    [Senate Hearing 106-976]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 106-976

                    WATER RESOURCES DEVELOPMENT ACT OF 2000

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                       TRANSPORTATION AND INFRASTRUCTURE

                                     OF THE

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                           ONE HUNDRED SIXTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 23, 2000

                                   __________

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

                        U.S. GOVERNMENT PRINTING OFFICE
    68-423 cc                   WASHINGTON : 2001
                       _______________________________________________________________________
                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, second session
                       BOB SMITH, New Hampshire, Chairman
    JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
    JAMES M. INHOFE, Oklahoma            DANIEL PATRICK MOYNIHAN, New York
    CRAIG THOMAS, Wyoming                FRANK R. LAUTENBERG, New Jersey
    CHRISTOPHER S. BOND, Missouri        HARRY REID, Nevada
    GEORGE V. VOINOVICH, Ohio            BOB GRAHAM, Florida
    MICHAEL D. CRAPO, Idaho              JOSEPH I. LIEBERMAN, Connecticut
    ROBERT F. BENNETT, Utah              BARBARA BOXER, California
    KAY BAILEY HUTCHISON, Texas          RON WYDEN, Oregon
    LINCOLN CHAFEE, Rhode Island
                          Dave Conover, Staff Director
                      Tom Sliter, Minority Staff Director
                                     ------

               Subcommittee on Transportation and Infrastructure

                      GEORGE V. VOINOVICH, Ohio, Chairman

    JOHN W. WARNER, Wyoming              MAX BAUCUS, Montana
    CHRISTOPHER S. BOND, Missouri        DANIEL PATRICK MOYNIHAN, New York
    JAMES M. INHOFE, Oklahoma            HARRY REID, Nevada
    CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
    LINCOLN CHAFEE, Rhode Island         JOSEPH I. LIEBERMAN, Connecticut

                                      (ii)

    ?

                                C O N T E N T S

                                  ----------
                                                                       Page

                                  MAY 23, 2000
                               OPENING STATEMENTS

    Baucus, Hon. Max, U.S. Senator from the State of Montana.........     3
    Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island     4
    Lautenberg, Hon. Frank R., U.S. Senator from the State of New
      Jersey.........................................................     4
    Lieberman, Hon. Joseph I., U.S. Senator from the State of
      Connecticut....................................................    34
    Moynihan, Hon. Daniel Patrick, U.S. Senator from the State of New
      York...........................................................    36
    Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     1

                                   WITNESSES

    Borrone, Lillian, Director of Port Commerce, Port of New York and
      New Jersey.....................................................    23
        Prepared statement...........................................    85
        Responses to additional questions from Senator Voinovich.....    87
    Malloy, Hon. Dannel P., Mayor, Stamford, Connecticut.............    28
        Prepared statement...........................................   105
    Marlowe, Howard, president, American Coastal Coalition...........    30
        Prepared statement...........................................   110
    Palmer, Barry, executive director, DINAMO........................    26
        Prepared statement...........................................    90
        Responses to additional questions from Senator Voinovich.....   103
    Sutherland, Doug, county executive, Pierce County, Washington....    21
        Prepared statement...........................................    82
        Responses to additional questions from Senator Smith.........    84
    Westphal, Hon. Joseph, Assistant Secretary of the Army (Civil
      Works), Department of Defense..................................     6
        Affadavits, Investigation on Mississippi and Illinois Rivers
          Navigation................................................. 45-82
        Prepared statement...........................................    36
        Responses to additional questions from:
            Senator Baucus...........................................    44
            Senator Smith............................................    41

                              ADDITIONAL MATERIAL

    Letter, Ron Sims, King County, WA................................   116
    Statements:
        Great Lakes Task Force......................................126-148
        King County, WA..............................................   116
        Kitsap County, WA............................................   118
        Lee County, WA...............................................   119
        National Association of Flood and Stormwater Management
          Agencies...................................................   120
        National Mining Association..................................   123

                                     (iii)

                    WATER RESOURCES DEVELOPMENT ACT OF 2000

                                  ----------

                             TUESDAY, MAY 23, 2000

                                         U.S. Senate,
                   Committee on Environment and Public Works,
             Subcommittee on Transportation and Infrastructure,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10:10 a.m. in
    room 406, Senate Dirksen Building, Hon. George V. Voinovich
    (chairman of the subcommittee) presiding.
        Present: Senators Voinovich, Lautenberg, Chafee, Thomas,
    Lieberman, and Baucus [ex officio].

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

        Senator Voinovich. Good morning. The hearing will please
    come to order.
        Today we are going to consider the Administration's version
    of the Water Resource Development Act of 2000, WRDA 2000. While
    this is, in one sense, our initial hearing on the Water
    Resources Development Act, it is actually this committee's
    fourth hearing concerning aspects of WRDA 2000. The full
    committee has already held a field hearing in Florida and a
    hearing in this very room on the comprehensive Everglades
    restoration plan, which will be the cornerstone of this year's
    WRDA bill. In addition, the subcommittee held a hearing last
    week on the backlog of Corps of Engineers projects.
        As many in this room are aware, Chairman Smith has set an
    ambitious schedule for putting together the WRDA bill with a
    goal of marking up legislation by June 27.
        There are some who may question the need for a WRDA bill
    this year, since Congress passed a WRDA bill last year. In
    reality, last year's bill was actually unfinished business from
    1998. If Congress is to get back on its 2-year cycle for
    passage of WRDA legislation, we need to act on a bill this
    year.
        The 2-year cycle is important to avoid long delays between
    planning and the execution of projects and to meet commitments
    to State and local government partners who share the costs with
    the Federal Government.
        While a 2-year authorization cycle is extremely important
    in maintaining efficient schedules for completions of important
    water resource projects, as we explored at our hearing on May
    16th, efficient schedules also depend on adequate
    appropriations.
        The appropriations for the Corps programs have not been
    adequate, and, as a result, there is a backlog of over 500
    projects that will cost the Federal Government $38 billion to
    complete.
        As we heard from General Van Winkle last week, they are
    worthy projects with positive benefit-to-cost ratios and
    capable non-Federal sponsors, so these are not wish projects,
    these are real projects. There are 500 of them, $39 billion
    worth that are sitting on the shelf.
        The failure to provide adequate funding for these projects
    means that the project construction schedules are spread out
    over a longer period of time, resulting in increased
    construction costs and delays in achieving project benefits.
        I recognize that budget allocations and Corps
    appropriations are beyond the purview of this committee, but I
    believe the backlog issue should impact the way we approach
    WRDA 2000 in three very important ways:
        First, we need to control the mission creep of the Corps of
    Engineers. At the backlog hearing I held last week, I mentioned
    that even though I obtained a limited authority for
    environmental infrastructure in Ohio, I am not convinced that
    there is a Corps role in water and sewage plant construction.
    In fact, I would like to see it knocked out, period. That
    should be a State and local government responsibility, with
    some Federal assistance through the State revolving loan funds.
        Another example is the brownfields remediation authority
    proposed by the Administration for the Corps. Brownfield
    remediation and redevelopment is a very important issue. It is
    a big problem in my State, and I am working to remove Federal
    impediments to State cleanups. If we get the EPA off our back
    and get the authority to go forward with it, there would be
    unbelievable brownfield cleanups by States with State money.
    But, having said that, I don't think that this is the mission
    of the Corps of Engineers.
        What we need to do is recognize and address the large
    amount of unmet national needs within the traditional Corps
    mission areas--needs such as flood control, navigation, and
    emerging mission area of restoration of nationally significant
    environmental resources, like the Florida Everglades.
        The second thing we need to do in WRDA 2000 is make sure
    that the projects we are authorizing meet the highest standard
    of engineering, economic, and environmental analysis. We must
    be sure that the projects and project modifications Congress
    authorizes make maximum net contributions to economic
    development and environmental quality. We can only assure that
    projects meet these high standards if projects have received
    adequate study and evaluation to establish project costs,
    benefits, and environmental impacts to an appropriate level of
    confidence. This means that a feasibility report must be
    completed before projects are authorized for construction.
        Finally, we have to preserve the partnerships and cost-
    sharing principles of the Water Resources Development Act of
    1986. WRDA 1986 established the principle that water resource
    projects should be accomplished in partnership with State and
    local governments and that this partnership should involve
    significant financial participation by the non-Federal
    sponsors.
        My experience as mayor of Cleveland and Governor of Ohio
    convinced me that the requirement for local funding to match
    Federal dollars results in much better projects than where
    Federal funds are simply handed out. It doesn't matter if it is
    parks, housing, highways, or water resource projects, the
    requirement for local cost share provides a level of
    accountability that is essential to a quality project, and
    cost-sharing principles must not be weakened.
        We are going to start today's hearing with the presentation
    of the Administration's WRDA proposal. We will follow that
    presentation for the panel of proponents for projects and
    programs that are either already contained in the
    Administration's bill or are scheduled to have feasibility
    reports completed this year in time for WRDA consideration.
        I believe today's presentation will give the committee a
    good blueprint from which we will be able to formulate a
    Congressional WRDA bill this year.
        [The prepared statement of Senator Voinovich follows:]
        Senator Voinovich. Senator Baucus?

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

        Senator Baucus. Thank you, Mr. Chairman.
        First, I compliment you on the way you are conducting this
    hearing, particularly the way you and Chairman Smith are
    handling the WRDA bill. It is a comprehensive schedule, but it
    is one that is solid, and it is timely and very professional
    and I just congratulate you for your work on it.
        I just have a couple of points. I would like my statement
    to be included in the record.
        One, I compliment the Corps, and particularly Secretary
    Westphal, for all of your work, generally.
        Second, I want to thank Senator Crapo for coming out to
    Montana, for holding a hearing on the Fort Peck Fish Hatchery
    on April 29th of this year. I won't go into great detail as to
    the importance of that project, but I can assure you that the
    folks in that part of my State are very, very appreciative of
    the efforts of this committee and the Corps with respect to
    that hatchery.
        More generally, I think it is important to remind ourselves
    how important WRDA is, because it is essentially an
    infrastructure bill, and the better the infrastructure in our
    country, the more solid and sound the economy.
        It is really the water equivalent of T-21. We passed a
    highway bill out of this committee a few years ago which helped
    highway infrastructure, and this is essentially the water T-21.
    It is the water infrastructure bill. I just think it is
    important that we all keep that in the back of our minds as we
    move forward. These are not just local projects for local
    areas; this is a national bill to improve the national
    infrastructure.
        Finally, I very much compliment you and others that have
    worked so hard in the Everglades restoration bill. I support
    it. I think it is an extremely worthwhile project. Several of
    us--I know you have, too, Mr. Chairman, asked a couple of tough
    questions in previous hearings. Frankly, in my judgment--and I
    know that's the view of the Secretary--those tough questions
    just help the program. It helps it by showing the tough
    questions can not only be asked, but can be answered. I
    compliment all of you for working so hard on that project.
        Thank you, Mr. Chairman.
        [The prepared statement of Senator Baucus follows:]
        Senator Voinovich. Senator Lautenberg?

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

        Senator Lautenberg. Thanks, Mr. Chairman.
        My compliments, as well, to you for getting this hearing
    underway. The subject is so important, and as time passes I
    think it is fair to say we see the great need to take advantage
    of the skills and the resources that we have in the Army Corps
    and to try to use them as effectively as we can, and recognize
    that in this full-blown economy that we are experiencing, that
    we may need help in some areas just to maintain what we've got.
        We've seen what can be, based on the buoyancy of the
    economy, and now we have to step up to the conditions that
    arise as a result of that.
        Well, we're going to hear later on from Lillian Borrone of
    the Port Authority. She's going to testify today, and she's
    going to discuss the need to deepen the major channels in our
    port area to 50 feet. I hope the subcommittee is going to
    authorize this project, which just this month received a
    favorable report from the Corps of Engineers.
        Senator Moynihan, my colleague on this committee, and I
    have a great interest in the future of our port, and I served
    as a commissioner of the Port Authority before coming here, so
    between us Senator Moynihan and I have lots of years of
    experience related to the port and its effect on the economy of
    our region.
        The 50-foot project for the Port of New York and New Jersey
    is the largest project anticipated for our region in the
    history of the port, and it is well worth the investment.
        The Port of New York and New Jersey is not just a local
    port, but it is the Nation's port. It is located at the center
    of the largest regional market in the country. It is the
    largest container port on the east coast, and the third-largest
    in the United States. It serves 34 percent of the population of
    this country. And last year exports exceeded $22 billion.
    That's second only to the Port of Long Beach, California. The
    Port of New York and New Jersey also provides about 165,000
    local jobs.
        So, Mr. Chairman, over the next several years, the Port
    Authority, that bi-State agency that I think was one of the
    more brilliant creations that has happened in terms of
    government, tries to--not always successfully, but tries to
    ameliorate problems that occur between the States and get on
    with the work that affects both our economies.
        They project that there will be somewhere between 3.7 and
    4.6 percent growth in the volume of cargo entering and leaving
    our port. This cargo depends very much on larger vessels. These
    vessels are capable of carrying over 6,000 containers and
    require a channel depth in excess of 46 feet. So, just in
    comparison, a ship carrying only 2,000 containers--we just said
    they are carrying over 6,000 now--is the equivalent of 1,000
    rail cars, or 2,000 trucks. One of these ships, the ``Regina
    Emeris,'' recently entered our harbor only partially filled. I
    wish that everyone could see this picture. The red line is
    below the draft line. The red color is below the preferred
    draft level, because it is traveling and coming in about half
    full because the channel just was not deep enough to allow it
    access to our terminals. That's a problem we have to attend to.
        I also want to briefly mention another issue in WRDA the
    chairman brought up that I hope the subcommittee is going to
    consider, and that is the issue of port sharing or port
    projects.
        Mr. Chairman, as you know, the current cost for navigation
    projects greater than 45 feet is half, 50/50, half and half.
    The formula was established 14 years ago, before we were aware
    of the need to deepen our harbors to accommodate new
    generations of container ships, and it is time that we bring
    this cost-sharing into the 21st century and include a provision
    that revises the cost sharing to reflect a fairer distribution
    of costs.
        Finally, I want to address the Administration's proposal to
    authorize the Corps to participate in brownfields redevelopment
    projects. I support efforts to increase the Federal
    Government's assistance with State and local brownfield
    projects, and that's the reference I was talking about, Mr.
    Chairman. The Corps is already participating in brownfields-
    like projects known as Minnich Park in Newark, New Jersey, and
    they are really helping. They have removed deteriorated piers
    and restored the waterfront, making it into an urban park as
    part of a larger flood control project along the river.
        The project enjoys strong support from the city of Newark,
    and a lot of the communities just don't have the means to get
    into this without some assistance from the Federal Government,
    so I hope that we are going to be able to move on this, and I
    await the witnesses' testimony.
        Senator Voinovich. Thank you, Senator.
        Senator Chafee?

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

        Senator Chafee. Thank you, Mr. Chairman.
        I am looking forward to the testimony, especially of Dr.
    Westphal and General Van Winkle and Mayor Malloy, who will
    testify this morning about the role of the Army Corps of
    Engineers in brownfields redevelopment.
        I understand, Mr. Chairman, your concern for mission creep
    for the Corps; however, the undeniable economic, environmental,
    and social benefits of brownfields redevelopment do demand that
    we utilize all the tools at our disposal, and I do believe the
    Corps is an effective tool, and I look forward to working with
    members of this subcommittee and the Administration to ensure
    that the Corps continues to play a valuable role in the
    revitalization of our communities.
        Thank you.
        Senator Voinovich. Thank you.
        Our first two witnesses this morning are Dr. Joseph
    Westphal, who is the Assistant Secretary of Army Civil Works,
    and Major General Hans A. VanWinkle, Deputy Commanding General
    for Civil Works, U.S. Army Corps of Engineers.
        We are very happy to have you with us this morning, Dr.
    Westphal, if you will begin the testimony.

     STATEMENT OF HON. JOSEPH WESTPHAL, ASSISTANT SECRETARY OF THE
                           ARMY (CIVIL WORKS)

