that these ongoing settlement 
discussions are considered confidential and are not to be divulged to 
outside parties. Accordingly, I respectfully decline to provide answers 
to the questions posed relative to this matter.

    Question 7. Brevard County Issue No. 2.--Background. Since the 
Feasibility study was completed in 1996, the Corps has refused to 
submit a budget request for this project. During mediation in June 
1998, the County's lawyers asked the Corps to take a favorable position 
with respect to appropriation of the project and any increase in the 
Federal cost share.
    The Corps refused, citing the President's policy against such 
projects. The Corps did agree to remain neutral at the mediation (and a 
sentence to this effect was added to the agreement).
    On February 18, 1999, during the last mediation session, the 
County's lawyers requested that the Corps add two sentences to the 
agreement which stated that the Corps would not be prohibited from 
rendering answers or opinions in response to questions by the 
President, but would not advocate against the appropriation of funds 
for the Project. The Corps rejected this language.
    The County's lawyers agreed to strike these two sentences and just 
stick with the neutrality sentence as previously agreed to in June 
1998. The Corps rejected the offer, and by doing so, reneged on an 
agreement made in June 1998.
    Can you explain why the Corps would reverse its position in the 
middle of a settlement agreement on a deal that was negotiated in good 
faith with Brevard County, Florida?
    Answer. My response is to both issues you raised concerning Brevard 
County. The issues indicate that the Army Corps of Engineers has had 
dealings with lawyers for Brevard County, Florida regarding a 
settlement agreement and this implies that there is a lawsuit involving 
Brevard County. This is incorrect. There is no lawsuit involving 
Brevard County and there have been no such settlement discussions with 
lawyers for Brevard County. Nonetheless, it is clear the questions 
relate to ongoing settlement discussions between the U.S. Department of 
Justice/Army Corps of Engineers and private lawyers representing 
approximately 350 private beach front property owners located south of 
the Corps' Canaveral Harbor Project (Applegate, et al. v. United 
States, No. 92-832L, U.S. Ct. Fed. Cls.).
    As such, the issues pertain to settlement discussions in a 
presently pending lawsuit, in which the United States Army is 
represented by the Department of Justice. You have asked me to explain 
why the Corps took particular positions in connection with the 
negotiations to attempt to develop an agreement under which this 
lawsuit might be settled. It is my understanding that settlement 
discussions are considered confidential, and that the Settlement Judge 
in this matter has specifically confirmed that these ongoing settlement 
discussions are considered confidential and are not to be divulged to 
outside parties. Accordingly, I respectfully decline to provide answers 
to the questions posed relative to this matter.


                             
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