    ACCOMPANIED BY:
            MAJOR GENERAL HANS A. VAN WINKLE, DEPUTY COMMANDING GENERAL FOR
                CIVIL WORKS, U.S. ARMY CORPS OF ENGINEERS
            MICHAEL DAVIS, DEPUTY ASSISTANT SECRETARY FOR POLICY AND
                LEGISLATION, DEPARTMENT OF THE ARMY
        Mr. Westphal. Thank you, Mr. Chairman.
        I do have with me my Deputy Assistant Secretary for policy
    and legislation, Michael Davis, and I am also accompanied by
    General Hans VanWinkle, who is Deputy Commanding General for
    Civil Works, Army Corps of Engineers.
        Mr. Chairman, I want to just say, first of all, I think we
    have given you a complete testimony for the record. I'm going
    to shorten my oral testimony significantly to allow more time
    for questions and answers and give you more time to get at some
    of the issues you want to get at.
        I do want to say that I have enjoyed very much and continue
    to enjoy working with you on the many issues we are facing this
    year. We are, obviously, in the throes of some very, very
    important decisions that your committee has to make, that we,
    as an Administration, are making on a daily basis in light of
    this program's challenges.
        I think the better that we work together with you in
    addressing these issues and getting answers to your questions
    and coming up with some sense of a strategy for the future, the
    better off I think our country will be, because I think we have
    a great asset in the Corps of Engineers and I think we need to
    develop a plan for how we are going to address a lot of these
    problems you've raised, like the backlog issue and mission
    definitions and things like that.
        So I look forward to working with you, both here and in the
    committee formal structure, but also informally with you and
    members of the committee.
        Mr. Chairman, let me just make--as I said, I just want to
    be very brief on our bill and give you some highlights of the
    things I think are very important proposals that we are making
    in this WRDA 2000.
        As you know, the main centerpiece of this bill is the
    Everglades, and you've already alluded to the hearings and the
    testimony we've had on that. We also felt this year that we
    needed to provide you with a piece of legislation that was less
    project oriented and more oriented toward some very important
    policy ideas that we wanted to bring forth to the committee and
    to address on a more national basis.
        For us, for the President, the important areas to address
    here were simply to get to the issues of how do we provide
    assistance to tribal and low-income communities. What can we do
    to help?
        You made one of your three points that you had alluded to
    as a concern was the idea that we needed to preserve the
    partnerships and the cost-sharing formulas that had been set up
    in the 1986 water resources bill.
        We agree with that, but I think it is time that we all
    collectively--Congress and the Administration, this and future
    Administrations--look at cost sharing and see what impact it is
    having on certain sectors of our economy.
        Again, I particularly would focus on tribal and low-income
    disenfranchised communities, which may involve both minority
    communities, as well as rural communities.
        In this bill, we did look at a number of policy issues that
    we wanted to bring forth, beginning with a watershed and river
    basin assessment authority.
        We believe that it is very important that, as we move into
    sort of the new dimensions of our work, which encompass so much
    environmental legislation and so many other pieces of
    legislation that have to be addressed as we build projects or
    as we design and plan and study projects, that we need to look
    at what we are doing in a more comprehensive, broader basin
    watershed approach.
        I don't think there is any disagreement anywhere that this
    is the approach that best suits the way we can make decisions,
    and so we are asking for a clarification or readdressing of
    this authority, which is established in section 29 of the water
    resources bill of 1986, to give the Corps of Engineers the
    authority to undertake broader comprehensive studies in
    conjunction with other Federal agencies.
        Bear in mind that the products of these comprehensive
    studies would not necessarily mean more Corps projects. It
    could very well be that these studies will assist EPA,
    Interior, or a vast number of Federal and State agencies, and
    especially the States, I think, in addressing the broader
    programmatic aspects of what is going on on river systems
    around the country. We believe that is an important part of
    this bill.
        Two areas that are related to this that we are proposing is
    we are proposing to get more involved and more active
    participation on the part of the Corps of Engineers in the
    CALFED Bay Delta program. The Corps, because of its basically
    project-driven type of program, has not been a real partner in
    CALFED, and much of the work that is anticipated and much of
    what I think we are doing in California relates to the work
    that CALFED ultimately needs to be a part of.
        We have got a major comprehensive study going on of the
    Sacramento and San Joaquin Rivers, and I think those need to be
    a part of how we look at CALFED solutions, so we are asking for
    authority for the Corps to have the ability to participate
    fully in CALFED as an equal member to the other Federal
    agencies.
        We also believe that, while there is a lot of work going on
    in the Puget Sound area with a variety of projects under
    different Corps authorities, environmental restoration
    projects, that, again, this is an area where we need to get
    ahead of the problem, particularly dealing with endangered
    species issues, so we are proposing there an authority that
    allows us to engage in some or initiate a series of what we
    call ``critical projects,'' which essentially would be small
    projects that would be seen as a comprehensive effort to
    address the broader issues in the Puget Sound area. So these
    projects would all be tied together. They would all be
    evaluated on the basis of how they programmatically affect each
    other.
        Now, we think our proposal is also very complementary to
    legislation that is being introduced in the Senate or has been
    introduced in the Senate by Members from the Washington
    delegation. We would go right to projects, and we think that
    that's important.
        The other area of policy you brought up, and that's
    brownfields. We are doing a considerable amount of brownfields
    work already through EPA. What we believe is being neglected
    here is a very important part of this dimension of brownfields,
    and that's the part that relates to the waters of the United
    States. That's the part that relates.
        Senator Lautenberg mentioned the New Jersey project. These
    are projects where you've got sites that are adjacent to or on
    wetlands or river systems or water bodies where there are
    problems that are pretty significant to both communities and to
    also the economic growth of these areas and the possibilities
    for economic development.
        We believe that it is our responsibility under our mission
    in the water resources area to try to address these
    programmatically, ourselves, indirectly, so we are asking for a
    very small, a very conservative authority, both budgetarily and
    project specific, to allow us to go into these specific areas
    and do some brownfields remediation.
        The Conference of Mayors--I saw a study where they had
    identified somewhere in the vicinity of about 20,000 sites that
    are in dire need of cleaning up, and for which there are really
    no resources at the State or local levels.
        Mr. Chairman, we also have a series of provisions, as I
    mentioned, where we are really trying to identify those aspects
    of tribal and low-income communities where we can be helpful.
    We are proposing a tribal partnership program. What we want to
    do here is basically partner up with the tribes with the
    Department of Interior to look again comprehensively within the
    boundaries of the reservation to see what we can do in areas
    like environmental restoration, flood control, and our other
    traditional mission areas to help and to coordinate the work
    that the Department of Interior is doing in these areas.
        We are also proposing some changes in our ability to pay
    provisions. Currently, the ability to pay provisions that you
    have authorized in the past are for flood control and for water
    supply for agriculture. We are asking to amend that to allow us
    to do equal ability to pay provisions for the environmental
    restoration and environmental protection kinds of projects.
        We also are asking the committee to consider some changes
    in our project deauthorization provisions to tighten these up,
    to make it--to have the time aspects of when we deauthorize
    projects a little bit shorter, cutting it back from 7 years to
    5 years, where we can look at projects, if they don't receive
    funding for construction within a 5-year period, and
    consistently throughout a 5-year period they would
    automatically become deauthorized.
        We think this is not the solution to the backlog problem,
    but it is part of the solution. It is part of the way we get at
    this issue.
        Finally, Mr. Chairman, we are also providing you with a
    recommendation on making some changes in our flood damage
    reduction program, a change in the cost-share on this for
    structural flood control projects, and also to strengthen our
    floodplain management requirements in section 402 of the Water
    Resources Act of 1986 to require the non-Federal interest to
    take measures to preserve the levels of flood protection that
    projects provide.
        This is a recurring theme, where we build a project
    designed for a certain level of flood protection, local
    development ensues, changes happen over time, and we find out
    that the project is no longer really providing the level of
    protection that was intended.
        We need to get some help from the local communities through
    some type of management plans that they are going to try to
    maintain and we're going to try to work with and to maintain
    the levels of flood protection originally intended and
    authorized by Congress.
        That's a brief summary, Mr. Chairman. Again, there are
    other aspects of this bill that you may want to touch, but I do
    appreciate the opportunity to testify before your committee
    again. I thank you for your efforts to address these issues and
    look forward to working with you in any fine details of working
    this bill through as you get to a markup.
        Thank you, Mr. Chairman.
        Senator Voinovich. Thank you.
        Does Mr. Davis or General Van Winkle have any comment?
        General Van Winkle. No, I do not.
        Senator Voinovich. Senator Thomas has joined us.
        Senator Thomas, do you have any statement the you'd like to
    make?
        Senator Thomas. No, I don't, Mr. Chairman. Thank you. I'm
    just interested in hearing the testimony.
        Senator Voinovich. Great. We will move on to the questions,
    then.
        Dr. Westphal, Claudia Tornblom, Deputy Secretary of the
    Army for Management and Budget, testified when we had our
    hearing on the backlog of Army Corps projects, and what really
    puzzles me is I've heard you today, and you're saying, ``Well,
    you know, we've had our local share or more Federal share,
    brownfields, and so forth.'' The fact of the matter is there
    has been mission creep in the Corps of Engineers. You have been
    taking on more and more projects. This environmental
    restoration, a very worthy issue, has been added to the Corps'
    work. We had charts that were presented last week when we had
    the hearing to show that we were spending the equivalent of
    about $5 billion a year on WRDA type projects back in the
    1960's, and then it went down to about $4 billion in the
    1980's, and now, during the 1990's, we're down to about $1.5
    billion a year.
        It seems to me that, here you are this morning, and you're
    talking about a very ambitious program, and yet the
    Administration has come through with a paltry $1.6 billion in
    terms of their request for Congress to appropriate for these
    projects.
        It seems to me that this is a major issue, and I would like
    to know why it is. I mean, you're asking for more and very
    ambitious. Why hasn't the Administration asked for more money?
    The fact that we need another $1.5 billion in order to just
    stay even with these projects, why hasn't the Administration
    come forward and asked for additional dollars?
        Mr. Westphal. Well, Mr. Chairman, first of all, we didn't
    ask for additional dollars for authorities we do not have, so
    what we were constrained by in our budget recommendation were
    really the projects and the authorities that we have presently.
        What we believe is that, in fact one of the areas you
    mentioned in your opening statement, you talked about what we
    call--a rather ``catch-all'' term for what we call
    ``environmental infrastructure.'' You mentioned sewage
    treatment plants and waste treatment plants and that type of
    thing. There is a growing demand around the country for us to
    participate in some of these activities. There are areas,
    particularly rural areas, for example, in Appalachia where
    there is a considerable amount of need locally to address water
    quality needs by cleaning up water.
        There is an increasing pressure, both from Congress and
    from local constituents, to get us into that picture, because
    the loan pay revolving fund you mentioned isn't adequate the
    meet the national needs, so a $1 billion or $2 billion fund--
    whatever it is, I don't know the exact amount--to meet about
    probably a $200 billion need around the country.
        So we are facing the increasing interest on the part of
    Congress and on the part of mayors and local constituents and
    States to get into this area, but we are not--the
    Administration did not propose projects in this area, did not
    request continued funding for projects that had been funded in
    the past in this area.
        So I think our budget request was very responsible, given
    our constraints and our backlog.
        Now, we are asking----
        Senator Voinovich. I mean, if you look at the record, they
    are inadequate. I mean, the point is that you have expanded
    during this last Administration into a lot of areas--
    environmental restoration, very expensive projects. We've got
    some other projects here that are in this budget that are very
    expensive.
        It seems to me that, consistent with the request, should
    have been the research for additional dollars and that there
    should have been some reallocation of resources to say, ``We
    have these unmet needs. We are asking for more money. We know
    that this is not adequate,'' and an effort should have been
    made in order to come up with some more money.
        You've got all these people are sitting here and they
    expect they're going to get these projects authorized and the
    money is going to be forthcoming, and the fact of the matter is
    there ain't no money.
        We've got the appropriations. I'm just saying that this
    is--you know, it doesn't make sense to me.
        Mr. Westphal. I'm not arguing with you, and I think you are
    right, to a great extent. We were limited, as your
    appropriators are limited, by the constraints of the budget
    agreements that were made earlier and by what were then, when
    we were putting together our budget, some pretty limited caps
    on our budget allocations. So the budget we submitted was based
    on a very constrained view of what was going to happen with
    what flexibility--what was going to happen with respect to----
        Senator Voinovich. Let me just say this: we've got a bill
    that just passed the House. It is called CORA. It is asking to
    use the offshore revenues from oil to come in with a new
    entitlement to pay for a lot of wonderful programs. Does the
    Administration support that legislation?
        Mr. Westphal. The Administration has supported aspects of
    that legislation. I can't tell you specifically whether the
    bill got full Administration support. I don't know.
        Senator Voinovich. Well, I'd look into it, because that
    money now is being used to reduce the national debt, but if I
    were in the Administration, I'd be arguing that, before we go
    off with the new program, a new entitlement program with the
    unmet needs that we have here with WRDA, that it doesn't make
    sense, and that if we've got this money and people want to
    spend it in this area, then let's use it to pay for these unmet
    needs in WRDA.
        I've run out of time. Senator Baucus?
        Senator Baucus. Mr. Chairman, Secretary, as you know, in
    the agricultural appropriations bill there is a rider which
    essentially prohibits the Secretary from restructuring,
    reorganizing, abolishing, transferring, etc., etc., and it is
    probably in response to forums that--and I use that word
    advisedly--that you proposed at the end of March. Could you
    comment please on that rider, the degree to which it would help
    you or hinder you in your efforts to perform perhaps more
    increased oversight and, perhaps as a result of some articles
    that have been in the ``Washington Post'' lately, but basically
    will that rider on that appropriations bill help you or hurt
    your efforts to make the Corps more efficient, organize it, and
    why.
        Mr. Westphal. Well, I believe the rider is a pretty severe
    constraint on the President's ability to manage government. I
    believe that if you--the last one that I read, the last version
    of it that I read--and I assume it's the final version that was
    in the legislation--did not specifically mention who was
    prohibited, other than that no moneys could be spent.
        The way I read that, it meant that no one--no chief of
    engineers, no Assistant Secretary of the Army, no Secretary of
    the Army, no Secretary of Defense, no President--no one could
    in any way, shape, or form do any reorganization or
    streamlining or correct any aspects of the way the Corps has
    managed or organized our structure.
        Now, typically, I mean, generally speaking, any major
    reorganization of the Corps of Engineers would require
    Congressional approval. The last time that happened was a few
    years ago, before I came on board, and it was quite a long and
    arduous process that eventually ended with Congressional
    approval of it. And Congress has been quite active in making
    sure that that reorganization continues to go on the path that
    Congress approved.
        What the Secretary tried to do here, in light of all that
    was going on, was simply to make a clarification--and I think
    the term ``reform'' was probably an exaggeration of what it
    is--is to make a clarification as to what the law passed by
    Congress, by the Senate and by the House, title ten, really
    specifies.
        For the most part, it states very clearly what the chain of
    command is, where the authorities lie, and they are all in law,
    and it was merely clarifying the law. It was merely stating
    what title 10 says. He was merely expounding on already
    existing, pre-existing general orders of the Secretary of the
    Army that have been around for years, and I think it just got
    exaggerated in terms of what that implied.
        I think that there were concerns that that meant that
    somehow the Secretary of the Army would be preventing the Corps
    from having a direct relationship with Congress or be able to--
    would limit the ability of the Corps to provide information to
    Members of Congress, none of which was ever anticipated or
    planned or intended by the Office of the Secretary of the Army.
        Senator Baucus. So it is your belief that perhaps the
    sponsors of that rider are mistaken as to the intent of the
    Corps' court reforms?
        Mr. Westphal. Well, I understand their concerns and I
    understand there has been so much in the press and there are so
    many rumors and allegations and things flying around in the
    back circles of the House and the Senate and in Washington, in
    general, that I understand their concern. But I do think if we
    are given the opportunity to explain what the Secretary really
    was proposing to do here, then I think their concerns would
    be----
        Senator Baucus. So you think their concerns are being
    significant alleviated, but you are also saying, if I hear you,
    that the rider virtually prevents the Corps from making any
    kinds of----
        Mr. Westphal. Well, the Chief of Engineers, for example, is
    in the process of--the current chief is in the process of doing
    some reorganization of the Corps, pretty significant
    reorganization, particularly here at headquarters, and I
    believe that, under that authority, that language, he would
    have been prohibited from doing that, and we----
        Senator Baucus. Yes. I'll read the language.
    ``Notwithstanding the provisions of 10 U.S.C. . . . . none of
    the funds made available in this or any other act may be used
    to restructure, organize, abolish, transfer, consolidate, or
    otherwise alter or modify the organizational or management
    oversight structure, existing delegations, or functions, or
    activities applicable to the Army Corps of Engineers.''
        That, to me, sounds like none of the funds could be spent
    to do much of anything within the internal administration of
    the Corps.
        Mr. Westphal. The Chief of Engineers, himself, has
    management responsibilities, and, to some extent, oversight
    responsibilities over his districts and divisions, and this is
    a very big organization, and we'll have a new Chief of
    Engineers coming on board very soon, I hope, pending
    confirmation by the Senate, and----
        Senator Baucus. I know my time has expired.
        One other question. As you know, Senator Daschle has
    introduced a bill to establish a commission to study the
    Agency's operations and recommend any potential reforms to the
    Congress within 2 years. What is the Administration's position
    on that bill?
        Mr. Westphal. Well, the Administration has been working on
    the bill. I believe the Administration supports the concepts of
    Senator Daschle's bill. I think that they are looking forward
    to working with Senator Daschle on the more-specific details of
    his proposal, but the concept is something the Administration
    supports.
        I spoke with Senator Daschle yesterday on this bill, and I
    think he is very willing to work with the Administration to
    fine tune it to the extent that we can----
        Senator Baucus. What are the options? At least one draft of
    the bill is for the commission to study whether it is a good
    idea to separate the civil works function from the Army. What
    is your view on that?
        Mr. Westphal. Well, I believe that--my personal feeling is,
    of course, that I believe the Army Corps of Engineers belongs
    in the Army, and I think that the traditions and the culture
    and the way in which the program is managed and the
    responsiveness of the Corps of Engineers is a great asset to
    the Nation, at least partly because it is an Army organization.
    I believe, personally, that it is in the right place.
        Senator Baucus. Thank you. My time has expired.
        Senator Voinovich. Senator Lautenberg?
        Senator Lautenberg. Thanks, Mr. Chairman.
        Dr. Westphal, one of the questions that has already been
    touched on here that I would like to pursue for just a moment
    is the brownfields program and the assistance by the Corps of
    Engineers. The question raised is, well, why the Corps should
    be involved in yet another project. The fact of the matter is
    that we do ask so much of you, and I think the chairman kind of
    hit it on the head--more work, less money. It doesn't work
    well.
        What is the importance of the Corps' involvement with the
    brownfields project? You have very specific criteria, and I
    would like you to restate those.
        Mr. Westphal. Well, Senator, most important, I think, is
    the fact that the Corps of Engineers has the capacity, the
    capability, the talent, the skill, the people to do this kind
    of work, and there are very few others able to do it.
        We are, for the most part, the agency that carries out the
    technical work of the Superfund program, and we do it very well
    for brownfields. I don't know if General Van Winkle health as
    statistics on that.
        Senator Lautenberg. Wasn't the focus of your attention, the
    Corps' attention to this, the fact that it might be in an area
    that could contaminate tributaries, streams, etc., and that
    that then expands the risk that this site can produce
    additional pollution because it is not a wholly contained
    entity.
        Mr. Westphal. Right. I mean, many of the brownfield sites
    around the country are, of course, around and on the shores of
    our major rivers and streams, and that is an area where it is
    of real concern because of the movement of sediment, because of
    the dangers it poses to surrounding development. So, as you
    develop these inner harbor areas, as in the area that you
    represent, where there is increasing requirement and demand for
    development closer and closer to the water, this becomes even
    more and more critical.
        Senator Lautenberg. The focus of your interest and your
    recommending Corps involvement here is in those sites--are we
    specific--those sites that have some additional risk posed as a
    result of their nearness to a stream or a river?
        Mr. Westphal. Or where there are wetlands affected or
    waters of the United States. We are not asking for authority to
    go in and work in areas that are totally--say an area that is
    totally on upland. We would work through EPA on that.
        Senator Lautenberg. I just wanted to be sure on that. You
    know, we are kind of fixated on this dredging project. We have
    been kind of stalled in a bi-State dispute, and it is
    worrisome. But another question that has been raised that
    creates a lot of attention is, what do you do with the
    disposable material? We know that there is material that
    qualifies, under EPA standards, for ocean dumping because the
    contamination levels are not critical. What are the plans for
    disposal of other material that doesn't meet that yardstick?
        Mr. Westphal. Well, currently there are a number of areas
    for disposal of contaminated material that don't meet the
    standards for ocean disposal. Frankly, as you well know, in
    that particular part of the country where the need is great and
    increasing, we are probably going to have to work closer with
    the States of New Jersey and New York to find additional sites
    in the future. But we do have capacity, and certainly in your
    State there is a good deal of capacity to address the future
    needs and near-term needs of contaminated dredge material.
        The Corps, again, is doing, I think, a terrific job. I have
    been on those sites a number of times. They are doing a
    terrific job in New York and New Jersey Harbor, both in terms
    of the science and working with the local communities to find
    these sites and develop these sites, and I think it is a very
    difficult job but they're doing a great job.
        Senator Lautenberg. We're talking about land disposal.
        Mr. Westphal. Right.
        Senator Lautenberg. And it is your contention, as I just
    heard it, that in New Jersey there is adequate place for it.
    That would surprise a lot of people in New Jersey. We think
    that there is a lot of room in New York State for disposal.
        Mr. Westphal. Well, you know, I am cognizant of that issue,
    and I believe that the State of New York is making an effort to
    find its future sites, as well.
        Senator Lautenberg. I thank you.
        Mr. Westphal. We'll work with them to do that.
        Senator Lautenberg. Thank you.
        Thanks, The Chairman.
        Senator Voinovich. Senator Chafee?
        Senator Chafee. Thank you, Mr. Chairman.
        Mr. Secretary, in your prepared testimony you say that,
    ``Pursuant to the Water Resources Development Act of 1986, the
    Army civil works program began to change in response to the
    many new water resources challenges facing this Nation.'' So it
    has been 14 years of a changing mission.
        My question would be: in the course of this change, your
    relationship with EPA, how has that been a cooperative
    partnership, and how do you see it continuing into the future?
        Mr. Westphal. Well, I think the relationship has improved
    dramatically over the years as the two agencies have had to
    work closer and closer together. I think there are areas in the
    country where it works very, very smoothly, and then there are
    other areas where, because the issues are so controversial and
    so difficult, sometimes the relationships are a little bit
    strained. I mean, that's the reality, to be perfectly honest.
    But overall I think the leadership of both agencies, both at my
    level, at the regional levels, are very, very good.
        To cite again New York and New Jersey, as an example, where
    there is so much controversy going on over so many issues, the
    regional administrator of EPA and our division commander and
    district engineer have a very, very good working relationship
    and very, very consistent and good dialog on all these issues.
        I believe that the future requires that. I think the States
    must be treated fairly, and for the States to be treated fairly
    these Federal agencies have to work together and have to have
    better relationships and better communications, and they have
    to have that communication, I believe, from the beginning for
    it to be really successful.
        Part of the problem we face at times is that sometimes the
    communication isn't as good at the very early stages of a
    project, and then suddenly toward the end we find that we've
    got problems. We've got to remedy that, and I think we are
    working to do that.
        The Council of Environmental Quality is very concerned
    about that, and I think working to try to bring regional folks
    together to work better at the early stages of a project.
        I don't know if that answers your question, but----
        Senator Chafee. Yes. Thank you very much. I'm sure that
    whenever the standards are high there is going to be tension.
        Mr. Westphal. That's right. Well, there is tension because,
    obviously, our agencies are driven by different missions. EPA
    is a regulatory agency, the Corps is a construction--it's a
    builder. The Corps' mission--you know, the Corps sees its
    mission, it has an authorization, it has an appropriation, it
    has a bill signed by the President. It wants to move forward.
    And then it must and has to comply with all Federal laws, and
    in doing that it has to interact with these other agencies
    that, to some extent, have either a check on the process or
    have a great deal to say that will impact future decisions or
    possibly send these cases to the courts.
        We spend a great deal of time, Senator, in trying to keep
    these projects outside of the courts. A lot of our motivation
    is to say, ``Let's work together to avoid future litigation,
    because that inevitably costs the taxpayer a significant amount
    of money, and we are trying to avoid that as much as we can.''
        Senator Chafee. Thank you.
        Senator Voinovich. Senator Thomas?
        Senator Thomas. Thank you, Mr. Chairman.
        I guess I would be derelict if I didn't remind you again
    that I asked some questions and submitted them three hearings
    ago and have not yet gotten a response.
        Mr. Westphal. Yes, Senator. I was told that. I wasn't at
    the hearing last week. I think you brought that up, and I was
    told that those questions have now been answered and I believe
    were delivered or should be delivered to your office today or
    yesterday. I apologize for that.
        Senator Thomas. I don't think they were yesterday. They may
    be today. Anyway, I appreciate that.
        I won't take long. I guess I have to pursue a little bit
    the same thing. You mentioned here you are involved with Indian
    lands on the transfer of lands from Indians or from a project.
    Why would Corps of Engineers do that? Why would you be involved
    in a study of economics, of culture, and so on? Just, you know,
    when we are seeking to identify the role and justify the
    financing for an agency, why would you be in that field?
        Mr. Westphal. Well, there are two different proposals in
    this WRDA bill. One is we continue to be asked quite a bit by
    tribes around the country to help in a variety of different
    ways, and we don't have a mechanism for directly working with
    the tribes on many of these issues that are water-related--that
    are environmental restoration types of projects. We don't have
    a way of doing that very easily.
        What we are asking is the authority to be able to work with
    a tribe in essentially doing the same kinds of projects that we
    would do in other parts of the country, but doing them through
    the Department of Interior and through the tribe, directly.
    That's one authority.
        The other area is that, as a result of the Pick Sloan
    project, we've got lands that obviously belonged to the tribes
    at one time that we believe can be transferred in the future to
    these tribes. They are surplus lands. They are lands that would
    certainly add some benefit to the tribes. We don't see a
    problem in terms of the operation of our projects, and we
    simply are looking for the authority to be able to do some
    assessment or study of how we would transfer those lands and
    the economics and the environmental requirements of doing so.
        Senator Thomas. There are other people who do that
    professionally, you know.
        In land management, you point out here the number of
    recreation areas and all those things. There are a number of
    land management agencies in the Federal Government. If we were
    to sit down and take a look at reorganizing for the purpose of
    being most efficient, would you be managing recreation areas,
    do you think?
        Mr. Westphal. Well, you know, all our recreational areas
    are attached to our projects----
        Senator Thomas. Yes, I know, attached to water. That's what
    you'll say about everything we ask.
        Mr. Westphal. Right.
        Senator Thomas. But there are a lot of things that are
    managed that are attached to water that aren't managed by the
    Corps of Engineers.
        Mr. Westphal. Right.
        Senator Thomas. They are recreation areas. They don't have
    anything to do really with the water except the water is there.
        Mr. Westphal. Right.
        Senator Thomas. I don't mean to be argumentative, but it
    seems like you are very defensive about not only doing
    everything that you've done since 1776, or whatever you put out
    here, but, indeed, wanting to expand it, when we ought to be
    looking at ways to make this government more efficient, combine
    agencies that do things, submit more things to the private
    sector than we do now, and you appear, Mr. Secretary, to be
    wanting to embrace everything you can get your hands on. Is
    that a fair analysis?
        Mr. Westphal. I don't think so, Senator. Let me tell you,
    on the recreation we would like to privatize a good deal of our
    recreation, but, frankly, won't get any takers because it is in
    such bad condition, and because of----
        Senator Thomas. You've been a great manager then, haven't
    you?
        Mr. Westphal. Well, funding is a problem.
        Senator Thomas. Of course it is a problem.
        Mr. Westphal. And our recreation--in order to make a
    transfer of a recreation to a private sector, they are required
    by Federal law to do feasibility studies, which are fairly
    costly, so if they are going to engage in taking over
    recreation facilities, they've got to put out a considerable
    amount of money.
        So what we're trying to do here on our recreation
    modernization, which is in our appropriations request we made
    this year, was to, candidly, bring some of these recreational
    areas to--we'd say ``modernize'' them, but we are talking about
    fixing them up so that they are reasonable and decent for
    people to use.
        We are not looking for more recreation. We're not looking
    to expand our recreation program. If anything, we would be
    delighted to be able to have more opportunities to lease some
    of these recreation areas or to privatize them.
        Senator Thomas. I bet you could, and I'll be happy to help
    you.
        Mr. Westphal. Good.
        Senator Thomas. You know, finally, more of a comment, you
    are talking about doing these things. We're finding this
    Administration expanding more and more without coming to the
    Congress. If you want some authorities or don't have
    authorities and so on, why don't you put together a package and
    bring it to the Congress? I mean, I think that is the system.
        The idea that you just reorganize and say, ``Well, we need
    the authority to do that,'' I don't agree with that. We're
    seeing that in the Forest Service. We're seeing it in BLM.
    We're seeing it in the land management agencies just kind of
    going around the Congress. I think you're going to find a lot
    of opposition to that idea. If you think you ought to change
    some things, you ought to put together your package and say,
    ``Here's what we ought to be doing,'' and bring it in, rather
    than just going on. I just feel strongly about that.
        Mr. Westphal. I agree with you, Senator, but I think our
    agency is very responsible in that capacity. I mean, I think
    some of the things that are in this WRDA proposal that we are
    asking you to consider are things that we can, to some extent,
    if we stretch it the way you are saying, we could probably do
    some of these things.
        Senator Thomas. I'm not talking about what you do. I'm
    talking about how you organize and what your mission is. Now,
    if you are going to expand your mission by taking on different
    projects all the time, it just seems to me that, in a
    management standpoint, we ought to establish uniformly so that
    we all agree, ``here is the mission,'' so that then we can look
    at the things you recommend and say to ourselves, ``Is this
    working to accomplish the mission?'' But we don't do it that
    way. We kind of keep the mission a little bit secret and just
    keep adding projects to where, finally, when you get to a
    point, no one knows what the hell the mission is.
        I just sense a little of that. I understand the difficulty,
    but I wish you would think about it a little bit--defining
    where we want to go and where we want to be in 20 years so that
    we can measure and you can measure the steps we are taking to
    see if, indeed, we are going to accomplish that goal.
        Mr. Westphal. Senator, that is a good idea. And we are
    working on the development of our strategic plan, and I'll try
    to make a point of bringing that to you as we develop it and--
    ----
        Senator Thomas. I would appreciate it.
        Mr. Westphal [continuing]. Work with you on that, because I
    think that is a vehicle for doing what you are suggesting.
        Senator Thomas. Sure. And I appreciate that. Thank you,
    sir.
        Mr. Westphal. Yes, sir.
        Senator Voinovich. Dr. Westphal, I've got a couple more
    questions. One is a comment, and that is that the brownfields
    projects--and I can see the logic that it is close to the water
    and so forth--are being done, but I understand that it is being
    done on a reimbursable basis.
        Mr. Westphal. Yes, sir.
        Senator Voinovich. And now you want the Federal Government
    to come up with some money to take care of it, and I think one
    of the members of this committee wants even more money for
    brownfields. Again, with the backlog of projects and the other
    projects, to come in and say--it's, like, 25 now, and then it
    is 50, and before you know it, it gets back to what I think
    Senator Thomas was making, is that you've expanded the mission
    and the issue is you don't have the resources to do it, so you
    really ought to concentrate on the things that are fundamental
    to the core Corps responsibilities.
        In regard to cost sharing, the Administration's bill
    modifies authority in WRDA 1986 to authorize river basin and
    watershed planning studies to be cost shared on a 75 percent
    Federal/25 percent non-Federal. WRDA 1986 established study
    costs of 50/50. As already mentioned in my statement, where you
    have many jurisdictions involved, I think it is important that
    you have good cost sharing, because in the beginning on
    planning--it is much easier to get them together after the
    study is completed. Why the change? Why the recommendation for
    more money?
        Mr. Westphal. Primarily because I think these low-income
    tribal communities simply can't meet the requirements, and
    therefore they get left out of the picture.
        You know, part of what cost sharing--and I'm going to give
    you sort of my personal view here--what I've seen in my short
    tenure here is that, you know, we have got a law that we passed
    in 1986. Now it is the year 2000 and we need to look at what
    the impact is.
        We are having a lot of communities out there that have the
    resources, have the money, can raise funds, can raise taxes----
        Senator Voinovich. This is for river basin. I'm not talking
    about the tribes. I'm talking about river basin.
        Mr. Westphal. OK. On the river basin, the study proposed--
    the study authority, that traditionally is 100 percent Federal,
    and on this one we are moving to bring more local share so they
    can have a buy-in to the whole idea of assessing the broad
    watershed, if that's what you're talking about, that's the
    provision you're talking about.
        Senator Voinovich. No. What I'm talking about is the
    rivershed basin and watershed planning studies to be cost
    shared on a 75 Federal/25, and in the past it is 50/50. You're
    just asking for more Federal money.
        Mr. Westphal. No. On the existing authority, section 29, I
    believe that's 100 percent Federal, and so we are moving that
    to a 75/25.
        General VanWinkle. Senator, if I could help out, I believe
    that certain of our studies--729 was on the books previously,
    and that was at 100 percent Federal--had not been used to a
    great deal. Our other larger studies had been cost shared at a
    50/50, so there really were two different types of projects
    involved in this, one under the previous authority, which had
    been 100 percent, but not much used. The normal sorts of
    studies that we do, which were typically cost shared at 50/50--
    and so this would sort of meet at the middle. Larger watershed
    basins in the proposal is to cost share at 75/25 percent--to
    make sure we understand.
        Senator Voinovich. The only point I'm making, it's more
    Federal money.
        The Administration bill includes an authorization, short
    appropriation, of $5 million to participate in the CALFED Delta
    program, and we understand the program has been receiving a
    large Federal appropriation through the Bureau of Reclamation.
    Again, what is the justification for the Corps' participation,
    you know, $5 million in regard to a program that has been
    receiving quite a bit of money from the Bureau of Reclamation?
        Mr. Westphal. This is essentially for our ability to
    participate in this program as an equal partner with the other
    agencies. Again, because of our funding nature being project
    driven, as we are, we have no flexibility in our budget to
    fully participate in the CALFED initiatives.
        Now, we do have some fairly big projects that are ongoing
    that have been funded under separate authorizations by Congress
    that will inevitably be part of the overall CALFED solution,
    but what we want is the ability for our district and divisions
    there in California to be fully involved and engaged in the
    CALFED decision process, and that's why we are asking for this
    authority.
        Senator Voinovich. Senator Baucus, did you have any more
    questions?
        Senator Baucus. Yes, Mr. Chairman, just a couple of brief
    ones.
        The first one, Secretary, is with respect to deauthorizing
    Corps' projects. It is my understanding that there are about
    123 projects in backlog with an estimated cost of $4.5 billion
    that are eligible for deauthorization under current law, and I
    further understand and heard you say in your testimony that
    you'd like to tighten that up a little bit, including automatic
    deauthorization of projects not receiving construction funds
    during any consecutive 5-year period, and then you tighten it
    up a little more.
        Assuming we were to pass that recommendation of yours, how
    many more additional projects would be deauthorized? Do you
    have that data, that figure?
        Mr. Westphal. I don't. I think we'd have to get you that
    for the record. We'd have to look at it.
        We had some conversations, after the hearing last week,
    that we needed to actually look at those kinds of numbers, so
    why don't we put those together and try to get you those
    separately.
        Senator Baucus. So, just to clarify for everybody--I think
    the chairman is asking the same question--an authorized project
    must receive funds during seven full years immediately
    preceding the transmittal of the list to Congress to remain
    authorized?
        Mr. Westphal. That's generally--you know, that could be
    study money.
        Senator Baucus. Exactly right.
        Mr. Westphal. Right.
        Senator Baucus. That could be study money, that could be
    anything, and that's why you are suggesting automatic
    deauthorization for any project which construction is not
    initiated within 7 years of authorization.
        Mr. Westphal. Within 5 years.
        Senator Baucus. Pardon?
        Mr. Westphal. I'm sorry. Right.
        Senator Baucus. Seven years----
        Mr. Westphal. Right.
        Senator Baucus. And otherwise no funding construction funds
    during any consecutive 5-year period.
        Mr. Westphal. Right.
        Senator Baucus. Those are both additional limits that you
    are suggesting.
        Mr. Westphal. Right.
        Senator Baucus. I'd appreciate if you could get that
    information to us. That is how many more would be
    deauthorized----
        Mr. Westphal. We'll do that.
        Senator Baucus [continuing]. As a consequence.
        [The information referred to follows:]
        Senator Baucus. One other point on environmental
    restoration--and it is clear that some of the restoration
    projects are a consequence of adverse impacts from Corps
    projects, and for that reason many feel that there should be
    some environmental restoration.
        I'm just curious what the Corps is doing now to prevent
    degradation of the environment in Corps projects now.
        Mr. Westphal. Well, there has been clear guidance from
    Congress. I can actually quote it for you. In the 1990 water
    resources bill, section 306, it stated that the Secretary of
    the Army shall include environmental protection as one of the
    primary missions of the Corps of Engineers in planning,
    designing, constructing, operating, and maintaining water
    resource projects.
        Would that guidance to the field make that a requirement?
    The Corps must comply with all current existing Federal
    regulations dealing with the environment.
        Senator Baucus. What about projects, though, that were
    authorized before NEPA, before the Endangered Species Act? I
    mean, is there need for environmental restoration there?
        Mr. Westphal. Well, sometimes there is, and we are
    engaged--we have the 1135 authority that allows us and permits
    us to go back and review those projects and modify them as
    needed. Generally, we've got a lot of those projects going on
    around the country. It's pretty significant. I don't know what
    the number is off the top of my head, but----
        Senator Baucus. And I understand there is some concern
    about so-called ``mission creep,'' but, you know, my view is
    I'm less concerned about who gets the job done so long as the
    job gets done. I just urge us to kind of keep an open mind when
    we look at this question.
        Thank you.
        I thank the chairman.
        Senator Voinovich. Senator Lautenberg?
        Senator Lautenberg. Nothing more, Mr. Chairman.
        Senator Voinovich. Senator Chafee?
        Senator Chafee. I want to thank you very much. We look
    forward to continuing to work with you as we put the bill
    together.
        Thank you, Mr. Chairman.
        Senator Voinovich. Our next panel is going to consist of:
    Doug Sutherland, county executive for Pierce County,
    Washington, on the Puget Sound restoration project; Lillian
    Borrone, director of port commerce, Port Authority of New York
    and New Jersey on the Port of New York and New Jersey project;
    Barry Palmer, executive director of Dinamo on the Ohio River
    project; Mayor Dannel P. Malloy, City of Stamford, on
    brownfields; and Howard Marlowe, president of the American
    Coastal Coalition, on beach projects.
        I'd like to welcome all of you here this morning, and we'll
    begin with Mr. Sutherland.
        Senator Baucus. Mr. Chairman, I'd like to welcome Mr.
    Sutherland, who is from Montana.
        Mr. Sutherland. Hi. Thank you very much, Senator. I,
    indeed, was born in Helena, Montana, a number of years ago, and
    my family was long time and still many of them in that branch
    of the family are still there. I'm part of the black sheep of
    the family, and we migrated west.
        Senator Baucus. In any event, welcome.
        Mr. Sutherland. Thank you very much.

    STATEMENT OF DOUG SUTHERLAND, COUNTY EXECUTIVE, PIERCE COUNTY,
                               WASHINGTON

    ACCOMPANIED BY:
            DENNIS KENTY, KING COUNTY ENDANGERED SPECIES POLICY OFFICE
        Mr. Sutherland. Good morning, Mr. Chairman and members of
    the committee. Let me say first of all that I am truly
    appreciative of your invitation allowing me to come testify
    before your committee on this issue, the Water Resources
    Development Act of 2000.
        My name is Doug Sutherland. I am the county executive of
    Pierce County, which is the second-largest county in the State
    of Washington. Joining me today is Dennis Kenty of King
    County's Endangered Species Policy Office, who will be here to
    help answer questions, if there are any.
        I would like to speak about habitat restoration in the
    Puget Sound basis, the subject of section 19 of the
    Administration's proposal for the Water Resources Development
    Act of 2000.
        The motivation for this initiative is a crisis that we are
    facing with salmon populations in the Puget Sound. The decline
    of Salmon populations has resulted in several Puget Sound
    salmon stocks, such as chinook, chum, as well as gold trout
    being listed under the Endangered Species Act in the last year,
    and more salmon stocks are likely to be listed in the next 2
    years.
        The loss of Puget Sound salmon is a major economic and
    cultural, as well as environmental issue. The region once
    boasted one of the strongest commercial and tribal fishing
    industries in the west coast. Today, the Puget Sound fishing
    industry is on its last legs, and tribal and commercial
    fishermen face rampant unemployment and a very uncertain
    future.
        Recreational fishing for salmon used to be big business in
    the Puget Sound area, as well, with hundreds of boat liveries,
    bait shops, and boat and motor dealers dependent upon the
    annual salmon runs. Many of these businesses today are gone.
        The endangered species listings are likely to spread the
    economic pain to all sectors of the Puget Sound economy. We are
    already seeing major delays in crucial public works projects,
    including roads, bridges, and flood protection projects.
        Private industry is also feeling the pinch as new
    construction is delayed and modified to address these
    endangered species issues.
        So far, our economy in the Pacific northwest has allowed us
    to absorb the impact of these listings, but the fist big wave
    of new regulations are likely to go into effect within the next
    6 months. The potential consequences of the Endangered Species
    Act on our economy are huge, with every sector facing major new
    costs.
        I have been working with local officials and leaders of the
    business, terminal, and environmental communities for the past
    2 years to define a strategy to address the environmental and
    economic consequences of declining salmon runs. Our alliance,
    called the ``Tri-County Group,'' is in the final stages of
    developing a proposal to rebuild salmon populations in the
    Puget Sound area. One of our cornerstones of our proposal is to
    restore salmon habitat on our rivers and streams. After a
    century of farming and timber harvest and urban development,
    the dams and navigation projects, some of our rivers are,
    indeed, in poor shape for salmon production.
        Now, mind you, this listing of the Endangered Species Act
    is the first time that you've seen an act applied to a species
    that is over a significantly large area in probably one of the
    most densely populated areas affected by this listing.
    Scientists tell us that we will need an aggressive program to
    repair habitat if we are to have any hope of bringing salmon
    back to our rivers.
        Local governments in the tri-county area have pursued an
    aggressive strategy to rebuild salmon habitat in our region.
    Pierce, King, and Snohomish Counties and our major cities have
    spent more than $15 million a year in local funds to purchase
    and restore habitat since 1998, and we have committed more than
    $100 million in our own local funding to habitat projects over
    the last decade. This is not a new program for us. We have had
    great successes working with the Corps of Engineers on habitat
    work.
        On the Puyallup River in Pierce County, for example, the
    Corps shared the assistance with levee setbacks and property
    purchases that allows us to restore hundreds of acres of
    floodplain habitat. Our neighbors to the north, King and
    Snohomish Counties have cosponsored several successful habitat
    projects and two major studies with the Corps. We have found
    the Corps to be a capable and an enthusiastic partner.
        We would like to expand this successful model to the 12
    counties in the Puget Sound as a whole. The authorization we
    are seeking would allow the Corps technical and financial help
    to be available to local governments and the Indian tribes
    throughout our basin.
        Focusing on Puget Sound as a whole will allow us to target
    funding for the most effective habitat projects. Using the base
    to my prospective and the restoration plans that are in the
    development of the 17 watersheds around the Sound, we intend to
    focus Federal and local funding on a highly effective and
    efficient strategy to rebuild salmon habitat.
        Thanks to the Washington Congressional delegation, and
    particularly Senators Gorton, Murray, and Representatives
    Inslee, Dicks, and Metcalf, legislation has been introduced in
    both houses of Congress to authorize new Corps habitat
    restoration program for Puget Sound. There are several key
    points in the Congressional bill that I would like to recommend
    be included in the Water Resources Development Act, and with
    your concurrence, Mr. Chair, let me quickly run through those.
        First, I respectfully request that the committee authorize
    the program at the $125 million level proposed by the
    Congressional bills. The Puget Sound basin is larger than the
    State of Maryland, and would require habitat restoration work
    in every one of its 17 major watersheds. Authorization at $125
    million will provide the funds needed to realize the full
    potential of the Federal and local partnership.
        Second, I strongly endorse involving State, local, and
    tribal interests in addition to the Federal fisheries agencies
    in selecting projects to be implemented under this authority.
    This will ensure that projects fulfill the local needs and
    complement other salmon recovery initiatives.
        Third, I request that the program have cost-sharing terms
    and encourage full participation by local government and tribal
    sponsors. Specifically, I strongly support a partial waiver of
    cost-sharing requirements for terminal sponsors and a 75/25
    formula--75 Federal and 25 local--for projects in the areas
    with prior Corps flood protection or navigation projects.
        Senators thank you so much for your consideration of this
    valuable program. We are committed to moving ahead to bring
    salmon back into the Puget Sound, and we look forward to a
    strong partnership, a continued partnership with the Federal
    Government through this initiative.
        Thank you so very much.
        Senator Voinovich. Thank you.
        [The prepared statement of Mr. Sutherland follows:]
        Senator Voinovich. We are now going to hear from Lillian
    Borrone, who is the director of Port Commerce.
        Ms. Borrone?

     STATEMENT OF LILLIAN BORRONE, DIRECTOR OF PORT COMMERCE, PORT
                       OF NEW YORK AND NEW JERSEY

        Ms. Borrone. Thank you, Senator and members of the
    committee. I appreciate the opportunity to testify on behalf of
    the Federal navigation project and related matters of
    importance to the New York/New Jersey region and to the Nation.
        As I begin, I'd like to take a moment to recognize the
    invaluable work and untiring efforts of retiring Senators Frank
    Lautenberg and Daniel Patrick Moynihan. On behalf of the Port
    of New York and New Jersey and the citizens of our States, we
    will miss them. Their leadership has been tremendous and they
    will be sorely missed for reasons that go well beyond our port.
        Historically, the Port of New York and New Jersey has been
    the gateway for much of the Nation's imports and exports.
    Today, the Port of New York and New Jersey is the third-largest
    U.S. port and the busiest Atlantic gateway. We have the largest
    petroleum products and automobile trades in the country, and
    last year our container volume was 2.5 million 20-foot
    equivalent units, a growth of just over 67 percent in 4 years,
    and the cargo volumes at our port, like the rest of the Nation,
    are predicted to continue to grow. Trade growth nationwide is
    projected at 4 percent a year in the years ahead, and we have
    taken a conservative estimate of 3.7 percent for growth in our
    harbor. That means a doubling of cargo volume in our harbor
    during this decade.
        That realization in 1998 prompted us to undertake a major
    review of the impacts of that kind of growth to determine what
    new investments would be required in our marine terminal, our
    roadway, our railway, and our waterway infrastructure to meet
    that kind of future demand. The results of that review are
    contained in an investment options plan that identifies up to
    $7 billion in local investments to modernize and expand the
    major components of our port's infrastructure, including
    channels.
        Coupled with projections for strong growth in international
    trade area changing trends in the maritime industry. As Senator
    Lautenberg depicted in his earlier slide, in the summer of 1998
    the ``Regina Emeris'' called New York Harbor, making her first
    U.S. stop on her inaugural east coast tour. While the ``Regina
    Emeris'' has been the first of the large vessels to call at our
    harbor, she is not the only one we will see. In fact, as of the
    first quarter of this year, there are 101 deep draft or post-
    Panamax vessels container ships sailing in the world's trade,
    carrying 14 percent of cargo traded throughout the world. In
    addition, another 130 vessels are on order. That will more than
    double the number of these giant vessels serving trade around
    the world.
        It is now clear that this is no longer a prediction; it is
    a trend. These larger vessels and their trade lanes are not the
    extraordinary occurrence for specialized cargo that was the
    view of the WRDA 1986 debate, but rather it is a fact. It is an
    industry standard, much as the corresponding channel depth will
    be the standard.
        The trend in the maritime industry is no different from
    technological developments in other transportation modes. In
    fact, we view this as the ocean equivalent of the wide-body jet
    or tandem trucks and double-stacked train units, all of which
    are now very familiar sites around the world.
        Given the long time that it takes to carry out--actually,
    to plan and then carry out major infrastructure investments,
    and the certain knowledge of the pressures that trade and
    technology will bring to our gateways, we don't believe the
    country can afford to put off project authorization and funding
    decisions until commerce is choking the channels of U.S. ports
    with modern ships that require modern depths.
        In recognition of this direction in ocean shipping and our
    inability to fully accommodate these new vessels in New York
    Harbor, our Congressional delegation, including Senators
    Lautenberg and Moynihan, helped authorize a Corps feasibility
    study, the New York/New Jersey Harbor Navigation Study, which
    was completed at the end of last year, and the chief's report
    on that project was signed earlier this month.
        In short, that report recommends the deepening to 50 feet
    of the major channels that lead to the major container
    terminals in the port.
        I have included in my formal testimony a map that shows the
    various channels included in the project recommendation.
        What's the value of this project to the Nation and why
    should the Nation invest in New York Harbor? Well, the Corps
    study found that the project would realize an annual benefit
    totaling $238.5 million in national transportation cost
    resulting from the larger vessels being able to call on the
    Port of New York and New Jersey directly rather than diverting
    to another port, only to have goods bound for the New York/New
    Jersey region trucked or railed back into the bi-State area.
        That scenario has national consequences in terms of wear
    and tear on the Nation's road and rail network, air quality,
    highway congestion, freight delivery time, and overall quality
    of life.
        As you know, a ship the size of the ``Regina'' carrying
    6,000 containers, a volume of that size would require 6,000
    trucks or 1,500 to 3,000 rail cars, depending on how many we
    accommodate on each of those cars.
        So, in our view, providing direct all-water service to the
    region is both a more economical as well as an environmentally
    preferred method of serving our market, but the national
    interest goes beyond those numbers, significant as they are.
    The Port of New York and New Jersey is in the heart of the
    Nation's largest and most affluent consumer market. There are
    18 million consumers that live and work in our immediate
    metropolitan region, and we reach over 80 million consumers
    within 1 day's truck drive from our docks, a ten-state region
    that stretches from Maine to Maryland, from Cape Cod to the
    Ohio River. Add to this broad market base the fact that the
    rail freight system allows our port to directly serve the
    southeast and midwest and beyond, including into eastern
    Canada.
        Most consumers of the inland coastal states probably don't
    think about seaports contributing greatly to their quality of
    life, but we at the Port of New York and New Jersey are not
    just a regional port.
        So, given the Nation's growing involvement in world trade
    activities, we believe that the Nation has a significant
    interest in maximizing the port's potential to serve the
    national consumer demand.
        Now, Mr. Chairman, ports among the east coast compete. We
    think that is healthy competition. But we compete because we
    are all willing to make investigations, both in our
    infrastructure as well as in our partnership with the private
    sector and with labor, who service us. We believe that that
    competition is healthy, but we also are prepared in the Port of
    New York and New Jersey to commit the approximately $1 billion
    for the non-Federal share of the channel project that we are
    seeking in the water resource legislation of 2000, in addition
    to the $5 to $6 billion that we, in conjunction with our
    private sector partners will invest in upland infrastructure.
        Mr. Chairman, I would like to submit more formal remarks
    for the record, and I would be happy to answer any questions
    the committee may have today.
        Thank you.
        Senator Voinovich. Thank you very much. Your remarks will
    be inserted in the record.
        Ms. Borrone. Thank you.
        [The prepared statement of Ms. Borrone follows:]
        Senator Voinovich. Now I'd like to welcome Barry Palmer,
    who is the director of the Association for the Development of
    Inland Navigation in America's Ohio Valley.
        Mr. Palmer, I would like to congratulate you and your
    membership for your willingness to take on your responsibility
    in paying $0.20 per gallon of diesel fuel so that you can see
    that the locks and dams on the Ohio River are in appropriate
    condition. Certainly, that is a core role of the Corps of
    Engineers and has been, and I apologize to you for the fact
    that the Federal Government hasn't kept up their part of the
    bargain with you and that we are 6 or 7 years behind what needs
    to be done in this area.
        I appreciate your being here and look forward to your
    testimony.

         STATEMENT OF BARRY PALMER, EXECUTIVE DIRECTOR, DINAMO

        Mr. Palmer. Thank you very much, sir. We've never had that
    kind of response from someone in your position before. We did
    agree to accept the additional $0.10 per gallon diesel fuel
    tax, making $0.20 per gallon. The moneys go into the trust fund
    to finance, pay for half the cost of these lock and dam
    modernization projects.
        Dinamo was organized 19 years ago with private sector
    leadership, State government leadership. Former Governor Rhodes
    was one of the charter members of getting Dinamo started and
    labor interest for the purpose of working with the Corps of
    Engineers to expedite the modernization of the lock and dam
    infrastructure on the Ohio River and its tributaries. You see a
    map of the region. In the last 19 years, 15 locks and dams,
    which represented an investment of nearly $5 billion, have been
    authorized by the Congress, the leadership support of this
    committee, and all 15 locks and dams are under construction or
    complete.
        You talked about the delays in scheduling. Yes, some of the
    projects have been delayed in their completion date by as much
    as 6 years. Particularly, there is a picture of the Olmsted
    locks and dams down at the end of the Ohio River before it goes
    into the Mississippi. This is a $1 billion project. That's a
    December photo. The locks are complete at this site. That
    project, from the beginning, when I got started on it, until
    when it is expected to be completed may be 27, 30 years. It
    needs massive amounts of money to get this project completed in
    an orderly way. And there are five other lock and dam projects
    that are not receiving as much funds as we think are necessary
    to get the job done.
        There are 275 million tons of commodities moving on the
    Ohio River navigation system that represents a value of $32.8
    billion. There are 1,000 manufacturing firms, power plants,
    terminals, and docks on the Ohio River navigation system, and
    it represents probably 650,000 jobs that are directly and
    indirectly affected by that waterborne commerce.
        We are here today--I wanted to say of the Olmsted project,
    for example, you talked about delays in this. The Corps did a
    study recently, and it was submitted to the Inland Waterway
    User Board. More than $1.34 billion in transportation savings
    have already been washed down the Ohio River because of
    construction schedule slippage. An additional $534 million is
    on the table. Those are potential future benefits. Those
    savings could be realized if we could get these projects funded
    on an orderly, efficient schedule.
        Now, we have been studying a lot of these projects under
    what is called an ``Ohio River Mainstem Study'' initiated 5 or
    6 years ago, which was intended to be an authorization document
    for short-term needs, as well as a long-range view of projects,
    and the preliminary findings are that there are eight more lock
    and dam projects that will need to be authorized in the next
    decade.
        The ones we are here to talk about today are Greenup and
    Myers. What you see in the yellow and what you see in the red
    are, in fact, costs that are born by the private sector as they
    operate on the system and go through those specific locks and
    dams, and the red particularly are closure costs that are
    reflected in future years over the 50-year economic design life
    of these projects. These are the two most important and two of
    the busiest locks on the Ohio River main stem.
        John T. Myers Lock and Dam is one of these projects that is
    located on the Indiana/Kentucky border near Uniontown--Mount
    Vernon, Indiana and Uniontown, Kentucky. The other is Greenup,
    which is on the Ohio/Kentucky border.
        Now, Myers was shut, for example, closed down for major
    maintenance back in 1989 for 45 days, and the additional cost
    to tow boat operators and shippers because of the closure of
    that lock was $15 million. So when you look at these closure
    costs out into the future, they are significant.
        Now, what we are asking this committee and urging them to
    consider and to act on, in fact, is to provide construction
    authorization for what are six-foot extensions to the auxiliary
    chambers at both the Greenup and Myer facilities. They probably
    require a contingent authorization. The division engineer is
    going to release his report tomorrow. They don't want me to
    tell you that. They want to tell you that first, but you will
    get it some time this week. And the final report of the chief
    should be available certainly before the end of the calendar
    year.
        We are looking at--the reasons for asking for tangentient
    authorization are two reasons. One, it takes a long time to get
    these projects under construction and built, but we would like
    to see this project, these two locks and dams and these
    extensions, completed by 2008. We have a window of opportunity.
    If we can build extensions on the auxiliary chambers so that we
    have twin 1,200-foot locks, we can avoid having to build a
    third lock at some point in the future, so this is a more cost-
    effective way of doing business.
        You can see the engineer's notice. Come this month, the
    first cost at J.T. Myers is $182 million. At Greenup, it is
    $176 million. They both have very favorable benefit/cost
    relationships. What we want to do is we've got about 75 million
    tons of commodities going through Myers, for example, so we
    want to get these projects on track before the traffic
    overwhelms us, and then use the auxiliary lock as well as the
    main lock, and then forcing the Corps to build a third lock.
    That would be cost prohibitive.
        There is money for these projects, as you can see, in this
    year's budget, so there is support for this stuff, and what we
    are trying to do is to get down the river to, like we had with
    the Robert C. Bird Locks and Dams, one of our early champions
    along with Senator Heinz and Senator Ford, helped get this
    thing started.
        This is the old Gallipolis Lock and Dam down near
    Gallipolis, Ohio, and now Robert C. Bird Locks and Dams, and
    that's the way we like to see them all--completed and
    operational, fully operational.
        Thank you for the opportunity to be here this morning and
    to present our ideas about support for this project.
        Senator Voinovich. Thank you very much.
        [The prepared statement of Mr. Palmer follows:]
        Senator Voinovich. Mayor Dannel Malloy, the city of
    Stamford.

     STATEMENT OF HON. DANNEL P. MALLOY, MAYOR, CITY OF STAMFORD,
                              CONNECTICUT

        Mayor Malloy. Good morning, Chairman Voinovich and members
    of the subcommittee. I am Dannel Malloy, the mayor of Stamford,
    Connecticut, and I am pleased to testify today on behalf of the
    National Association of Local Government Environmental
    Professionals about the critical role the Army Corps of
    Engineers has in revitalizing America's brownfields.
        Today, I will describe why the Corps of Engineers mission
    in brownfields is so important to local communities. Second, I
    will describe the need for the Corps' brownfield assistance in
    the efforts of places like Stamford and several other
    communities across America. Third, I wish to commend both the
    Administration and Senator Chafee for proposing to enhance the
    Corps' in brownfields revitalization.
        By way of background, NALGEP represents local government
    officials responsible for making local environmental policy and
    ensuring environmental compliance. NALGEP's membership consists
    of more than 130 local governments throughout the United
    States, including many communities in the States represented by
    the membership of this committee.
        The city of Stamford has a diverse population of 110,000
    people and is located on Long Island Sound just 35 miles from
    New York City. While Stamford is an old industrial city,
    settled in 1641, most of the historic manufacturing companies
    have left Stamford, leaving behind their contaminated
    industrial sites, or brownfields.
        Stamford has launched two major revitalization initiatives
    along our waterways, both with the assistance of the Corps of
    Engineers. Along Stamford's harborfront in the south end of the
    city, we are cleaning up long-abandoned brownfields and
    creating new manufacturing, housing, and recreational areas.
    The Corps' help is necessary to deal with further environmental
    assessments, ecosystem restoration, harbor dredging, and other
    activities which the Corps is well situated for.
        Stamford has also launched a major initiative to revitalize
    the Mill River corridor in a vital mixed-use district
    surrounding a new linear park along the river which runs
    through the center of the city. The Mill River initiative is a
    centerpiece of Stamford's plans to create a vibrant urban
    center with a high quality of life where citizens will want to
    live, work, and play. At Mill River, Stamford needs assistance
    in hydraulics study in order to remedy recurring siltation
    problems, improve water flow, and reconfigure the flood storage
    area. The Corps could also play a valuable role in dredging,
    identifying, and cleaning any environmental contamination and
    helping to restore the aquatic ecosystem.
        My written testimony provides other examples of how the
    Corps of Engineers is successfully partnering with local
    communities to clean up and revitalize waterfront brownfields.
    Specifically mentioned are projects in Ohio, New York, Rhode
    Island, Missouri, Kansas, Iowa, and California. In fact, we
    understand that the Corps of Engineers is assisting more than
    50 local governments to deal with environmental contamination
    in the projects along their waterways, and there are a great
    number of other communities that still need this help. These
    local examples show how valuable the Corps of Engineers can be
    in community brownfields revitalization.
        I want to stress three reasons that the Corps' brownfields
    mission is so important. First, there is a great local need for
    brownfields assistance along our waterways. There are as many
    as 500,000 brownfields that are draining older localities of
    vitality, threatening the public health and environment, and
    thwarting the expansion of local economies, jobs, and tax base.
    The need for brownfields resource is real and it is large.
        Waterway brownfield redevelopment also poses a unique set
    of challenges for communities. The difficult issues of water
    quality improvement, ecosystem protection, and restoration,
    flooding and runoff, toxic contamination, and hydraulic
    engineering make the Corps' expertise in cleanup along the
    Nation's waterways particularly important.
        Second, brownfields revitalization along waterways is
    consistent with the Corps' existing environmental mission,
    activities, and competencies. As I have testified, the Corps
    has creatively used its existing authorities to support as many
    as 50 local brownfields projects. This successful track record
    makes further Corps efforts and a clear legal authority for
    them appropriate and valuable.
        Third, the investment of the Corps' resources in
    brownfields will yield a high return for American local
    communities, its citizens, and the environment. Removing the
    barrier of contamination from our waterfront brownfields can
    help create jobs, leverage private sector resources, expand the
    tax base, reverse urban deterioration, protect health and
    public safety, slow the sprawling of metropolitan regions, and
    keep our communities livable.
        In conclusion, local communities urge this Congress to
    support a brownfields mission for the Corps of Engineers.
    NALGEP commends the Administration and Senator Lincoln Chafee
    for their leadership in proposing legislation that would
    establish this important environmental mission for the Corps.
        Riverfronts, harborfronts, and lakefronts, and many local
    communities hold the legacy of our industrial heritage, and the
    contamination left behind by these activities is there and need
    to be dealt with.
        The revitalization of our waterways with commercial,
    residential, and greenspace development represents the key to
    the future revitalization of these American communities.
    Congress should make the Corps part of the team of local,
    State, and private sector leaders who are revitalizing our
    Nation's waterfront brownfields.
        Thank you.
        Senator Voinovich. Thank you very much.
        [The prepared statement of Mayor Malloy follows:]
        Senator Voinovich. Mr. Marlowe is president of the American
    Coastal Coalition, on beach projects.
        Mr. Marlowe?

       STATEMENT OF HOWARD MARLOWE, PRESIDENT, AMERICAN COASTAL
                               COALITION

        Mr. Marlowe. Thank you very much, Mr. Chairman. I
    appreciate the invitation to testify extended by you and
    Senator Baucus.
        The American Coastal Coalition is a nationwide advocacy
    organization for coastal communities whose sole mission is to
    achieve policies that will promote the economic and
    environmental interest of those communities. Since our
    establishment in 1996, our major focus has been on Federal
    policies that affect beach restoration.
        As you know, the Administration in 1995 announced that it
    would support no new shore protection starts. This committee,
    in WRDA 1996, adopted section 227, which we refer to as the
    ``National Shore Protection Act,'' and Senator Lautenberg was
    the chief sponsor of the National Shore Protection Act as a
    stand-alone piece of legislation, and, when incorporated into
    WRDA, it simply required the Administration to recommend shore
    protection projects for authorization and for funding.
        To this day, the Corps has not implemented section 227
    because of strong opposition from the White House Office of
    Management and Budget.
        In the last couple of years, Members of Congress and
    private interest groups spent a good deal of time negotiating
    with OMB, trying to reverse the Administration's position. The
    result of those talks was the adoption in WRDA 1999 of a major
    change in cost-sharing, which increased the share of cost born
    by non-Federal sponsors in short protection projects.
        At the time the Senate Environment and Public Works
    Committee was considering that change, Dr. Westphal testified
    before you and responded to your questions that the cost-
    sharing formula considered by the committee would result in a
    change in the Administration's no new shore protection
    projects. Apparently, he was not speaking for the
    Administration.
        The Administration's shore protection policy, if it can be
    called that, is bad policy. It is bad for the national economy.
    It is bad for the national environment. Furthermore, we think
    OMB's dealing with Congress on this subject have been
    characterized by bad faith.
        I want to emphasize a couple of points in our prepared
    testimony. Beaches are a major component of our national
    economic and environmental infrastructure. Their impact will be
    quantified and highlighted when the national shoreline study
    authorized by WRDA 1999 is completed. The study will provide
    not only the first physical catalog in 30 years of the beaches
    of the United States that are eroding, but it will also show
    the economic and environmental costs of erosion to the Nation.
        Obviously, American Coastal Coalition fully supports the
    funding of the shoreline study; however, we regret that the
    Administration apparently is using the fact that the study has
    yet to be undertaken and completed as an excuse not to
    recommend reauthorization or funding of any new beach
    restoration projects. It is especially hard to take this excuse
    with any degree of seriousness, given the fact that the
    Administration has recommended a paltry $300,000 appropriation
    for this study. We are delighted by the fact that Senator
    Lautenberg and other Members of Congress have requested very
    adequate funding for this project.
        Since it is likely that Congress will provide some level of
    funding, we do hope that this committee will urge the Army
    Corps of Engineers to begin working with other agencies now to
    develop a study scope and methodology that will produce useful
    and credible information for Congress and the public.
        I want to focus on something very briefly that has been
    raised by other witnesses and by members of the committee,
    section 16, the automatic deauthorization provision.
        In theory, it ought to be able to be possible to get from
    authorization to construction within 7 years. The fact of the
    matter is that most of the beach nourishment projects that are
    up for actual construction funds in fiscal year 2001 or likely
    to be up for fiscal year 2002 were actually authorized in the
    1980's. Many beach nourishment projects authorized in the WRDA
    bills of 1992 and 1996 are not likely to get construction funds
    until fiscal year 2003 or later.
        Corps procedures and the Administration's refusal to budget
    for nourishment projects have been significant factors in
    slowing them down in terms of getting under construction.
        Every authorized Federal beach nourishment project has an
    economic life up to 50 years. Over that life, the authorization
    provides for periodic renourishment. Well, those that perform
    well, the period between initial construction and their first,
    second, or subsequent periodic renourishment is going to be
    longer. It may, indeed, be longer than 5 years.
        Now, that good performance will be rewarded with an
    automatic deauthorization under section 16 of the
    Administration's proposal. That's one single approval that we
    don't need from the Feds. Obviously, we hope that you will
    strike section 16, or not include that provision in your
    committee bill.
        In our prepared testimony, we have discussed several WRDA
    2000 policy changes that we recommend. There is one, again, I
    would like to highlight, and it is appropriate, given the fact
    we've had other discussion on the word ``recreation.''
        Recreation is not a four-letter word and, in the case of
    shore protection, it is not an extension of the Corps' mandate.
    The fact of the matter is, it is an integral part of the Corps
    protection mandate.
        Basically, in a very summary fashion, we would like to have
    the legislation enacted. We proposed in our testimony
    legislative language which would require that the Corps
    consider recreational benefits equally with storm damage
    reduction and environmental restoration benefits to determine
    the benefit/cost ratio of shore protection projects.
        Finally, our testimony has listed several shore protection
    projects, studies, or construction authorizations. We hope that
    you will include these within WRDA 2000.
        Thank you very much for the opportunity to testify. We look
    forward to any questions that you may have.
        Senator Voinovich. Thank you very much.
        [The prepared statement of Mr. Marlowe follows:]
        Senator Voinovich. I've asked Senator Chafee to take over
    presiding this hearing for a few minutes. I will be back.
        Senator Lautenberg. Thanks very much, Mr. Chairman. I'll
    try to be brief, which is unusual. I hope that the witnesses'
    response, which is unusual, will also be brief.
        I'll start with Ms. Borrone.
        I thank all of you for your testimony. It is a very
    appealing litany, if I may call it that way, to actually get
    involved to do the things that we have to to help our
    communities move along, to get the ground cleaned up, get the
    water cleaned up in places where it can make a huge difference.
    The crowding of our country is forcing us to seek ever-more
    land use opportunities in a sensible, environmentally sound
    way.
        Ms. Borrone, we're looking at trying to deepen our
    channels, and, very frankly, it was something that Mr. Marlowe
    said about beach replenishment--you know, all of these projects
    are fundamentally designed to try and help the economies of
    those communities, and we don't stand by when there is a flood
    or a natural disaster, earthquake, volcano, what have you. We
    don't stand by and say, ``OK, that's a local thing.'' And
    therefore we can't stand by, in my view, and say to those ports
    that are naturally deeper, ``OK, you come take the business
    because the standards for building ships have changed
    substantially and they're deeper and harder to get ships in.''
    So, as a consequence, I think, just as we talked to Mr. Palmer
    about what you're trying to do in the Ohio Valley there, the
    same thing, beach replenishment to me is akin to helping
    farmers in the moment of disaster.
        If our economy is built around the use of beaches and clean
    water, clean ocean water, then we have to appeal to our Federal
    Government to give us a hand there to try to adjust things so
    that we can all share in the business.
        So when we look at, Ms. Borrone, at the New York Harbor--
    and I'm glad to see that Mayor Malloy's colleague in activities
    has joined us.
        Senator Lieberman. I was close. Thank you.
        Senator Lautenberg. Well, I know how devoted you are,
    Senator Lieberman, to making sure that every resource in this
    committee goes to Connecticut.
        [Laughter.]
        Senator Lieberman. Whatever is left over after New Jersey.
        Senator Lautenberg. The fact is that we have had--we're
    looking now at depths of 55 feet because newer ships have been
    build more efficient. Is this a cycle that is going to
    continue? Are we going to be looking at 60-, 65-foot vessels? I
    see some of the passenger vessels that they are building are so
    enormous, they're five, six stories high. Is that what we are
    in for in the future, because it makes a difference in how we
    do our planning.
        Ms. Borrone. It certainly does, Senator. Well, as we
    undertook this analysis, with the help and commitment of the
    Army Corps of Engineers, we asked that question. I think our
    answer is, barring some dramatic change in technology, that it
    is not going to continue to look to deeper and deeper channels.
    What we are saying is that we are going to perhaps have the
    opportunity to max out with existing depths and existing beams
    on vessels well before we have to start looking at new
    capability and ship design.
        We believe, based on what the industry designers are
    telling us--naval architects and marine engineers--that we
    could see ships with current depth requirements and beams that
    would handle 14,000 or 15,000 containers on a vessel. The
    technology problem is going to be the engine capability and the
    cost of operating those vessels.
        If we start seeing broadening beams, we are going to have
    problems not just in New York Harbor but in many other harbors,
    because we haven't designed our channels to handle two vessels
    of very large beams passing each other. And it's not just this
    country, it's other countries, as well.
        So what we think and the way we looked at this analysis,
    the channel depths that we are talking about, that 50 foot,
    which, as you say, is really more than 50 feet to assure safe
    overdraft and to assure that we--because we will be blasting
    into rock, have the appropriate rock capability in place--we're
    talking about approximately 54 feet. We should be able to
    handle the ships that want to call our harbor.
        Also, remember that the largest, the behemoth vessels, are
    only going to be on certain trade lines because of the volume
    of cargo flowing between Asia and the U.S. or between Asia and
    other countries.
        So we don't think it is an ever-increasing cycle of deeper
    and deeper drafts.
        Senator Lautenberg. Because at some point I think we have
    to say, ``Well, how much can we afford to do, and what is the
    reasonable navigation opportunity there?'' You know, some of
    these are fairly narrow channels, and if you keep extending the
    draft then there is a tendency to increase the length, there is
    a tendency to increase the beam. Before you know it, you'd have
    to put wheels on this thing and drive it over land.
        Then the next question that arises is the share of sharing,
    the relationship between Federal funding and non-Federal
    funding, and the current cost-sharing relationship for channel-
    deepening projects, the nexus at 45 feet is 50/50.
        Now, in your testimony you say that the Port Authority or
    local support, regional support, is willing to go to $1
    billion, if I read correctly. The forecast is for
    $1,800,000,000. What is the position of the Port Authority on
    accommodating these newer ship standards and modifying the cost
    share to allow for 65/35 for projects up to 55 feet?
        On one hand, I hear what I think is a serious offer to take
    even more than half locally. On the other hand, it is being
    suggested that maybe the Federal Government ought to step up to
    65 percent.
        Ms. Borrone. Well, Senator, the current Federal share is
    really 60/40, meaning 60 percent on the local and 40 percent on
    the Federal level, because the 50/50 we start with, but we also
    have another 10 percent responsibility at the end of the
    project where we reimburse the Federal Government that
    additional amount. So the Government's position in current law
    is that we step up and spend 60 percent of our funds.
        That's what I said we are prepared to do because it is so
    urgent that we get this program moving. But we do, as the Port
    Authority, strongly support the cost-sharing policy change
    which is under consideration, we hope, by this committee,
    because we do believe, as I said in my testimony, that the
    depth we are talking about will be standard depth, which was
    the circumstance when we were dealing with 45 feet as an
    industry standard a decade-and-a-half ago.
        So we would hope that the committee would seriously
    consider the opportunity to adjust the cost-sharing formula in
    this legislative round.
        Senator Lautenberg. To 60----
        Ms. Borrone. To 65/35.
        Senator Lautenberg. To 65/35?
        Ms. Borrone. Right.
        Senator Lautenberg. So 65 percent----
        Ms. Borrone. Federal.
        Senator Lautenberg [continuing]. Being from----
        Ms. Borrone. The Federal Government.
        Senator Lautenberg. Federal Government. I just wanted to be
    sure, because let there not be any confusion that we want to
    make it easier for the Federal Government.
        I thank you.
        Ms. Borrone. Thank you, sir.
        Senator Lautenberg. I thank the Senator from Rhode Island
    for his interest, I must say, to carry on in the Chafee
    tradition, legacy of interest in such matters as the very good,
    positive contribution to the things that we are doing. We're
    glad to see you.
        Senator Chafee [assuming Chair]. Thank you very much.
        Senator Lieberman?

            OPENING STATEMENT OF HON. JOSEPH I. LIEBERMAN,
               U.S. SENATOR FROM THE STATE OF CONNECTICUT

        Senator Lieberman. Thanks, Senator Chafee, and thanks to
    everyone on the panel.
        I'd offer a special welcome to my home town mayor. I left,
    but I didn't go far, and my mother is still there, and she is a
    fervent supporter of Mayor Malloy.
        I regret that I was at an Armed Services Committee meeting
    that kept me from being here.
        I don't want to delay the hearing. I have a statement that
    I would ask, Mr. Chairman, be entered into the record.
        Senator Chafee. Without objection.
        [The prepared statement of Senator Lieberman follows:]
        Senator Lieberman. I took a look at Mayor Malloy's
    testimony and I have been informed by my staff that he
    testified well to it.
        We have had experience in Stamford now with the very
    constructive and unique role, a great advantage, sort of value-
    added over what might have come from a private engineering
    firm. First, the city 2 or 3 years ago was designated as one of
    the lead cities in brownfields initiative. I think 16 were
    chosen around the country. But then there are two major
    projects that I know, because of all the time I go to Stamford
    to visit my mother. You understand this.
        Mayor Malloy. I do.
        Senator Lieberman. Yes. And I know, from talking and
    working on it with Mayor Malloy, the critical role the Corps is
    playing in both of those projects.
        I'm sure he said it better than I could. I want to just
    welcome him, thank him for taking the time to come down and
    testify and thank him for his leadership of a city that is
    really doing very well now.
        Mayor Malloy. Thank you, Senator. I just want to thank you
    for being here. If I had known you were going to be here, I
    would have spoken slower.
        [Laughter.]
        Senator Lieberman. Thank you.
        Thanks, The Chairman.
        Senator Chafee. I don't have any questions. The only
    comment I would make is that these are worthy projects, from
    the days when you could walk across the backs of salmon to
    seeing very few in a whole day along the river--80 million
    people, according to your testimony, are served within 100
    miles of the port.
        One interesting fact--New Jersey is more densely populated
    than India.
        Senator Lieberman. Really?
        Senator Chafee. Look it up.
        Senator Lieberman. I'm going to do that.
        I'll give you the other side of this. I was at a meeting
    with Senator Burns of Montana, and he was talking about how
    little populated Montana is, and he said, in true Brensian
    fashion, ``In Montana, there's a lot of dirt between light
    bulbs.''
        [Laughter.]
        Senator Lieberman. It only makes sense that we provide all
    those people with adequate transportation for their goods. Of
    course, the Ohio River and all the produce that travels on that
    waterway, and the good work that is being done at Stamford,
    what an opportunity to realize a city's potential, a city that
    has seen the faces of history come and go and now great
    potential.
        And the beaches--my only comment on that would be the power
    of the ocean just can't be under-estimated. I know in Rhode
    Island we restore some beaches, and just the power of the ocean
    can undo so quickly what the Corps or anybody else can do, so I
    do have some reservations on putting money into beach
    restoration.
        Mr. Marlowe. I'd be happy to talk with you about that one,
    Senator.
        Senator Chafee. Thank you very much.
        In the absence of Senator Voinovich, I conclude the
    hearing. Thank you.
        [Whereupon, at 12:07 p.m., the subcommittee was adjourned,
    to reconvene at the call of the Chair.]
    Statement of Hon. Daniel Patrick Moynihan, U.S. Senator from the State
                                  of New York
        Mr. Chairman, I appreciate your holding this hearing to discuss the
    Administration's proposal for the Water Resources Development Act of
    2000. I am particularly interested in discussing the New York/New
    Jersey Harbor Navigation Study, which was completed and signed by
    Lieutenant General Joseph N. Ballard on May 2, 2000. I am pleased that
    the project has been included in today's hearing and particularly look
    forward to receiving the testimony of Lillian Barrone, Director of Port
    Commerce for the Port Authority of New York and New Jersey.
        The Chief's Report for the New York/New Jersey Harbor Navigation
    Study recommends deepening the entrance channel to 53 feet, and all
    other major channels in the Port to a depth of 50 feet. This report
    represents 3 years of comprehensive study, authorized in WRDA 96, on
    the navigation needs of the Port of New York and New Jersey. I support
    the report in its entirety.
        In 1791, Alexander Hamilton wrote of the efficiencies to be gained
    by the involvement of the Federal Government in the development of
    waterways for commerce in his ``Report on Manufactures.'' Throughout
    the 1800's, support for Federal involvement in navigation and commerce
    solidified. In 1899, Congress passed the River and Harbor Act, giving
    regulatory authority to the Army Corps of Engineers for any
    construction within navigable waters of the United States. Mr.
    Chairman, the New York/ New Jersey Harbor project represents the
    essence of this mission.
        The Port of New York and New Jersey is the third largest port in
    North America and the top export port in the country. It is a vital
    economic engine. As trade continues to expand, we must be prepared to
    make serious investments in our nation's infrastructure to ensure our
    ability to be competitive internationally. Authorization of the New
    York/ New Jersey Harbor project in its entirety is paramount to the
    continued economic vitality of the Port, the states of New York and New
    Jersey, the entire northeast region, and indeed, the nation. I look
    forward to working with my colleagues in developing the Water Resources
    Development Act of 2000.
                                   __________
     Statement of Dr. Joseph W. Westphal, Assistant Secretary of the Army
                     (Civil Works), Department of the Army
    Introduction
        Mr. Chairman and Members of the Subcommittee, I am Joseph Westphal,
    Assistant Secretary of the Army for Civil Works. Accompanying me today
    is Mr. Michael Davis, the Army's Deputy Assistant Secretary for Policy
    and Legislation, and MG Hans A. Van Winkle, the Army Corps of
    Engineers' Deputy Commander for Civil Works. It is an honor to be here
    today, and to provide you with information on the Army's proposal for a
    Water Resources Development Act (WRDA) of 2000. We appreciate the
    opportunity to work with your Subcommittee and the Congress on this
    important legislative initiative.
        For over two centuries, the U.S. Army Corps of Engineers has been a
    great asset to our Nation. Since its founding in 1775, the Corps of
    Engineers has provided engineering support to the military, developed
    our nation's water resources, and restored and protected our
    environment. The Corps has improved the quality of our life by
    contributing to making America more prosperous, safe, and secure. As we
    begin the new century, the Corps must be flexible and evolve if it is
    to continue to make important contributions to the Nation and respond
    to today's problems. We envision that the Corps will continue in its
    longstanding and exemplary role as a great problem solver for the
    Nation.
        Historically, the Nation's rich and abundant water and related land
    resources provided the foundation for our successful development and
    rapid achievement of preeminence within the international community.
    Our Nation's waters and waterways have been focal points for economic
    and social development, and the Army's Civil Works program has made
    significant contributions to this development.
        Under this Administration, there has been intense interest in
    finding sustainable ways to strengthen our Nation's economy while
    protecting and restoring our unique water and related land resources
    for the benefit of future generations. I believe the Army's Civil Works
    program has a significant role to play in meeting these objectives.
    There is no question that our natural resources have been affected,
    often in unintended ways, by our country's tremendous growth,
    unparalleled prosperity, and urban and rural development. Pursuant to
    the Water Resources Development Act of 1986, the Army Civil Works
    program began to change in response to the many new water resources
    challenges facing this Nation. The programs and policies that I will
    talk about today are designed to enable the Army Corps Civil Works
    program to continue the tradition of contributing to our economic
    growth, our National security, and the restoration and protection of
    our Nation's environment.
    Importance of Water Resources Development
        The Administration's Army Civil Works program reflects its
    commitment to justified and environmentally acceptable water resources
    development. Our program provides a sound investment in our Nation's
    security, economic future, and environmental stability. Communities
    across the country rely on water resources projects to reduce flood
    damages, compete more efficiently in world trade, provide needed water
    and power, and protect and restore our rich environmental resources.
        As you are well aware, there are many pressing needs for water
    resources development in this country. We must work together to define
    an appropriate Federal role in addressing these problems in the full
    light of our fiscal capabilities and constraints, and economic and
    environmental requirements. I suggest that we utilize the following
    principles as we formulate a Water Resources Development Act for 2000:
          Technically Sound Projects. Water resources investment
    decisions must be made based on the best technical and policy
    evaluations that consider all economic and environmental consequences.
    In light of constrained Federal dollars we must ensure, before a
    project is authorized for construction, that it has completed a sound
    planning process, has passed a full Agency and Administration review,
    and is fully in accord with the Federal laws and policies established
    to protect the environment.
          Central Importance of Cost Sharing. At the heart of the
    Water Resources Development Act of 1986 were landmark beneficiary pay
    reforms, which included cost sharing. As a result of this change in the
    way the Corps does business, local sponsors, through funding and use of
    their expertise, have become active participants in the formulation,
    evaluation, and financing of projects. The willingness of non-Federal
    interests to participate in cost-share studies and projects often also
    serves as a critical market test of a project's merits. Overall, we
    have found it an eminently successful policy.
          Fiscal Responsibility. The Nation's water resources
    infrastructure must be planned, constructed, operated, maintained, and
    improved to meet future needs. However, this must be done in consonance
    with other national priorities and a balanced budget. We should never
    create false hope by authorizing projects that we cannot reasonably
    expect to fund or complete within a reasonable period of time. In light
    of the large backlog of ongoing Corps construction projects, and other
    authorized projects awaiting construction, we must limit the
    authorization of new studies, projects and programs and give priority
    to completion of ongoing construction projects. This will allow us to
    move toward a more sustainable long-term construction program and more
    timely project delivery to non-Federal sponsors.
    Army Civil Works Legislative Program for 2000
        The centerpiece for the Administration's legislative program for
    2000 is the authorization of the Comprehensive Everglades Restoration
    Plan to restore America's Everglades. We have previously provided
    detailed testimony and briefings on this high priority project and will
    not elaborate further in this statement. Instead, I will focus on the
    non-Everglades provisions in our WRDA 2000 proposal.
        Our WRDA 2000 proposal includes several provisions which, if
    enacted, will aid in the restoration of our natural environment. There
    are provisions aimed at more effectively meeting the needs of tribal
    and low-income communities. Finally, there are a number of provisions
    that will assist us in the management of existing Corps programs. I
    will discuss each of these areas in more detail below.
    Provisions to Assist in Environmental Restoration and Planning
          Puget Sound and Adjacent Waters. Puget Sound and adjacent
    waters encompass more than 15,000 square miles in northwest Washington,
    including all waters in the Puget Sound drainage basin. Significant
    amounts of wetland, estuary, and river and stream habitats have been
    degraded or destroyed as a result of Federal, State, and local actions,
    including Federal navigation projects, agricultural and forest
    activities, and urbanization. Improving the health of this resource
    area is critical to Tribes, the State, and the Nation at large because
    of its abundant fisheries, and habitats used by migrating waterfowl.
    Because of this great need, we have proposed legislation that will
    authorize the Army Corps of Engineers to undertake critical
    environmental restoration projects in the Puget Sound watershed.
    Projects would be implemented by the Corps with 65 percent Federal and
    35 percent non-Federal cost sharing. The maximum Corps funding of any
    one project would be limited to $2.5 million, with a total Corps
    program limit of $10 million. Projects would be selected with the
    concurrence of the Secretaries of the Interior and Commerce and in
    consultation with appropriate Federal, Tribal, State, and local
    agencies, and would provide immediate and substantial restoration,
    preservation, and ecosystem protection benefits.
          CALFED Bay Delta Program Assistance. One lesson we have
    learned from our work in the Everglades is how important it is to be
    able to look at an entire ecosystem or watershed and evaluate
    comprehensively a broader array of water and related land resources
    problems and opportunities. The CALFED Bay Delta Program, initiated in
    1995, represents an important collaboration among Federal and
    California State agencies and leading urban, agricultural, and
    environmental interests to address and resolve environmental and water
    management problems associated with the Bay-Delta system in central
    California. The Bay-Delta system is formed where the two foremost
    rivers of California's Central Valley meet. These rivers--the
    Sacramento and the San Joaquin--provide drinking water for 22 million
    people, and supply irrigation water for more than 4 million acres of
    some of the world's most productive farmland. It is the largest wetland
    habitat and estuary in the American West, and is a critical part of the
    Pacific flyway for migrating birds. The CALFED mission is to develop a
    long-term comprehensive plan that will improve the ecological health of
    the Bay-Delta system and improve water management for beneficial uses.
        We have proposed that the Secretary be authorized to participate in
    all CALFED planning and management activities, consistent with Public
    Law 102-575, and to integrate its activities in the San Joaquin and
    Sacramento River basins with the long-term goals of the CALFED Bay
    Delta Program. Currently, Army Corps of Engineers participation can be
    limited because the Corps in many instances must rely on project-
    specific authorizations that do not include participation in inter-
    agency, bay-wide planning and management activities. Our proposal will
    provide the authority for the Secretary to request funds for the Corps
    to participate in the CALFED Bay Delta Program, and to use funds
    provided by others to carry out ecosystem restoration projects and
    activities associated with the CALFED Bay Delta Program. The
    authorization would be to authorize the appropriation of $5 million in
    funds over a 4-year period starting in fiscal year 2002.
          Brownfields Revitalization Program. For several years,
    the Corps has been assisting, predominantly on a reimbursable basis,
    the Nation's efforts to restore abandoned, idled, or under-used
    industrial and commercial facilities where expansion or redevelopment
    is complicated by environmental contamination (i.e., Brownfields). We
    propose that the Army Corps of Engineers be authorized to establish and
    carry out a program to provide assistance to non-Federal interests in
    the clean-up and restoration of Brownfields where such clean-up and
    restoration will directly contribute to improving the quality,
    conservation, and sustainable use of waterways and watersheds. The
    Corps would use this authority to perform site characterizations,
    planning, design, and construction of projects to improve the quality,
    conservation, and sustainable use of streams, rivers, lakes, wetlands,
    and floodplains. Such activities in combination with the Corps'
    existing environmental restoration and protection authorities will
    enable the corps to participate more extensively in the overall Federal
    effort to revitalize Brownfield areas. The provision requires
    consultation with the Environmental Protection Agency and other
    appropriate agencies to ensure that Army Civil Works activities are
    integrated fully with the activities of others. Our proposal also
    includes language in Section 5(d) to clarify that this new authority
    would not modify existing law or agency authorities over Brownfields.
    Studies conducted under this authority would be in accord with normal
    study cost sharing, and the non-Federal share of projects would be 50
    percent. Non-Federal interest would provide the lands, easements,
    rights-of-way, and relocations; hold and save the Federal Government
    from claims and damages; and operate and maintain any project
    implemented under this authority. The legislation would authorize the
    Army Corps of Engineers to engage in these activities over a 4-year
    period beginning in fiscal year 2002, with a programmatic appropriation
    limit of $25,000,000 annually, for such studies and projects
    nationwide. There would be a $5,000,000 one-time Army Civil Works
    funding limit at any single site. In addition, the legislation calls
    for a report to be prepared evaluating the Corps' performance under
    this Brownfields Restoration Program, and for that report to be
    submitted to the Congress on findings and recommendations on the
    program by December 31, 2005.
          Watershed and River Basin Assessments. At a conceptual
    level, addressing water resources issues on a watershed scale is
    generally embraced as the most appropriate approach. In practice,
    however, agencies too often continue to focus on their parochial
    interests and address problems on a project-by-project basis. In many
    cases, this has resulted in ineffective solutions and inefficiencies.
    In this regard, we have included a provision in our WRDA 2000 to amend
    Section 729 of the Water Resources Development Act of 1986. This
    provision will enhance the ability of the Army Corps of Engineers to
    help address complex water resource problems that include large
    geographic areas across multiple governmental jurisdictions. It would
    also enhance the ability of the Corps to work efficiently and
    effectively in a watershed environment. Such assessments would be
    conducted in cooperation with other Federal, Tribal, State, interstate,
    and local governmental entities.
        The legislation would increase the total authorized appropriations
    limit for such assessments from the current $5,000,000 to $15,000,000,
    and add a non-Federal cost sharing requirement. The non-Federal share
    of the cost of such assessments would be 25 percent. The assessments
    would consider a broad variety of water resources needs tailored to the
    specific situation in a river basin or watershed. To the extent
    practicable, the assessments will consider and enhance those
    assessments already conducted by other Federal, State, and interstate
    agencies.
    Provisions for Tribal and Low-Income Communities
          Tribal Partnership Program. The proposed Tribal
    Partnership Program would enhance our ability to work with federally
    recognized Tribal governments, including Alaskan Natives, to determine
    the feasibility of potential projects for flood damage reduction,
    environmental restoration and protection, and cultural and natural
    resource management. The legislation acknowledges the unique
    relationship with Tribal governments, and authorizes the Secretary to
    consider traditional cultural knowledge and values when formulating and
    recommending projects to Congress for authorization, and unique Tribal
    capabilities during project development. We would coordinate with
    tribes and with the Department of the Interior and other Federal
    agencies to identify potential projects and to design and conduct
    feasibility studies, and would seek to avoid duplications of effort and
    to explore ways to integrate our resources with the activities of the
    affected agencies. The legislation would authorize the Army Corps of
    Engineers to engage in these activities over a 5-year period beginning
    in fiscal year 2002, with a programmatic appropriation limit of
    $5,000,000 annually for such studies and projects.
        In addition, there will be a $1,000,000 one-time Army Civil Works
    funding limit for any one tribe. In addition, we have included a
    provision for the Secretary to develop ability-to-pay procedures to
    assist low income and economically disadvantaged communities in funding
    studies and projects conducted under this authority.
          Ability to Pay. We are proposing that the ability to pay
    provisions of Section 103(m) of the Water Resources Development Act of
    1986 be further amended so that it would apply to the construction of
    environmental protection and restoration projects, and to feasibility
    studies for flood damage reduction and environmental restoration
    projects. We also believe that additional criteria beyond those
    provided under current law must be considered. For example, we have
    included language in our proposal to account for the non-Federal
    sponsor's financial ability to carry out its cost-sharing
    responsibilities, and to account for the additional financial
    assistance that may be available from other Federal agencies or from
    the State or States in which the project is located.
          Transfer of Project Lands. Our WRDA 2000 includes a
    proposal to authorize the Army Corps of Engineers to conduct a
    feasibility study for the transfer to Indian Tribes, from whom they
    were taken, lands that the Army Corps of Engineers acquired under the
    Pick-Sloan Missouri River Basin Program. The study to transfer such
    lands would be conducted in cooperation with the Secretary of the
    Interior and with the States of South Dakota, North Dakota, Nebraska
    and other affected interests, and affected Indian Tribes. The Corps of
    Engineers would conduct economic, environmental, cultural resource,
    hazardous waste, and other surveys and evaluations, and comply with
    applicable environmental and historic preservation laws.
    Provisions To Assist in the Management of Existing Programs
          Recreation Programs. In my Fiscal Year 2001 budget
    request for the Army Civil Works program, I announced a new initiative
    to modernize facilities at key recreation areas currently operated and
    maintained by the Army Corps of Engineers. The Corps manages 537
    Federal lakes (4,340 recreation areas) and administers approximately
    11.7 million acres of land and water in 43 States. These projects host
    377 million visitors annually. In support of the recreation
    modernization initiative, I have developed two legislative provisions.
    First, I am asking for the authority to implement a program to reduce
    vandalism and destruction of property at water resources projects under
    the jurisdiction of the Army. Second, I am asking that the Army be
    given explicit statutory authority to participate in, and help fund,
    the state-of-the-art National Recreation Reservation Service (NRRS)
    developed by the U.S. Forest Service. The NRRS has been very successful
    in providing the public with a one-stop-shop reservation service for
    recreation opportunities. More than 600,000 Internet reservations were
    made during the 1999 recreation season.
          Project Deauthorizations. The Army Corps of Engineers has
    many authorized projects that have not been completed, and many that
    will never be constructed, all of which are contributing to the growing
    backlog of Civil Works projects. Currently, there is a construction
    backlog of about $46 billion. This includes all authorized projects,
    whether or not they have received funding. The size of the construction
    backlog does not include the many known projects still in the study or
    review stage that are awaiting authorization. Sufficient funding is
    simply not available to implement all of these projects in a timely
    way. To take a small, but important step, to remedy this situation, we
    propose to modify the current criteria for deauthorizing projects. The
    proposal identifies a reasonable time period after which a project
    should be under construction. Where this does not occur, and Congress
    has been given ample notice but not reauthorized the project, we
    believe that the project should be ``taken off the books''
    automatically by deauthorization.
          Flood Damage Reduction Program. There are two provisions
    aimed at improving the flood damage reduction program. First, there is
    a measure to change the cost sharing for structural flood damage
    reduction projects to 50 percent Federal and 50 percent non-Federal.
    The cost sharing for non-structural project would remain at 65 percent
    Federal and 35 percent non-Federal. We believe that this increase in
    the local cost-share is needed to provide a truer ``market test'' for
    our structural flood damage reduction projects. Within the Corps'
    budget, this change would free up Federal funds for other projects and
    programs and would provide a stronger incentive to communities and to
    the Corps to consider non-structural flood damage reduction
    alternatives. Our recommended revisions to Section 103(m) of the Water
    Resources Development Act 1986 (Ability-to-Pay), discussed above, would
    complement this proposal. Together, these two proposals would ensure
    that needed flood damage reduction projects can go forward in all
    communities, regardless of their current level of prosperity.
        Second, we propose to strengthen the flood plain management
    requirements of Section 402 of the Water Resources Development Act of
    1986, to require non-Federal interests to take measures to preserve the
    level of flood protection that the projects are intended to provide
    when they are constructed.
    Provisions for Project Authorizations
        Since the last Water Resources Development Act, the Army Corps of
    Engineers has submitted only one project to me for authorization. On
    May 15, 2000, I received the Chief of Engineers recommendation on the
    New York and New Jersey Harbor Navigation Project. My office will now
    review this proposal, and the Administration will now be able to
    consider the project for authorization. I expect to be able to submit
    my recommendation on this important project in time for Congress to
    consider it for authorization in WRDA 2000. In addition, the Army Corps
    of Engineers has certain other projects that are in the final stages of
    its planning process. As these projects are submitted to me, we will
    review them and forward them to the Congress with the Administration's
    recommendation.
        In regard to potential project authorizations in WRDA 2000, I
    strongly urge the Committee to authorize only those projects that have
    completed executive branch review. We believe this will improve our
    ability to construct projects that will benefit the Nation.
        Roughly three-quarters of the significant new project in last
    year's WRDA 1999, and many of its project modifications, were still in
    the planning stage or undergoing review when Congress authorized them.
    Many of these projects have not yet completed the review required for
    proposed Federal water resources projects under Executive Order 12322.
    Until they have done so, neither the Executive branch nor the Congress
    is likely to know which of these project will raise significant
    concerns regarding their scope, economic and technical feasibility,
    environmental acceptability, or the ability of local sponsors to
    provide the required cost-share.
    Harbor Services Fund and User Fee
        Last year, the Administration transmitted to Congress its Harbor
    Services Fund and User Fee proposal to establish a new mechanism for
    financing development, operation and maintenance of the Nation's ports
    and harbors. The new Fund and user fee would replace the Harbor
    Maintenance Trust Fund, and the Harbor Maintenance Tax, a portion of
    which was found unconstitutional and has been the subject to questions
    raised by U.S. trading partners regarding claims that it violates the
    General Agreement on Tariffs and Trade. This fee would collect about
    the same total amount of revenue as would have been collected under the
    Harbor Maintenance Tax prior to the Supreme Count's decision. Enactment
    of the proposed new fund and user fee would provide a much needed,
    stable, long-term source of financing to enable commercial harbor and
    channel work to proceed on optimal schedules. I urge prompt
    congressional action on this important proposal.
    Conclusion
        Mr. Chairman, this concludes my testimony. I stand ready to work
    with you and your Subcommittee in developing this important
    legislation. We would be pleased to answer any questions you or the
    Subcommittee may have..
                                     ______

     Responses by Dr. Joseph Westphal to Additional Questions from Senator
                                     Smith
        Question 1. Why do you believe that the new deauthorization process
    will be an improvement upon the way projects currently are authorized?
        Response. The proposed changes should expedite the deauthorization
    of authorized projects and separable elements of projects that have not
    been and are not likely to be funded for construction. The proposal
    introduces new criteria and schedules that should reduce the backlog of
    inactive and deferred construction projects over a shorter period of
    time.

        Question 2. Your deauthorization provision, as written, would not
    apply until 3 years after the date of enactment. Why do you propose
    deferring the implementation of this new process?
        Response. The proposal establishes two separate timetables for
    deauthorization. Section 16(a) applies to ``projects never under
    construction'' and section 16(b) to ``projects where construction has
    been suspended.'' Under section 16(a) projects meeting the
    deauthorization criteria would be identified after 4 years and
    deauthorized after seven. Under section 16(b), the timing is 2 years
    and 5 years. Projects identified for deauthorization under both
    timetables are reported to Congress annually. Note the 3-year wedge
    between identification and deauthorization. To initiate this wedge upon
    enactment would require a 3-year deferral on Reauthorizations.

        Question 3. As Senator Baucus mentioned at the hearing, the Corps
    provided the Committee with a list of how many active, inactive, and
    deferred projects are in the $46 billion backlog. $8 billion of these
    projects are listed as inactive or deferred. Are there additional
    projects in the active category that would be eligible for
    Reauthorization in this cycle if the Administration's proposal were
    enacted?
        Response. Under the Administration's proposal, there could be
    projects in the active category that are Reauthorized. The proposal
    establishes new criteria and timetables for the Reauthorization of all
    authorized projects, notwithstanding their classification as active,
    inactive or deferred. If an ``active'' project were to meet the
    criteria, then it would be identified and Reauthorized. For example, an
    ``active'' project in the design or land-acquisition phase could still
    be Reauthorized because, in most cases, construction funds for
    ``physical work'' must be obligated to prevent Reauthorization.

        Question 4. Would projects in the Puget Sound area still be
    eligible for Section 206 authority if Section 19 were enacted?
        Response. Yes.

        Question 5. What would Section 19 accomplish that is beyond the
    scope of Section 206 authority?
        Response. Section 19 would allow for a regional prioritization of
    environmental restoration projects, using criteria that are unique to
    the Puget Sound area. The needs for environmental restoration in the
    Puget Sound Watershed far exceeds the parameters of the 206 program,
    which also must serve the needs of the rest of the nation. Section 19
    will permit a comprehensive approach in addressing ecosystem and
    habitat problems throughout the Puget Sound basin. It allows for a
    program to address critical ecosystem restoration needs for
    environmental resources that have national importance, such as Pacific
    Northwest salmon. Project prioritization will occur at a local level,
    to ensure ecosystem restoration needs of the region are best being met.
    The new authority will provide additional Federal funding to match
    state, local, tribal, and private sources, allowing more high priority
    projects to be completed.

        Question 6. How do you expect to fund these regional programmatic
    authorities? these authorities compete with the already existing
    national authorities for funding?
        Response. This authority will be funded using the annual budget
    request process and will be consistent with the project authorization.
    It is envisioned that the budget requests will be made based on the
    merits of the restoration projects being considered for construction.

        Question 7. Describe the historic involvement of the Army Corps in
    the Puget Sound region.
        Response. The Corps of Engineers has been constructing civil works
    projects in the Puget Sound region since the early 1900's. Authorized
    projects in the Puget Sound region include multiple flood control,
    shoreline and riverbank erosion control, debris clearing and snagging
    operation, irrigation, and navigation projects. In recent years, the
    focus of Corps activities has been upon environmental restoration.
    Since the late 1980's, Seattle District has undertaken several
    Continuing Authority Projects, constructing seven Section 1135
    projects, with another five to be completed within the next few years.
    There are five Section 206 projects underway, with a backlog of six
    additional projects awaiting funding to be initiated. In addition,
    Seattle District has five General Investigation Ecosystem Restoration
    projects underway, with two ready for WRDA 2000 authorization.

        Question 8. Over the last five fiscal years, how much of the
    Section 206 funding has been directed to the Puget Sound region?
        Response. Since the 206 program was authorized in 1996, the Seattle
    District has expended $900,000 in studies, which will lead to
    approximately $4,800,000 in restoration construction.

        Question 9. How would the S.729 watershed assessments differ from
    the traditional reconnaissance and feasibility studies?
        Response. Traditional reconnaissance and feasibility studies have
    typically focused on narrower problems and solutions. The 729
    assessments would better enable the Corps to address complex water
    resource problems that include large geographic areas, with multiple
    governmental jurisdictions, having multiple potential sponsors and
    involving significant interest by other Federal agencies.

        Question 10. In the Administration's fiscal year 2001 budget
    proposal, four such watershed assessments are requested. Have other
    assessments been conducted under Section 729 authority and if so, what
    were the results and what was done with this information?
        Response. The fiscal year 2001 Budget identifies four comprehensive
    river basin planning studies. Two of these studies, the Rio Grande
    River Basin and the White River Basin, Arkansas would utilize the
    authority of Section 729. The total Federal share of each of these
    studies is $2 million. Previously, Section 729 authority was used to
    accomplish the National Study of Water Management During Drought,
    completed in 1995. This study concluded that more skillful and
    integrated water management is needed and developed a new concept for
    Drought Preparedness Studies.

        Question 11. What was the impetus behind requesting a costshare
    change for Section 729 assessments?
        Response. The request for a change in the costshare recognizes the
    importance of leveraging Corps dollars and achieves a level of
    comparability with other Corps programs that address similar types of
    problems.

        Question 12. In what ways is the New York-New Jersey Harbor
    Deepening project of national significance?
        Response. The New York & New Jersey Harbor Deepening project serves
    the Port of New York and New Jersey, which is the third largest
    container port in the nation and the largest on the East Coast. In
    1997, the Port handled over 2.3 million TEU's (20-foot equivalents) of
    containerized cargo. This increased to approximately 2.4 million in
    1999. The Corps's economic project in the feasibility report expects a
    further increase to 19 million in the year 2060. Approximately 70
    percent of this cargo was either destined for or originated in the 31
    county metropolitan tri-state area that contains 40 percent of the
    nation's population. The remaining cargo is either destined for or
    originated in a 17 state area that extends from New York to Missouri
    and from Maryland to Maine.
        In addition, the New York & New Jersey Harbor Deepening Project is
    of national significance because of its contribution of more than $238
    million in annual national economic development benefits. These
    benefits are in the form of reduced costs for the waterborne
    transportation of containerized cargo. Reducing waterborne
    transportation cost results in the consumer paying less for the
    products that they demand, and producers paying less for imported
    inputs, which increases the demand for U.S. labor. Both of these
    effects contribute to the overall economic welfare of the Nation.

        Question 13. If the New York-New Jersey Harbor Deepening Project
    were authorized, what would be the breakdown, annually, of the Federal
    appropriations over the life of the project (e.g. how much in fiscal
    years 2002, 2003, 2004, etc.)?
        Response. Based on the construction schedule presented in the
    feasibility report, construction of the project would begin in fiscal
    year 2003 and continue until fiscal year 2016. The schedule of Federal
    appropriations for the construction of the project is below. The funds
    identified in fiscal year 2017 through 2021 are for the completion of
    environmental monitoring of the project effects. The difference between
    the recommended authorized amount and the amount shown is the cost of
    completing the Preconstruction Engineering and Design Phase (Gl
    funded). It is further noted that the local non-Federal sponsor, the
    Port Authority of New York and New Jersey, has expressed a desire to
    have the channels leading to its Newark Bay Facilities be completed by
    2009 in order to meet its commitment to Maersk-SeaLand. The District
    continues to examine the schedule and will determine during the
    Preconstruction Engineering and Design Phase whether this requirement
    is viable.

    ------------------------------------------------------------------------
                            Year                             Federal Funds
    ------------------------------------------------------------------------
    2003................................................  $66,000,000
    2004................................................  $70,000,000
    2005................................................  $73,000,000
    2006................................................  $69,000,000
    2007................................................  $70,000,000
    2008................................................  $68,000,000
    2009................................................  $59,000,000
    2010................................................  $61,000,000
    2011................................................  $57,000,000
    2012................................................  $58,000,000
    2013................................................  $31,000,000
    2014................................................  $11,000,000
    2015................................................  $18,000,000
    2016................................................  $12,000,000
    2017................................................  $177,000
    2018................................................  $101,000
    2019................................................  $101,000
    2020................................................  $101,000
    2021................................................  $101,000
    Total...............................................  $723,581,000
    ------------------------------------------------------------------------

        Question 14. Are there currently harbor-deepening authorizations
    that have not been executed for channels that comprise the New York-New
    Jersey Harbor Deepening project. If so, and if this project were
    authorized, would these authorizations be obsolete, so to speak, could
    they be Reauthorized? What would be the impact on the backlog?
        Response. Congress authorized the Arthur Kill Channel-Howland Hook
    Marine Terminal (to 41 feet below mean low water) and the New York and
    New Jersey Channels-Port Jersey Channel (to 41 feet below mean low
    water). Both of these projects are for high priority deep draft
    navigation purposes with strong benefit-to-cost ratios. As demonstrated
    in the their Limited Reevaluation and Chiefs of Engineers Reports,
    there continues to be a need for theses two channels to be constructed
    now, which has resulted in them being included in the President's
    Budget for fiscal year 2001. In recognition of the future overlapping
    of these three projects, the District Engineer recommended that
    construction of these two projects be initiated and that, upon
    authorization of the New York & New Jersey Harbor project, the
    authorities and appropriations be combined and construction all the
    recommended channel projects to 50 feet directly can proceed. The Chief
    of Engineers concurred with these findings. Initiating these two
    projects now will ensure that the overall deepening to 50-feet is
    completed as soon as possible. As such, the Corps does not recommend
    Reauthorization for these channels at this time.
        Response by Dr. Joseph Westphal to Additional Question from Senator
    Voinovich

        Question. The Administration is proposing a programmatic authority
    for critical restoration projects in the Puget Sound region with a
    Federal share of up to $2.5 million. There are Corps national
    programmatic authorities for environmental restoration under Section
    1135 of WRDA 86 and Section 206 of WRDA 96. The Puget Sound restoration
    projects would be potentially eligible for implementation under these
    national environmental restoration authorities. What is the
    justification for creating a special authority for the Puget Sound
    Region? Won't every region of the country want their own special pot of
    money? Wouldn't it be better to increase the appropriation limits on
    the national authorities which are available to all regions of the
    country?
        Response. The National Marine Fisheries Service recently added
    several State of Washington populations of salmon and steelhead in
    Washington to the endangered species list, marking the first time
    Federal protection has been extended to salmon found in streams in
    heavily populated areas of the Pacific Northwest, including the Seattle
    metropolitan area. The salmon is a species of national significance,
    and its demise would have untold social, economic, and environmental
    impacts. Whereas the existing authorities have been quite effective for
    implementing restoration projects on a case by case basis, the needs
    for restoration work in the Puget Sound Basin far exceeds the
    parameters of the Section 206 program, both in terms of
    comprehensiveness and in funding availability. This new authority will
    address the specific need to restore resources of national importance
    by ensuring an ecosystem approach to the evaluation of habitat problems
    in the entire basin, bringing wide-scale comprehensive restoration
    throughout the Puget Sound. The new authority will provide additional
    Federal funding to match state, local, tribal, and private sources,
    allowing more high priority projects to be completed.
                                     ______

     Responses by Dr. Joseph Westphal to Additional Questions from Senator
                                     Baucus
        Question 1. Please provide specific information on the amount
    (e.g., number of acres) of mitigation the Corps has been legally
    required (e.g., under Record of Decisions, Final Environmental Impact
    Statements, Memoranda of Understandings, or Project Cooperation
    Agreements) to perform over the last 10 years.
        Response. To respond to this question, a survey was made of all our
    field offices. The results of this survey revealed that 440,217 acres
    of mitigation have been required.

        Question 2. What amount (e.g., number of acres) of this mitigation
    has been implemented over this Period. What amount has been completed?
        Response. The survey indicates that of the 440,217 acres required,
    263,478 acres have been acquired to the present time. The problem with
    compiling this information was that there are numerous ongoing projects
    where required mitigation acres are still being acquired, projects
    where mitigation was accomplished on a combination of Federal and non-
    Federal previously owned lands, lands purchased for other purposes were
    used to satisfy mitigation requirements, etc. In short, there is no
    direct correlation between the summary of acres required and acres
    acquired that can be used for determining amount of mitigation that has
    been completed. In many cases one would have to look at the individual
    project mitigation plan and execution of that plan to determine amount
    completed. Similarly the cost to acquire the mitigation acres
    corresponds only to the acres acquired and does not reflect the total
    cost of mitigation accomplished.

        Question 3. What amount of mitigation completed over the past 10
    years has been demonstrated through monitoring to provide the benefits
    (including habitat value and structure) predicted in Record of
    Decisions, Final Environmental Impact Statements, Memoranda of
    Understandings, or Project Cooperation Agreements?
        Response. The amount of mitigation completed over the past 10 years
    that has been demonstrated through monitoring to provide predicted
    benefits also varied from project to project based upon whether or not
    monitoring was included in the mitigation plan. The decision to include
    or not include monitoring is dependent upon the magnitude of the
    project and the degree of risk and uncertainty with the probable
    success of the mitigation. Therefore, no attempt has been made to
    summarize the relative degree of success each project mitigation plan
    achieved.
                                     ______

      Affadavits of Staff of the U.S. Army Corps of Engineers Provided to
        Senator Voinovich, Chairman, Subcommittee on Transportation and
                                 Infrastruture
                                document request
        1. Letters of April 17, 1998, from MG Anderson to BG Van Winkle.
        2. All internal Corps communications in whatever form dealing with
    the substantive and procedural status of the UMRS between January 1,
    1998, and April 1, 2000.
        3. Principles and Guidelines for federal water resources agencies.
        4. National Academy of Sciences study of Corps' planning process.
        5. Instructions given to Dudley Hanson for the persons conducting
    the in process reviews, if extant in writing.
        6. Statement made on September 23, 1998, to review group, if extant
    in writing.
        7. All communications received from interest groups between January
    1, 1998, and December 31, 1998, concerning the merits of economic
    models and assumptions in the UMRS.
        8. All responses sent by the Corps to such groups during the same
    period.
        9. All written comments received by the Corps from the Department
    of Agriculture during the same period.
        10. All responses sent to the Department of Agriculture by the
    Corps during the same period.
        11. The results of the in progress reviews with respect to the
    relative merits of the economic models employed for the UMRS.
        12. Guidance from MG Fuhrman relative to the in progress reviews,
    in whatever form extant.
        13. Any notes taken by Dudley Hanson with respect to such guidance,
    either concurrently or later.
        14. Preliminary economic analyses for reliability studies.
        15. Draft reports of June 1998 and April 1999.
        16. Engineering work group comments on April 1999 report.
        17. Interim Revised Lock Extension Design Concept Report of March
    1998.
        18. Additional preliminary economic analysis of that Report, and
    reevaluation done in response thereto.
        19. Document containing August 1997 comment regarding
    contingencies.
        20. Any internal communications regarding suitability of particular
    economic and engineering models and assumptions with respect to
    results.
        21. Any preliminary and final papers prepared in response to
    requests from Congress or in connection with preparing a report to
    Congress.
        22. E-mail message of February 4, 2000, or thereabouts from Harry
    Kitch to Dr. Jim Johnson regarding meeting with MG Van Winkle.
        23. Affidavit of Don Sweeney.
        24. Jeffrey Marmorstein's notes of conversation with Mike Grunwald,
    February 3, 2000.
        25. All economic elasticity studies for grain in the UMRS.
        26. Actual figures for grain shipments since 1989 on the waterways
    in question, with elasticity figures for the same.
        27. Projections for grain shipments on these waterways through
    2015, with elasticity figures based on the same.
        28. Memorandum summarizing December 1999 meeting in Vicksburg,
    Mississippi, quoted in Lenard Ross affidavit.
        29. Memorandum of February 4, 2000, quoted in David Sanford
    affidavit.
        30. Transcripts, minutes, or notes from video teleconference of
    January 28, 2000, and meeting of February 4, 2000.
        31. Communications from interest groups supporting statement in
    paragraph 9 of Hans Van Winkle affidavit.
                               list of affidavits
        TAB A. MG Phillip R. Anderson
        TAB B. Mr. Thomas F. Caver
        TAB C. MG Russell L. Fuhrman
        TAB D. Mr. Dudley Hanson
        TAB E. Mr. Bobby R. Hughey
        TAB F. Mr. Harry E. Kitch
        TAB G. Mr. Jeffrey Marmorstein
        TAB H. Colonel James V. Mudd
        TAB I. Mr. Lenard H. Ross
        TAB J. Mr. David B. Sanford, Jr.
        TAB K. Mr. Paul D. Soyke
        TAB L. MG Hans Van Winkle
                                      Department of the Army,
                                  U.S. Army Corps of Engineers,
                                Washington, DC 20314-1000, 03 MAR 2000.

    Honorable George V. Voinovich, Chairman,
    United States Senate,
    Committee on Environment and Public Works,
    Washington, DC 20510-4175

    Dear Senator Voinovich: This letter and the attached statements and
    affidavits respond to the Committee on Environment and Public Works'
    February 28, 2000 inquiry regarding the Upper Mississippi and Ilinois
    Rivers Navigation Project. Many of the questions were directed to
    individuals who will later, in all likelihood, provide information to
    other federal investigators, examining the same allegations. Therefore,
    their responses to the Committee's questions are being provided to you
    and your Committee by means of sworn affidavits.
        We welcome this opportunity to provide the Committee with
    information it feels is essential to oversight of Corps Programs. This
    is the Corps' first opportunity to respond to the allegations. We trust
    the information provided presents a more balanced view of the issues
    surrounding the Upper Mississippi and Illinois Rivers Navigation
    Project Study than has emerged to date in press reports. As I testified
    before the Committee on February 24, 2000, I welcome, and will fully
    support, all independent outside investigations of the allegations and
    Congressional oversight of our process. I believe in the
    professionalism and dedication of the United States Army Corps of
    Engineers and its leadership. I am confident, as I stated before, that
    your trust in the integrity of the Corps will be intact after a review
    of our responses.
        We stand ready to answer any further questions you or your
    Committee members have about the study.
                Sincerely,

            Joe N. Ballard, Lieutenant General, USA Commanding.
                                     ______

                             QUESTIONS AND ANSWERS

        Question 1. The Washington Post in a story dated February 24, 2000
    states that a February 4, 2000 memo by Corps planner Harry Kitch stated
    that General Van Winkle said ``we are the navigation proponent and we
    can't have a limp-wristed recommendation saying to build something out
    in 2025.'' What did General Van Winkle and Mr. Kitch mean by this
    statement?
        Answer: See the attached affidavits of MG Hans Van Winkle (TAB L)
    and Mr. Harry E. Kitch (TAB F).

        Question 2. The Washington Post, in a story dated February 24, 2000
    states that a February 4, 2000 memo by Corps planner Harry Kitch stated
    that at one point during the meeting ``concern was expressed that if we
    don't provide for the industry, navigation program might get moved to''
    the Department of Transportation. What did the participants in the
    meeting interpret this to mean?
        Answer: See the attached affidavits of MG Hans Van Winkle (TAB L),
    Mr. Thomas F. Caver (TAB B), Mr. Harry E. Kitch (TAB F), and Mr. David
    B. Sanford, Jr. (TAB J).

        Question 3. The Washington Post, in a story dated February 24, 2000
    states that a slide show presentation cites certain ``impediments to
    growth'' including the laws governing the agency's conduct and the
    departure of some powerful friends on Capitol Hill-and calls for a
    ``specifically targeted communications plan'' to bring Congress and the
    Clinton administration on board. What did the people who put together
    this slide show mean by this statement?
        Answer: See the attached affidavit of Mr. Thomas F. Caver (TAB B),
    and the slide show presentations (Exhibits 1 and 2).

        Question 4. The Washington Post, in a story dated February 15, 2000
    states that assistant Army Secretary in charge of the Corps' $4 billion
    civil works program, met with (Secretary) Caldera yesterday to discuss
    the situation. Six environmental groups wrote to him in 1998 to ask him
    to review the Upper Mississippi study; he never responded to their
    letter. Yesterday, though he said he took Sweeney's allegations ``very
    seriously''. Why did Assistant Secretary Westphal fail to respond to
    the 1998 request from the six environmental groups to review the Upper
    Mississippi study?
        Answer: Assistant Secretary Joseph Westphal will provide his
    response under separate cover.

        Question 5. The Washington Post in a story dated February 13, 2000
    states that top officials ordered the study team ``to support a
    defensible set of . . . projects,'' and eventually rearranged the
    numbers so that they supported a case for construction. One memo
    candidly declared that if the economics did not ``capture the need for
    navigation improvements, then we have to find some other way to do
    it.'' Who are the top officials that ordered the study team to support
    a defensible set of projects? What did these top officials mean by
    ``other ways'' to capture the need for navigation improvements.
        Answer: The statements were contained in an email from Dudley M.
    Hanson dated September 25, 1998. (Exhibit 3). In responding to this
    email a short time later, Mr. Harry E. Kitch disagreed with some of the
    statements Mr. Hanson had made. (Exhibit 3). Included among those
    disagreements were Mr. Hanson's impressions regarding ``supporting a
    defensible set of projects'', and ``other ways to capture the need for
    navigation improvements.'' In his affidavit, Mr. Hanson has explained
    what he meant by those two subjects in a manner that is consistent with
    Mr. Kitch's understanding as well as what MG Russell Fuhrman has stated
    in his affidavit (TAB C).

        Question 6. The Washington Post in a story dated February 13, 2000
    states that Corps research analyst Jeffrey Marmorstein said ``It's very
    sad that this study is becoming another embarrassment''. The story also
    states the Mr. Marmorstein said that ``Unfortunately, the management of
    the Corps has lost all respect for unbiased analysis.'' What did Mr.
    Marmorstein mean when he said that study was becoming an embarrassment
    and the management of the Corps has lost all respect for unbiased
    analysis?
        Answer: See the affidavit of Jeffrey Marmorstein (TAB G).

        Question 7. The Washington Post in a story dated February 13, 2000
    states that a memo summarizing a December meeting in Vicksburg states
    that ``To grow the civil works program [headquarters] aud the Division
    have agreed to get creative,'' and ``They will be looking for ways to
    get [studies] to `yes' as fast as possible. We have been encouraged to
    have our study managers not take `no' for an answer. The push to grow
    the program is coming from the top down. ``What did the writer of the
    memo mean by ``getting to yes as soon as possible'' and that study
    managers not take `no' for an answer?
        Answer: See the affidavit of Lenard H. Ross (TAB I).

        Question 8. The Washington Post in a story dated February 13, 2000
    states that in June (1998), just three months before the study's due
    date, General Anderson transferred all economics questions to a new
    panel, demoting Sweeney to a mere ``advisor'' to the panel. Why did
    General Anderson transfer all duties to a new panel and why did he
    demote Mr. Sweeney to an advisor?
        Answer: See the affidavit of MG Phillip R. Anderson (TAB A).

        Question 9. The Washington Post in a story dated February 13, 2000
    states that on September 3 (1998) an official laid out the panel's new
    mission in an e-mail: ``The team should determine an alternative . . .
    that appears to be the most likely to justify large-scale alternatives
    in the near-term.'' Who was the official and what did he or she mean by
    an alternative that was likely to justify near term large scale
    alternatives in the near future?
        Answer: See the affidavit of Paul D. Soyke (TAB K).

        Question 10. The Washington Post in a story dated February 13, 2000
    states that project manager Dudley Hanson wrote a memo relaying (Major
    General) Fuhrman's instructions to the panel ``If the demand curves,
    traffic growth projects (sic) and associated variables . . . do not
    capture the need for navigation improvements, then we have to figure
    out some other way to do it . . . We need to develop a rationale for
    making this relatively more subjective approach to our analytical
    process.'' The story also indicates that the memo's ``Guidance''
    section was even more explicit about Fuhrman's call for preordained
    results: He directs that we develop evidence or data to support a
    defensible set of capacity enhancement projects. . . The rationale
    should ere on the high side.'' Is the memo an accurate account of Major
    General Fuhrman's instructions to the panel? If so, what did Major
    General Fuhrman mean by figuring, out a way to capture the needs for
    navigation improvements and a ``more subjective approach to our
    analytical process'' and what did he mean by ``evidence or data to
    support a defensible set of capacity enhancement projects'' and that
    the ``rational should err on the high side''.
        Answer: See the affidavit of MG Russell L. Fuhrman (TAB C).

        Question 11. The Washington Post in a story dated February 13, 2000
    states that project manager Dudley Hanson wrote in another e-mail
    ``This overt advocacy role, to me, is a new departure. We'll have to
    work in a story line. . . We will need corporate solidarity when we go
    back to our publics with this more aggressive advocacy position.'' What
    did Mr. Hanson mean by an overt advocacy role?
        Answer: See affidavit of Mr. Dudley Hanson (TAB D).

        Question 12. The Washington Post in a story dated February 13, 2000
    in discussing an economic equation states that Sweeney computed the
    main n value a 2. Burton later concurred. Under pressure from above,
    Richard Manguno, the new economics team leader, reluctantly reduced n
    to 1.5. But that was still too high to justify lock expansion, and he
    refused to go lower without a command. Later in the story it is stated
    that three weeks later (Colonel) Mudd called (Mr.) Manguno. N he
    declared was now 1.2. Did officials of the Corps pressure Mr. Manguno
    to lower the N value? If so, who were these officials and on what basis
    was the value lowered? Did Colonel Mudd lower the N value to 1.2? If
    so, on what basis was the value lowered?
        Answer: See the affidavit of Colonel James V. Mudd (TAB H).

        Question 13. The Washington Post in a story dated February 13, 2000
    states that a Corps ``study update'' announced a sudden new benefit:
    Lock expansion would preempt the need for renovations in 2015--even
    though an earlier Corps analysis had found there would be no need for
    renovations until at least 2033. The same update also included a sudden
    new cutback in costs: The estimate for overruns was chopped from 35
    percent to 25 percent. Earlier, Corps officials had inflated the
    benefits of lock expansion by assuming the tows would no longer use
    much self-help, Sweeney argued. Did the study update change the date of
    renovations from 2033 to 2015 and, if so, on what basis? Did the study
    update cut the contingency factor from 35 percent to 25 percent, and if
    so, on what basis? Was the assumption on the use of self-help reduced
    and, if so, on what basis?
        Answer: See the affidavit of Mr. Bobby R. Hughey (TAB E).

        Question 14. The Washington Post in a story dated February 13, 2000
    states that on July 4, (1999) (Colonel) Mudd disbanded the (economics)
    panel. Why did Colonel Mudd disband the panel when the study was not
    yet complete?
        Answer: See the affidavits of MG Phillip R. Anderson (TAB A) and
    Colonel James V. Mudd (TAB H).
                                     ______

                                     TAB A
      before the united states senate committee on environment and public
             works, affidavit of major general phillip r. anderson
        Pursuant to 28 U.S.C. Sec. 1746, the undersigned hereby executes
    the following sworn statement under penalty of perjury.
        1. I, Phillip R. Anderson do hereby declare that I am a Major
    General in the United States Army currently serving, since July, 1997
    as the Division Commander and Division Engineer of the U.S. Army Corps
    of Engineers, Mississippi Valley Division (CEMVD). I also am the
    President of the Mississippi River Commission.
        2. This affidavit is being prepared in response to written
    questions in a letter from Senator George V. Voinovich dated February
    28, 2000, on behalf of the Senate Committee on Environment and Public
    Works. Senator Voinovich's letter and the attached questions relate to
    the U. S. Army Corps of Engineers' (USAGE) Upper Mississippi River and
    the Illinois Waterway System Study (UMRS). With regard to the assertion
    contained in Question 8 of the Senator Voinovich letter to the effect
    that I allegedly ``demoted'' Dr. Sweeney, I am able to state without
    qualification that Dr. Sweeney is and remains a GS-13 senior regional
    economist with the St. Louis District. He has neither been demoted or
    reduced in grade by an adverse personnel action.
        3. The UMRS is a comprehensive and complex effort. Over seventy
    (70) employees of the U.S. Army Corps of Engineers (USAGE) have been
    involved in a variety of capacities in the study. These personnel come
    from a number of USACE organizational elements. Throughout the study,
    work and leadership responsibilities have changed. Due to the magnitude
    of the study and the complexities involved, there should be no
    expectation by any staff member that they will have the same exact
    responsibilities during the entire duration of the study.
        4. Changes in work responsibilities have been made for a variety of
    reasons. On April 16, 1998, I cancelled a meeting scheduled for April
    23, 1998 in St. Louis with the Governors' Liaison Committee (GLC),
    since schedule deadlines had not been met; economic and environmental
    data were missing; there was 3 need to examine differences between
    economic models being used on the Ohio River and those on the
    Mississippi River; cost quantification of measures that could be used
    to avoid and minimize environmental impacts had to be done; and there
    was a need to perform hazard analyses of industry self help measures.
    (See Attachment 1). In a letter dated April 16, 1998 to the GLC, I
    described in more detail what USACE had to do before we could have a
    GLC meeting. (Attachment 2). I specifically advised the GLC that a
    number of study components were behind schedule. In spite of the
    schedule slippages however, I advised the GLC that we were reevaluating
    the schedule and making sure that there were no short-cuts of any of
    the planned coordination. A number of products had to be completed
    before we had a meeting with the GLC. These included the following:
    ``Technical review of economic products including modal-shift analysis,
    the equilibrium model and the optimization model;'' and ``Outputs of
    economic models (traffic projections) for various alternatives needed
    for input to environmental models.'' (Attachment 2).
        5. As the above listing shows, schedule slippages in this very
    important study were becoming serious. Generally, the responsibility
    for maintaining study schedules rests with the District Commander. The
    UMRS was an unusual comprehensive effort in that four of the CEMVD
    Districts were directly involved in the study analysis or in the
    independent technical reviews. Since the UMRS involved resources in
    more than one district, I had a greater role and responsibility for
    ensuring that the UMRS was a quality product.
        6. In order to get the UMRS back on track and to assure better
    adherence to the schedule I had to make some changes to the management
    structure of the UMRS. I identified actions that I determined, based on
    staff recommendations, were necessary to correct study management
    schedule and product deficiencies, in letters dated June 17, 1998 to
    Major General Hans Van Winkle, who during the June 1998 timeframe
    General Van Winkle was of the rank of Brigadier General and was the
    Division Commander and Division Engineer of the Great Lakes and Ohio
    River Division (CELRD), and the three District engineers in the New
    Orleans District, the St. Louis District and the Rock Island District.
    (Attachments 3 and 4). I had a concern that higher level management was
    needed to restore the schedule and obtain quality products. I
    designated Dudley Hanson, who was the top ranking civilian of the Rock
    Island District at the time, as the full-time project manager of the
    UMRS to achieve those objectives. In order to have better leadership of
    the economic work products, I created an economics panel that consisted
    of the functional economic branch chiefs of the St. Louis, Rock Island
    and New Orleans Districts. Consistent with selecting a higher graded
    project manager, I also selected a higher graded economist, the GS-14
    Chief of Economics Branch in New Orleans, Rich Manguno, to chair the
    panel. Ms. Diane Karnish, GS-13 Chief of Economics Branch in St. Louis
    (Dr. Sweeney's supervisor) was also a panel member. Additionally, Mr.
    Paul Soyke, GS-13 Chief of Economics Branch in Rock Island was a panel
    member. Mr. Wes Walker of USAGE's Lakes and River Division's (CELRD)
    Huntington District was also a panel member. CELRD has been considered
    a center of expertise for economic evaluations of inland navigation
    projects. I coordinated with General Van Winkle to obtain help from Mr.
    Wes Walker. As such, the designation of a full-time senior project
    manager and an economic panel compromised of District Chiefs of
    Economics brought more leadership resources and economics expertise to
    the study and thus a broader perspective of the study was anticipated.
    My goal in effecting these measures was to achieve the production of a
    quality study within a schedule designed to achieve the deadline of
    issuing a final feasibility report and environmental impact statement
    to USACE headquarters by December 2000.
        7. I maintained the importance of Dr. Sweeney's contributions to
    the study by retaining him as an advisor to the economics panel. At no
    time did I direct a demotion or reduction of grade of Dr. Sweeney, and
    he has not been demoted. He is and remains a GS-13 senior regional
    economist with the St. Louis District.
        8. With regard to question 14 of Senator Voinovich's letter,
    Colonel Mudd did not disband the June 1998 ad hoc economics panel. I
    determined that since the ad hoc economics panel had completed its
    function in July of 1999, it was time to release the members so that
    they could return full time to their normal duties as District-level
    economic staff chiefs. I still retained a high graded economist, the
    GS-14 New Orleans District Chief of Economics Branch, Rich Manguno, to
    lead the remaining efforts of the economic work group.
        9. All of my actions described above were for the purposes of
    meeting schedule deadlines and ensuring that sound analyses, data and
    modeling were being produced so that we would have the best draft
    feasibility UMRS report and environmental impact statement for release
    for public review and comment in June 2000.

        Phillip R. Anderson, Major General, U.S. Army Division
                                                      Engineer.

                Subscribed and sworn to before me in the District of
                Columbia on this 2nd day of March, 2000.

                                              Barbara J. Davis,
                                    Notary Public District of Columbia,
                                   My Commission Expires June 14, 2001.
                                     ______

                                  attachment 1
                                                    Arnold, William MVD
    From: Phillip Anderson
    Sent: Thursday, April 16, 1998 8:41 AM
    To: X400, Russell--Fuhrman, CECW-ZA
    Cc: HERNDOND; RHODESG; CALDWELL; X400.Hans--Vanwinkle--CELRD-DE
    Subject: Upper Ms Nav Study
        Russ, Met with subject study team yesterday as we discussed.
    Directed that scheduled 23 Apr meeting with the Governor's Liaison
    Committee in St. Louis be postponed and rescheduled at a time to be
    determined. This is a public meeting so we're working hard to get the
    word out to other likely participants.
        Canceled this GLC meeting for the following reasons:
        --HQS USACE has not yet been briefed on the prelim results. Thatch
    now scheduled for Thursday afternoon next week at FLW. Will fly in the
    SMEs using the MVD G1 and fly them out afterwards. Brian Sullivan, I'm
    told is working on a meeting location for us.
        --Major differences between the special equilibrium-model we're
    using and the one being used by LRD for their lock and dam
    improvements. Our model generates significantly less benefits. This
    could have significant Corps wide implications and we need to speak
    with one voice.
        --Significant economic and environmental data missing which are
    necessary for decision making.
        --Have not quantified the costs associated with avoiding and
    minimizing adverse environmental impacts.
        --Need to do a hazard analysis of some of the suggested industry
    self-help small scale improvements. This analysis might warrant
    construction of guide wall extensions and other safety measures.
        During my brief yesterday, there were probably 25 Corps employees
    present and no one advocated that we continue with the GLC as scheduled
    so confident that we're doing the right thing. Will be signing a letter
    today which factually explains this situation and we will get you a
    copy. See you next week. Essayons, Phil.
                                     ______

                                  attachment 2
                                               Executive Office
                                                         April 16, 1998
    DEAR GOVERNORS' LIAISON COMMITTEE MEMBER:
        For reasons outlined below, I think that it is best to postpone the
    meeting of the Governors' Liaison Committee (GLC) scheduled for April
    23, 1998, in St. Louis. The next meeting will be the regularly
    scheduled meeting on May 12, 1998, in St. Paul. I apologize for the
    short notice, but I believe, after a thorough briefing by my District
    Engineers and their staffs, that this is the best decision considering
    study progress to date. We are giving this cancellation the widest
    possible dissemination including sending a notice to our newsletter
    mailing list, posting it on our web site, and adding it to our toll
    free number. I also ask that you help us in informing others in your
    state who may have planned to come to the meeting.
        A significant number of study components are behind schedule. This
    will likely affect our schedule for public meetings this summer, the
    schedule for future GLC meetings, as well as possibly the overall study
    completion date. However, I want to assure you that you and your staffs
    will be given ample opportunity to fully review study products and
    provide input to the plan formulation process as we have previously
    planned. In fact, one reason we are reevaluating the schedule is to not
    short-cut any of the planned coordination.
        For clarification, most of the following key study elements are
    nearing completion but are behind schedule and are critical to the
    development of the preliminary National Economic Development(NED) plan
    and future plan formulation activities:
        --Technical review of engineering studies that quantify cost and
    performance data for large and small-scale measures.
        --Technical review of economic products including modal-shift
    analysis, the equilibrium model, and the optimization model.
        --Outputs of economic models (traffic projections) for various
    alternatives needed for input to environmental models.
        --Completion and technical review of several of the environmental
    models needed for quantification of system environmental effects, data
    from which will be used to develop mitigation or avoid and minimize
    measures.
        As we have stated on numerous occasions, the original schedule was
    optimistic and envisioned a concurrent quality control process that
    allowed for a smooth transition between model development and model
    application However, development of these system tools, many which are
    state-of-the-art, and the applicable quality control have been more
    difficult and time consuming than originally anticipated.
        It is my responsibility to assure that the Corps produces
    creditable, professional analyses to support our planning effort. Some
    schedule change is necessary to complete our technical review which
    will assure adequacy of all data prior to alternative evaluation.
    Therefore, after carefully reviewing all these considerations, I think
    that it is better to allow additional time in the schedule to more
    fully develop data, assure its accuracy, and allow adequate time for
    public and agency input than to adhere to the original plan of action.
        As discussed, we will hold the GLC meeting scheduled on May 12,
    1998, at the St. Paul Radisson Hotel as planned. The meeting is
    scheduled to begin at 1:00 p.m. and will be used to provide you a
    status report and discuss the overall study schedule. Although we will
    not be prepared at that meeting to present the NED plan, we have made
    progress in several areas of the study on which we will provide you a
    report. This will be very useful information as we move into the plan
    formulation process later this year.
        My point of contact for this action is Mr. George H. Rhodes, Jr.,
    (601) 634-5762.
                Sincerely,

         Phillip R. Anderson Major General, U.S. Army Division
                                                      Engineer.
                                     ______

                                  attachment 3
                                                     CEMVD-ET-P
                                                           17 June 1998
    MEMORANDUM FOR

        Commander, Rock Island District
        Commander, St. Louis District
        Commander, New Orlean District

    SUBJECT: Upper Mississippi Navigation Study

        1. I have become concerned with the rate of progress in key areas
    of the subject study during the past several months. This study is a
    high priority for the Mississippi Valley Division, the Corps of
    Engineers, and I believe, for the nation. One of the very key elements
    of the study I have continued to focus on is the economic analyisis--
    both the conceptual framework and the analytical tools that execute the
    concept into Quantified outputs. Because of my concerns regarding the
    progress of the study and the need for revolutionary changes in our
    management of this study and after consultations with the Director of
    Civil Works, I have made the following decisions:
        a. Mr. Dudley Hanson, Rock Island District, will be appointed the
    project manager For the subject study as his sole responsibility to the
    exclusion of his normal activities. This level of management attention
    is warranted until at least the development of the draft plan and
    possibly through the subsequent public review.
        b. I am creating a panel comprised of the Chiefs of Economics in
    the Rock Island, St. Louis, and New Orleane Districts and an
    appropriate representative from the Navigation Studies Center in LRD.
    The purpose of this panel is to provide economic analysis products
    required for further progress on the subject study. Dr. Don Sweeney,
    St. Louis District, will serve in an advisory capacity to the group.
    The panel will report directly to Mr. Hanson who may appoint other
    personnel to provide administrative and support assistance as prudent
    and necessary.
        c. The panel will be responsible for identification of the NED plan
    and For producing economic analysis tools sufficient to analyze
    additional alternatives, all to be completed within 90 days of
    beginning of work. A detailed plan for the 90-day effort, which will
    include an in-progress review on or about day 70 to be attended by the
    EQ, will be provided to this office not later than clove of business 22
    June 1999.
        2. Each respective District Commander is to ensure that the panel
    leader and members are assigned to this purpose as their highest
    priority activity and are available throughout the duration of the 90-
    day effort. I will separately transmit a request to the LRD Division
    Commander seeking the assignment of an appropriate member to the panel
    from LAX-NC. Funds will be reprogrammed from existing project funds by
    the Rock Island District and provided to the panel members for their
    costs associated with this purpose.
        3. My point of contact for this action is Mr. Dusty Rhodes, (601)
    634-5762.

             Phillip R. Anderson Major General, USA Commanding.

                CF: MG Russell Furman, HQUSACE (CECW-ZA)
                                     ______

                                  attachment 4
                                                     CEMVD-ET-P
                                                           17 June 1998

    MEMORANDUM FOR

        BG Hans A. van Winkle, Commander, U.S. Army Engineer Division,
    Great Lakes and Ohio River, P.O. Box 1159, Cincinnati, OH 45201-1159

    SUBJECT: Upper Mississippi Navigation Study

        1. I have become concerned with the rate of progress in key areas
    of the subject study during the past several months. This study is a
    high priority for the Mississippi Valley Division, the Corps of
    Engineers, and I believe, for the nation. One of the very key elements
    of the study I have continued to focus on is the economic analysis--
    both the conceptual framework and the analytical tool'' that execute
    the concept into quantified outputs. Because of my concerns regarding
    the progress of the tudy and the need for revolutionary changes in our
    management of this study and after consultations with the Director of
    Civil Works, I have made the following decisions:

        a. Mr Dudley Hanson, Rock Island District, will be appointed the
    project manager for the subject study as his sole responsibility to the
    exclusion of his normal activities. This level of management attention
    is warranted until at least the development of the draft plan and
    possibly through the subsequent public review.
        b. I am creating a panel comprised of the Chiefs of Economics in
    the Rock Island, St. Louis, and Hew Orleans Districts and would like to
    include an appropriate representative from the Navigation Studies
    Center in LED. The purpose of this panel is to provide economic
    analysis products required for further progress on the subject study
    Dr. Don Sweeney, St Louis District, will serve in an advisory capacity
    to the group. The panel will report directly to Mr. Hanson who may
    appoint other personnel to provide administrative and support
    assistance as prudent and necessary.
        c. The panel will be responsible for identification of the NED plan
    and for producing economic analysis tools sufficient to analyze
    additional alternatives, all to be completed within so days of
    beginning of work. A detailed plan for the 90-day effort, which will
    include an in-progress review on or about day 70 to he attended by the
    EQ, will be provided to this office not later than close of business 22
    June 1998.
        2. I am directing my appropriate District Commanders to ensure that
    the panel leader and members are assigned to this purpose as their
    highest priority activity and are available throughout the duration of
    the So-day effort. I am hereby requesting the assignment of an
    appropriate member to the panel from LRH-NC, with the Same terms of
    highest priority availability. I believe that if we work together on
    this project we may avoid the perception of incompatibility with our
    respective navigation system studies. Specifically, I request that Mr.
    Wes Walker be assigned to this role. We will, of course, reimburse the
    Huntington District for any expenses incurred by your designee.
        3. I appreciate your personal involvement with this matter, and I
    am certainly available to discuss this with you if you need more
    information.
        4. My point of contact for this action is Mr. Dusty Rhodes, (501)
    634-5762.

              Philip R. Anderson Major General, USA Commanding.
                                   __________
                                     TAB B
      before the united states senate committee on environment and public
                    works affidavit of thomas f. caver, jr.
        Pursuant to 28 U.S.C. 1746, the undersigned hereby executes the
    following sworn statement under penalty of perjury.
        1. I, Thomas F. Caver, Jr. do hereby declare that I am an employee
    of the U.S. Army Corps of Engineers, and currently serve as the Chief,
    Programs Management Division in the Directorate of Civil Works,
    Headquarters, U.S. Army Corps of Engineers.
        The Committee's question 2 which relates to a February 4, 2000 memo
    which contains the statement ``concern was expressed that if we don't
    provide for the industry, navigation program might get moved to''
    Department of Transportation. During the meeting in which this
    statement was made, there was a discussion of the Corps' mission
    responsibility to broadly assess the long-term navigation needs of the
    Nation, applying a visionary approach to the assessments and subsequent
    recommendations, to include the concerns of all interested
    stakeholders. I interpreted this statement as one of self-criticism
    that the Corps has a tendency to formulate projects in a narrow sense,
    and if we were unable to fulfill the broad mission responsibility, the
    Nation would find others, with DoT used as an example, to fill that
    need.
        3. With respect to question 3 concerning a ``slide show
    presentation,'' the slide show referred to by the Washington Post
    consists of thirteen briefing charts used to engage the Chief of
    Engineers, the eight Division Commanders and other members of the Corps
    Board of Directors in a discussion of water resource problems across
    the Nation and how the Corps could better fulfill its mission of
    assessing and meeting the demands. At the Corps of Engineers Senior
    Leadership Conference in San Francisco in August 1999, the Assistant
    Secretary of the Army for Civil Works made remarks that focused on the
    unmet needs in water resources in this nation and challenged the Corps
    to take a longer term view. The Secretary's remarks stimulated
    reflection by the Corps on the magnitude of water resources needs
    facing the Nation. Work was initiated to quantify the needs and assess
    the ability of the Corps to satisfy the needs. This discussion
    represented an inprogress review on the effort for the purpose of
    determining whether it was proceeding in an effective manner and to
    receive guidance from the Chief and the BOD in proceeding from that
    point. The presentation outlined the initial findings on ``needs''.
    Some of the needs identified were:

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Backlog of Maintenance.......  $1.6 Billion
    Average Annual Flood Damages.  $4.0 Billion
    Navigation Tonnages..........  Double by 2020
    Lock Chambers................  9% over 50 years old
    Wetlands Loss................  53% of acreage in Lower 48 States--an
                                    area larger than the State of
                                    California--117 Million acres
    Water Supply.................  Many Areas of droughts and competing uses
    Existing Infrastructure......  Value of Corps maintained Infrastructure
                                    declined $25 Billion since 1981 to
                                    present value of $125 Billion.
    ------------------------------------------------------------------------

        4. The presentation also included a graph that depicted the Civil
    Works Capital Investment over the period 1929 to 2000 in constant 1999
    dollars. The graph showed that capital investment had increased (with
    dips during WWII and Korea) to a high of $5 Billion per year in 1966
    and started to drop precipitously about 1980 to the present level of
    less than $2 billion per year. The presentation went on to discuss the
    ability of today's Corps of Engineers to respond to the challenge of
    satisfying the identified needs.
        5. The ``impediments to growth'' summarized on the briefing slide
    referred specifically to the Corps' inability in its current condition
    to be responsive to these national water resources challenges and to
    challenge the organization to think broadly outside of its day-to-day
    business. Seven specific areas of concern were identified as follows:
         Principles and Guidelines (P&G)--this refers to the
    guidance that all Federal water resources agencies follow in
    formulating solutions to water resources problems. In a review of the
    Corps' planning process recently completed by the National Academy of
    Sciences (NAS), the NAS commented that these guidelines are outdated
    and do not reflect today's principles and practices and values. For
    example, the P&G don't give sufficient weight to environmental and
    social benefits and don't allow proper consideration of non-structural
    flood control solutions. The NAS report suggested that P&G should be
    updated.
         Cost Sharing--while general cost sharing as legislated in
    the Water Resources Development Act of 1986 and elsewhere has brought
    tremendous discipline arid structure to individual project development,
    it has also had the unintended consequence of severely narrowing the
    scope of water resource problem solving, especially during the planning
    process. Water resources issues involve many different stakeholders and
    cross political boundaries. If the Corps is to be effective in dealing
    with these issues, it needs a way to address the matters in a
    comprehensive, basin-wide approach. This suggests that, to a limited
    degree, study cost sharing should be reconsidered.
         Loss of Congressional relationships--a fact of life is
    that the Congress faces a broader array of issues and challenges these
    days than in the past and has more competing constituencies; therefore,
    it's more difficult to raise issues associated with water resources to
    the fore. In general, the Corps has not awakened to this fact. The
    discussion point was intended to make the organization aware of this.
         Changes in Committee Control--as has been widely discussed
    of late, the manner in which the Congress conducts its business is also
    changing. Again, the intent was to make leaders in the Corps aware of
    this.
         Civil Works Business Process--the Corps' process has grown
    to become bureaucratic and cumbersome. The assertion here is that the
    organization must become more flexible and responsive to be of service
    in the future. The House of Representatives recognized this in its
    report on fiscal year 2000 appropriations and required the Corps to
    report to the Congress on ways of streamlining its business process.
         Loss of capability to build within the Corps--because of
    internal organizational culture and outside direction, the Corps has
    chosen over the past twenty or so years not to stimulate any
    significant National discussion of broad water resources problems. As a
    result, the organization doesn't even know how to do this at a time
    when national needs are great and long-term impacts are potentially
    significant. The intent here was to highlight this fact as a first step
    in dealing with it. Relationship within the Executive Branch--
    similarly, the Corps hasn't been effective Ln championing national
    water resources needs within the Administration. Among other reasons,
    this has led to less emphasis on water resources in Administration
    initiatives and priorities.
        6. The ``specifically targeted communications plan'' actually
    appeared on a slide following the ``impediments'' slide in the
    presentation and referred to the need to inform the complete array of
    interested stakeholders of the national problems and challenges.
    Further, the message was that the Corps isn't very good at
    communications and that effective communications must be tailored to
    the audience so the message is understandable. The Corps has a tendency
    to incorrectly assume its mostly ``technical'' messages ( and the
    implications from them) are readily understood by all.
        7. The slide show, and the discussion it was designed to generate,
    was an early part of the process of developing an annual and outyear
    program and budget for the Civil Works program. This is done initially
    as an exercise internal to the Corps of Engineers and is a preliminary
    deliberative process of proposing and examining options ultimately
    leading to specific recommendations to the Assistant Secretary of the
    Army for Civil Works. Corps recommendations are then subjected to a
    series of reviews at the Army and Of lice of Management and Budget
    levels before decisions are finally reached on specific program and
    budget provisions to be included in the President's budget for
    submission to the Congress. I declare under penalty of perjury under
    the laws of the United States of America that the foregoing statement
    is true and correct to the best of my knowledge.

                                           Thomas F. Caver, Jr.

                Subscribed and Sworn to Before me in the District of
                Columbia, on this 3rd Day of March, 2000.

                                              Barbara J. Davis,
                                                         Notary Public,
                                  My Commission Expires: June 14, 2001.
                                     ______

                                     TAB C
      before the united states senate committee on environment and public
                     works affidavit of russell l. fuhrman
        Pursuant to 28 U.S.C. 1746, the undersigned hereby executes the
    following sworn statement under penalty of perjury.
        1. I, Russell L. Fuhrman do hereby declare that I am a Major
    General in the U.S. Army and am currently serving as the Deputy
    Commander, U.S. Army Corps of Engineers.
        2. I want to state from the outset that I did not, at any time,
    direct anyone to skew or falsify data or the economic analysis in the
    Upper Mississippi River Study. In fact, as stated, below, the purpose
    of my involvement was, and is, to insure that appropriate and adequate
    models, data, and assumptions are used in the economic analysis which
    supports the Study. I never called for preordained results; just the
    opposite, I insisted that we bring in the best experts from around the
    Corps to address all issues associated with the Upper Mississippi River
    Study so that the Study could withstand the scrutiny of all interest
    groups, the Administration and Congress. The product we had 18 months
    ago would not have withstood that scrutiny.
        3. Before I elaborate upon my involvement in the Upper Mississippi
    River Study, I want to respond directly to the Committee on Environment
    and Public Works' question Number 10 concerning the Washington Post's
    story quoting a 25 September email from Mr. Dudley M. Hanson relaying
    his (Mr. Hanson's) perception of my instructions to a ``panel.'' To
    clarify the record there was no panel. Two meetings, approximately one
    month apart, were conducted as ``in progress reviews'' (IPRs) of the
    Study. They involved a significant amount of interchange between
    technical experts from my Headquarters, the Division and District
    Staffs which is not reflected in Mr. Hanson's email, but which I will
    address in more detail below. Moreover, until recently I was unaware of
    the Hanson email. I would point out, however, that a contemporaneously
    executed email of 25 September 1998 from Harry Kitch of my staff to Mr.
    Hanson informed him that the quotations, referred to in question 10,
    and perceptions described in his (Mr. Hanson's) email were inaccurate.
    The Kitch email is enclosed for your review. It presents a position
    consistent with my recollection of what took place during the IPR.
        4. With regard to question 11 on advocacy, I do not know what Mr.
    Hanson means by advocacy, but my view of advocacy is as follows. The
    Corps of Engineers is the advocate for water resource development and
    conservation activities to include flood control, hydropower,
    navigation, environment, recreation and the like. In my view, the
    Corps' role is similar to the advocacy role the Department of
    Transportation plays for air and surface transportation and the
    advocacy role Department of Agriculture plays for agricultural
    interests. As water resource advocates it is our mission to assess the
    nations needs/requirements and present those to the Administration and
    Congress for their decision on setting national priorities and resource
    allocations.
        5. Getting back to the Study, in late August or early September of
    1998 my staff received several calls from agricultural interests and
    navigation interests on the Upper Mississippi challenging the
    preliminary data the District was about to release to the Governors
    oversight group on the Upper Mississippi River Study. In the same time
    frame, Brian Burke (Deputy Assistant Secretary of the Army for Civil
    Works Office) and I were at a meeting with Mike Dunn (Department of
    Agriculture) when he raised Department of Agriculture's concern with
    the preliminary data coming out of the Upper Mississippi River Study.
    He wanted to ensure our data adequately reflected the potential for
    grain export in the region and the importance of ensuring we have the
    required capacity on our inland waterways system so the farmers could
    be competitive in the world market in the 21st century. I was informed
    by Major General Phillip R. Anderson (Commander, Mississippi Valley
    Division) that he had also been receiving a number of calls from
    interests groups on the same subject. Concerns raised by the interests
    groups were: (1) Why was the Corps using a different (new) model which
    was supposedly untested? Why were we not using the Huntington model
    which had been used on our previous lock and dam studies? What was the
    difference between the two models? (2) Demand curves for commodities--
    The interest groups contended we were using the wrong demand curves and
    we were using different demand curves on the Ohio than on the Upper
    Mississippi. (3) Projections--The interest groups contended the
    Districts traffic projections and Agriculture production projections
    did not agree with theirs. They contended they had an independent group
    study the issues and were coming up with much larger projections. (4)
    Assumptions--The interest groups contended the District was using
    inaccurate assumptions and different assumptions than we were using on
    the Ohio River in our Studies.
        6. This was the first time that I became aware that we had
    developed a new model for this Study and were not using the standard
    model we had used on the Ohio River for years. asked my staff why there
    were two models and no one had an answer, nor could any one on my or
    the Division staff explain, at the time, the differences between the
    two models or how they would react to the same or different inputs. In
    addition the concerns raised by the Department of Agriculture and the
    interests groups needed to be addressed. The recommendation of my staff
    and MG Anderson' staff was we conduct an ``in progress review'' (IPR)
    to determine exactly where we were and how confident we were in our
    preliminary data before we allowed the District to release any
    information to the Governors. At that time, we were still in the early
    study phase leading to a draft report with multiple agency and public
    reviews to follow, but to me it was absolutely key that we resolve any
    differences in the models, demand curves, projections, and assumptions
    raised by the interests groups. I wanted the technical experts on the
    Division staff and my staff to be comfortable that the District's work
    was ready for public review from all interest groups. MG Anderson
    agreed with me and he brought his staff to Washington on 23 September
    1998 for the first of two IPR meetings.
        7. Since the meetings occurred 17 months ago, I can't recall all of
    the details, but I do remember the important facts. I started our
    meeting telling the group this was an important study. The Nation had
    invested $50 million dollars in the study and the purpose of the study
    was to determine what navigation capacity was needed in the Upper
    Mississippi in the next 20- 50 years. The Corps needs to use its best
    experts and the best models and information available throughout the
    Corps and the Nation. Our work had to withstand the scrutiny of all
    interest groups. In the end, the economic well being of the region 20-
    30 years from now could well be dependent on the results of our study.
    I use the term ``advocacy'' to describe this role. We are the agency
    responsible for insuring water resource issues are appropriately
    represented to the Administration and Congress just as the Department
    of Transportation insures surface and air transportation issues are
    appropriately represented to the Administration and Congress. After my
    introduction, the District briefed where they were in the study and
    tried to address the issues outlined above. We had lots of discussion
    between technical experts on my staff, the Division and District
    staffs. The bottomline to come out of this first meeting was the
    District did not know the differences between the models nor did it
    know the sensitivity of either model to assumptions, projections,
    demand curves, etc. The District was unable to answer the challenges
    put forth by the interested groups cited above. In addition the
    District had not done a good job of taking into account environmental
    mitigation costs. I directed that they include these in the overall
    costs. Part of the problem was that the experts capable of addressing
    the issues needed time to sort through the issues. It was determined it
    would take the Division about a month to sort through the issues and
    determine which ones needed further study and which ones the District
    already had enough information. We also decided that we needed to bring
    in our best experts from around the Corps to assist the District and
    Division so we had the best study the Corps could produce, not the best
    study the District could produce. The first order of business was to
    set up a taskforce to look at the two models and determine the
    differences between the two, if any. At the same time the Division
    needed to address the other issues raised by the interest groups to
    insure we could adequately answer them. About a month later the
    Division came back and laid out a plan to address the issues described
    above and requested a dollar and time extension which I approved. This
    was essentially my last contact with the Study. A few months later I
    left as the Director of Civil Works to become Deputy Commanding General
    of the United States Army Corps of Engineers.
        I declare under penalty of perjury under the laws of the United
    States of America that the foregoing statement is true and correct to
    the best of my knowledge.

           Russell L. Fuhrman, Major General, U.S. Army Deputy
                                                    Commander,.

                Subscribed and Sworn To Before me in the District of
                Columbia, on this 3rd Day of March, 2000.

                                              Barbara J. Davis,
                                                         Notary Public,
                                  My Commission Expires: June 14, 2001.
                                     ______

                                     TAB D
              affidavit, state of illinois, county of rock island
        I, Dudley M. Hanson, was Deputy for Programs and Project Management
    of the Rock Island District of the U.S. Army Corps of Engineers until
    October of 1999. I also was Project Manager for the Upper Mississippi
    River-Illinois Waterway System Navigation Study from April 1998 to
    December 1998. Relative to Questions No. 5 and 11 in the February 28,
    2000 letter from Senator Voinovich to LTG Ballard, I hereby depose and
    say:
        In reference to Question No. 5, I was the Project Manager for the
    study in September 1998 and used the term ``other ways'' in relating
    guidance from MG Fuhrman. The reference to ``other ways'' relates to
    identifying other considerations, some of which may not be
    quantifiable, which are relevant to the navigation study in addition to
    the traditional National Economic Development (NED) account benefits
    that a Corps analysis must include. These considerations were
    documented and discussed at the November 18, 1998 Governor's Liaison
    Committee meeting. The other items include the Congressionally
    recognized National significance of the Upper Mississippi River
    ecosystem and commercial navigation system, critical economic role of
    the river in the national economy, national interest in maintaining a
    competitive posture in agricultural exports and balance of trade, and
    the importance of providing adequate transportation infrastructure for
    the 21st Century. In addition, uncertainties related to some items were
    identified for presentation and potential discussion in the project
    report, including factors such as future demand, potential for changes
    in policy (e.g. ethanol subsidies), future rail rates, crop yields, and
    environmental considerations. In accordance with the Corps Principles
    and Guidelines, factors such as those listed above are to be considered
    in developing a recommended plan. It is noted that several of these
    concerns were included in Sec 139 of WRDA 99, which directed the Corps
    to proceed with preliminary engineering and design of 1,200 foot locks.
        With regard to Question No. 11, the term ``overt advocacy role''
    was in reference to MG Fuhrman's public statements that the Corps is
    viewed by many as the advocate for inland navigation, similar to how
    the US Dept of Transportation is the advocate for highways. As such,
    the Corps has the responsibility to look to the future and determine
    the needs for the inland waterway system. The Corps owes to the
    decision-makers in Congress the full range of alternatives and
    sensitivity analyses so that the best decisions can be made.
    Considerations regarding the national economy, competitive posture in
    agricultural exports and balance of trade and the impact on the
    environment must be taken into account as the Corps recommends measures
    that will provide adequate transportation infrastructure for the 21st
    Century.
        As used in the referenced memo, the term ``story line'' is
    synonymous with ``scenario''. It was used specifically to ensure that
    the planning team, particularly the economics team, had not failed to
    consider any possible futures that would result in greater demand for
    waterborne commerce. Some of the building blocks of such possible
    futures could be such things as these:

        1. Elimination of the ethanol subsidy to corn, which could free up
    hundreds of millions of bushels of corn for export;
        2. Decommissioning of nuclear power plants, which could greatly
    increase the demand for waterborne coal for fossil-fueled power plants;
        3. Transition from internal combustion engines to electric vehicles
    for surface transportation, which could increase electrical generation
    demand, and increased waterborne shipment of coal;

        In witness whereof, I have set my hand this 2nd day of March 2000.

                                              Dudley M. Hanson,

                Subscribed and sworn to the undersigned, a notary public,
                in and for the State of Illinois, County of Rock Island,
                this 2nd day of March 2000.

                                             Robert F. Lazenby,
                                      Notary Public, State of Illinois,
                                       My Commission Expires 4-17-2002.
                                     ______

                                     TAB E
        I, Bobby R. Hughey, being duly sworn under oath and of legal age,
    and under no legal disability, do hereby state that the following is a
    true statement of facts according to my best recollection and
    knowledge.
        In response to the question ``Did the study update change the date
    of renovations from 2033 to 2015, and if so, on what basis?''
        Yes. The preliminary results of the economic analysis for the
    reliability studies were discussed at an Economic Coordinating
    Committee on 11-12 May 1998. This discussion included a summary of the
    methodology being used and the preliminary results of the analysis,
    which showed no major rehabilitation needed until 35-40 years out in
    the future. This preliminary work was documented in a draft report
    dated June 1998. This preliminary analysis was a work in progress and
    had not been reviewed by the study team or ready for an Independent
    Technical Review. Subsequent reviews by the study team indicated some
    problems with the analysis. A second draft report was completed and
    distributed to the study team for review in April 1999. The results of
    this second report indicated that no rehabilitation would be justified
    in the next 50 years. The analysis indicated that failures will occur
    and repairs needed, however they would not be justified under current
    definitions and methodologies. The engineering work group seriously
    questioned the results of this report. This report is under going
    internal review by the study team and is not yet ready for an
    Independent Technical Review.
        In the fall of 1997, an additional effort was undertaken to reduce
    the cost of construction for the lock extension alternative. This work
    was documented in the, the Interim Revised Lock Extension Design
    Concept Report published in March 1998. In the spring of 1999, in
    response to an additional preliminary economic analysis, the costs
    presented in this report were reevaluated. It was identified at this
    time that some components listed were items that would be replaced or
    repaired as part of any future without rehabilitation. An analysis was
    undertaken at that time to determine whether double counting was
    occurring for these components. The estimate contained in the
    referenced report included costs for miter gates, guidewall, some lock
    chamber concrete and metals, and operating machinery, culvert valves
    and operating machinery, power and lighting systems, mob/demote and
    preparatory work, care and diversion of chamber water. Significant
    portions of these cost factors were also contained in the cost
    estimates for the scheduled rehabilitation in the without project
    condition.
        Schedules for major rehabilitation in the future were developed
    utilizing a 25-year expected extended life parameter. The site-specific
    future schedule for rehabilitations was established by adding 25 years
    from the last completed rehabilitation. For example lock 22 was last
    rehabilitated in 1990. The next rehabilitation is projected to occur in
    2015. It was determined that if a lock extension project occurred close
    in time to the completion of a rehabilitation project, that the
    scheduled rehabilitation would not take place and these scheduled
    investments could be avoided. This results in the delaying or avoidance
    of a cycle of major rehabilitation in the 2015-2020 period and
    associated costs. This information was used in subsequent evaluations
    of the economic analysis.
        It should be understood that development of the Future Without
    Project Investment is still a work in progress and many significant
    portions of the analysis need to be completed and reviewed.

        In response to the question ``Did the study update cut the
    contingency factor from 35 percent to 25 percent, and if so, on what
    basis?
        Yes. The Upper Mississippi River-Illinois Waterway System
    Navigation Study has explored cost reductions for lock construction
    since completion of the Reconnaissance Report in 1991. The initial
    estimates in this report were produced with minimal site-specific
    engineering. Cost estimates were prepared utilizing traditional
    construction practices and totaled approximately $380 million per site.
        In 1996, the Lock Concept Design Report was produced as a sub-
    product of the Engineering Appendix to the systems feasibility study.
    This report utilized preliminary site specific engineering for 2
    representative sites (Locks 22 and 25) on the UMR. Innovative lock
    design and construction techniques were used to reduce cost estimates
    reported in the reconnaissance report. For the representative site at
    Lock 25, the least cost alternative for new lock construction involved
    extending the existing lock by 600 ft. at a cost of $160 million. The
    estimates contained in this report included 25% contingency. ER 1110-2-
    1302 provides guidance that suggests contingency values of 20% for
    feasibility level projects in excess of $10 million. An additional 5%
    was added because only preliminary site-specific engineering has been
    completed. During the ITR conducted in Aug 97 a comment was received
    that stated:
        ``Contingencies at this level of detail, especially considering
    innovative techniques, should possibly have a higher contingency than
    25% to reflect the uncertainties involved. At this conceptual stage,
    25% would appear more normal for conventional type construction and a
    minimum of 35% for innovative. ``
        This comment was accepted and 35% adopted as a contingency factor
    due to the risks and uncertainties associated with innovative lock
    design and construction.
        In Jan. 1998, an additional effort was undertaken to reduce the
    cost of construction for a lock extension. The Interim Revised Lock
    Extension Design Concept Report was published in March 1998, and
    focused on reducing delays to navigation during construction and
    reusing more of the existing structure. The cost estimate for extending
    Lock 25 was reduced to $135 million with 35% contingencies. This
    document is scheduled to be included in the final Engineering Appendix.
        In the spring of 1999, in response to an additional preliminary
    economic analysis, the contingencies were reevaluated for the lock
    extension costs. This along with other factors helped reduced the lock
    extension construction cost for Lock 25 to $120 million. The
    contingency factor was reduced to 25% for the following reasons:
        a. A review of the Interim Revised Lock Extension Design Concept
    Report indicated that the majority of construction for the lock
    extension concept included traditional construction techniques. The
    innovative construction techniques were essentially limited to the
    float-in gate bay monolith and filling and emptying system. Reducing
    contingencies to match the factor of 20% recommended in ER 1 1 10-2-
    1302 was discussed, but rejected since only preliminary site-specific
    engineering had been completed for these sites.
        b. The Corps has continued to push the state-of-the-art in
    innovative lock design and construction techniques. Since this was
    first evaluated in the 1996 Lock Concept Design Report, the Corps has
    completed additional research as part of the Innovative Navigation
    Program. In addition, some of these techniques are currently being
    utilized in the design and construction of projects on the Ohio River
    system. Actual contractor unit bid costs have been used to validate the
    unit costs applied to the UMR study for similar type designs and
    construction.
        c. All construction costs have been reviewed on a continuous basis
    to ensure that they reflect the latest in contractor unit costs
    obtained from other corps navigation projects. The latest review was
    accomplished in the Nov/Dec 1999 period.

        In response to the question ``Was the assumption on the use of
    self-help reduced, and if so, on what basis?
        Yes. History of Investigations: The universe of potential small-
    scale measures was identified in the General Assessment of Small-Scale
    Measures report (June 1995). Sixteen of the measures, including
    industry self help (ISH), were carried forward for more detailed
    examination and quantification of benefits as part of the Detailed
    Assessment of Small Scale Measures Report (December 1998). Industry
    self help is the practice where industry tows assist each other by
    extracting unpowered cuts from the lock without the assistance of lock
    personnel or equipment. The primary time savings results from allowing
    tow remake outside the lock, which makes it available for a quicker
    turnaround. This measure is currently utilized for approximately 1-1.5%
    of all lockages at the busiest locks on the system.
        Additional coordination with the navigation industry, U.S. Maritime
    Administration, and U.S. Coast Guard in 1998 indicated that regular use
    of ISH is not practical due to the variability in conditions where it
    can be implemented safely. The general industry comment was that ISH is
    a stop gap measure that is used to minimize the impacts of a breakdown
    on the system, not a routine, long term measure to address increasing
    system traffic and delay. In addition environmental and social impacts
    were identified related to bankline damage and sensitive shoreline
    areas. It was determined that additional facilities would be required
    to minimize environmental impacts of increased use of ISH. In July
    1998, a lockmaster expert panel was convened, to gather data on current
    use and their expectations for future usage. Through lock data
    collection and the meeting, it was verified that currently industry
    self help is only used on a very limited basis. In addition, due to a
    number of site-specific factors, this usage is not likely to increase
    significantly unless additional facilities are provided (guidewall
    extensions or remote remake). It was also determined that current use
    is limited to periods where queues grow to approximately 10-12 boats
    waiting at the lock, creating sufficient delays to warrant the risk of
    these operations.
        The ISH measure can be placed in the without or with project
    condition depending on whether or not a Federal action is taken
    (additional facilities provided). The with-project condition for this
    system study was defined to include all small-scale measures
    potentially implemented on a system basis by a Federal action for
    system efficiency reasons. This resulted in the only measures falling
    in the without project being measures which do not provide significant
    system efficiencies or require Federal actions.
        In January 1999, the study team decided that without project
    economic model runs should limit the use of ISH to no more than 5
    percent of the total commercial lockages. This was in addition to the
    previous limitation to only apply self help in situations were large
    queues of 10-12 boats were present. The rationale for this decision is
    as follows.

          Lock statistics from 1992-1998 showed actual usage of
    selihelp was limited to 1-1.5 percent, and only Locks 24 and 25 had
    achieved significant time savings historically. At these sites the
    highest usage was in 1992 at Lock 25 at 3.6 percent. The 5 percent rule
    allows some increase over current usage, while remaining close to
    observed rates.
          Despite the presence of considerable delay at times, ISH
    has not been used as a regular operation to lock tows at multiple sites
    for system efficiency reasons. Current usage is typically limited to
    clearing a bottleneck following a lock closure or delay at a single
    site. Even in these events its use is driven by economics of the
    situation and willingness of the tow boat operators to assume risk
    (e.g. large queues of 10-20 boats, grouping of tows N-up/N-down, safe
    operating conditions, etc.).
          ISH requires competing tow companies to pull each other's
    barges with uncertainty regarding assumption of risk and liability.
          Increased use of ISH in the without project raises
    concerns over impacts to environmental and social resources around
    remake areas.
          High use of ISH in the without project condition, without
    the addition of Federal facilities to reduce environmental and social
    impacts is not likely and foreseeable.

        As a result of environmental and social concerns, unlimited use of
    ISH without Federal protective actions being taken is not likely and
    foreseeable. Instead if use were to grow significantly, facilities
    (guidewall extensions or remote remake areas) would have to be provided
    to mitigate impacts at remake or waiting areas. This would then trigger
    a Federal Action to address the resource concerns (construction of
    remote remake facilities or guidewall extensions), and under the
    study's definition would be considered a with project action. Corps
    operations and engineering staff had previously determined that ISH
    with remote remake facilities would not be provided as a federal action
    for regular use due to risk, safety, high variability in achieving time
    savings, implementability, dependability/reliability, increased
    maintenance needs, and river congestion issues. In addition, ISH with
    guidewall extensions was screened out based the fact that it is out
    preformed at a similar cost by powered Levels with guidewall
    extensions. On the surface, ISH appears to provide significant benefits
    to reduce congestion. However, considering the variables involved, the
    successful implementation of ISH as a standard operating procedure is
    not viable as a long term solution.

          Bobby R. Hughey, P.E. Chief Design Branch, St. Louis
                                                      District.

                Subscribed and sworn to before me this 29 day of February,
                2000.

                                             William P. Levins,
                   Notary Public, State of Missouri, City of St. Louis.
                                      My Commission Expires May 2, 2003
                                     ______

                                     TAB F
      before the united states senate committee on environment and public
                       works affidavit of harry e. kitch
        Pursuant to 28 U.S.C. 1746, the undersigned hereby executes the
    following sworn statement under penalty of perjury.
        1. I, Harry E. Kitch do hereby declare that I have been employed by
    the U.S. Army Corps of Engineers for over 28 years, and currently serve
    as the Chief, Formulation and Evaluation Branch, Planning Division in
    the Directorate of Civil Works, Headquarters, U.S. Army Corps of
    Engineers.
        2. Although I have not been actively involved in the Upper
    Mississippi River Navigation System study for over a year, on February
    4, 2000 I attended a meeting with MG Van Winkle, Dave Sanford, and Fred
    Caver because my supervisor, Dr. Jim Johnson was TDY in Oxnard,
    California and I was taking notes on his behalf. I prepared an
    electronic mail message to Dr. Johnson summarizing that meeting so that
    he would be prepared for any meetings which might occur the following
    week. The statement in my message that ``We are the navigation
    proponent and we can't have a limpwristed recommendation saying to
    build something out in 2025'' is my best recollection of what was said
    by MG Van Winkle during that meeting. MG Van Winkle would have to say
    what he meant by that statement, I was merely taking notes of what was
    said so that I could accurately reflect, for the benefit of my
    supervisor, the results of that meeting. The statement in my message
    that ``Concern was expressed that if we don't provide for the industry,
    navigation program might get moved to DOT'' is my best recollection of
    what was said by either Mr. Sanford or Mr. Caver during the meeting. I
    interpreted this statement as merely restating something that I had
    heard several times over the past couple of years that the navigation
    program could be moved to the Department of Transportation.
        I declare under penalty of perjury under the laws of the United
    States of America that the foregoing statement is true and correct to
    the best of my knowledge.

                                                 Harry E. Kitch

                Subscribed and Sworn To Before me in the District of
                ColumbiA, on this 3rd Day of March, 2000.

                                               Barbara J. Davis
                                                         Notary Public,
                                  My Commission Expires: June 14, 2001.
                                     ______

                                     TAB G
        I Jeffrey Marmorstein, being of legal age and under no legal
    disability, hereby state that the following is a true statement of
    facts to the best of my recollection and knowledge.
        On the evening of February 3, 2000 I was called at home by Mike
    Grunwald a reporter from the Washington Post. I gave him some
    information regarding my position with the Corps of Engineers and work
    history. I informed him that I was speaking entirely as a private
    citizen and in no way represented the Corps of Engineers. Further I
    informed him that I would not discuss the technical aspects nor offer
    an opinion on the results of the Navigation Study.
        He asked me if I had seen an affidavit prepared by Don Sweeney. I
    told him that I had. He further asked me if it ``really happened''. I
    answered that, as far as I knew, it was an accurate statement. When he
    asked me about Don Sweeney I made several complimentary remarks
    including that ``Don was the most talented public employee I had ever
    met'' and that while he was Technical Manager for the Economics on the
    Navigation Study his only motivation was to provide the most objective
    and accurate analysis possible.
        Mr. Grunwald asked my opinion about management changes that have
    taken place in the Corps. I gave him my honest opinion that, I believe,
    included the quoted statement ``unfortunately Corps' management has
    lost all respect for unbiased analysis''.
        Further I told him, according to my own notes, that ``It is very
    sad that this, largely successful study effort, is in danger of
    becoming just another Corps of Engineers embarrassment'' and ``It is
    regrettable that Corps' management has so effectively shut down all
    avenues of dissent that these issues, which should and could be
    resolved within the agency, must be made public''.
        The quoted statement ``It's very sad that this study is becoming
    another embarrassment'' was in reference to the apparent publicity that
    the story was going to receive and the public questioning of the Corps'
    integrity.

               Jeffrey Marmorstein, Operations Research Analyst

                Subscribed and sworn to before me on this 29 day of
                February, 2000.

                                             William P. Levins,
                   Notary Public, State of Missouri, City of St. Louis,
                                      My Commission Expires May 2, 2003
                                     ______

                                     TAB H
      before the united states senate committee on environment and public
                    works affidavit of colonel james v. mudd
        Pursuant to 28 U.S.C. 1746, the undersigned hereby executes the
    following sworn statement under penalty of perjury.
        1. I, James V. Mudd, am an officer on active duty with the U. S.
    Army and currently hold the rank of Colonel. I presently serve as the
    District Commander and District Engineer of the Rock Island District
    Corps of Engineers. I have served in this post since July 1997.
    Relative to the Upper Mississippi River-Illinois Waterway navigation
    system study, I hereby depose and say:
        2. As District Commander, I have general oversight and leadership
    responsibilities with regard to every study being conducted within the
    Rock Island District, including the Upper Mississippi River-Illinois
    Waterway navigation system study (UMRS). In this position, I receive
    information and assistance from individuals in the Corps' various
    disciplines, including engineering, planning, economics, and the
    environmental sciences. In the case of the UMRS, individuals in these
    fields from both inside and outside the Corps have been extensively
    involved in all aspects of the study process.
        3. With respect to the elasticity of demand for waterborne
    commercial transportation, over the course of the UMRS, the study team
    has expended considerable effort to determine the most appropriate
    value (the ``N'' value) to use in regard to grain.
        The UMRS team has evaluated information representing a wide range
    of values generated by numerous sources, including Corps economists,
    contractors, navigation users and shippers, and academic researchers.
    The N value of 1.2 for grain incorporated into the preliminary economic
    evaluations presented to the public at various workshops during the
    summer of 1999 was a weighted average using information from the August
    1998 expert elicitation panel and the 1994 Iowa Grain Flow Survey. The
    expert elicitation panel was composed of experts and economists from
    the Iowa Department of Agriculture, the University of Minnesota, Texas
    A&M University, North Dakota State University, and industry. The panel
    concluded that the N value for grain ranged between 1.0 and 2.0 in the
    Upper Mississippi region. Accordingly, the UMRS study team used this as
    a basis to define limit values.
        4. Using a methodology developed in discussions among myself and
    other members of the staff, the information from the expert elicitation
    panel was used to identify each end of the range of possible N values,
    while information from the Iowa Grain Flow Survey data was used to
    develop the distribution curve of grain moving to and on the
    Mississippi River. Subsequently, New Orleans District economist Richard
    Manguno, at my direction, calculated the N value for grain for the
    above methodology. I did not set a predetermined N value of 1.2; nor
    did I ask anyone to skew or falsify any economic data or assumptions.
    He assigned the limit N value of 1.0 (the relatively more inelastic N
    value) to the eastern region, which is the region closest to the river,
    and the limit N value of 2.0 (the relatively more elastic N value) to
    the western region, which is the region farthest from the river. He
    assigned the mid-point of the N value range, i.e., 1.5, to the central
    region.
        5. Data from the 1994 Iowa Grain Flow Survey, which described the
    proportion of each region's corn production that moved to the river,
    was then used by Mr. Manguno to assign weights to the crop reporting
    regions. He converted these proportions to weights (proportions of
    total river originating from each region--0.69, 0.21, and 0.10,
    respectively, for the eastern, central, and western regions) and
    assigned them to the appropriate region. With assigned N values and
    weights for each region, Mr. Manguno then calculated the overall
    weighted average. The weighted average that resulted from the
    calculation was applied to all grain movements shipped from all
    origins.
        6. As noted above, the N value of 1.2 was used by the Corps' study
    team in preliminary economic evaluations presented to the public during
    the summer of 1999. It was the result of information provided by Corps
    economists, Corps contractors, navigation users and shippers, and
    academic researchers and is based on a reasoned methodology. Prior uses
    of elasticity values for grain used in the study model, on the other
    hand, were strictly theoretically based (not based on empirical data).
    Finally, in regard to any contention that the value is too low (i.e.,
    inelastic), it should be noted that at least one authority, Dr. Robert
    J. Hauser, Professor and Head of the Department of Agriculture and
    Consumer Economics at the University of Illinois, Urbana-Champaign, has
    provided an expert opinion supporting lower elasticity factors than
    currently reflected in the analysis. His opinion and the study
    underlying it (see attached) are still being analyzed.
        7. In regard to the allegation of disbanding of the economic panel,
    the panel was originally established for a 90-day period with
    responsibility for the identification of the NED Plan and the producing
    of the economic tools sufficient to analyze additional alternatives
    (July 1998-September 1998). The results of the panel's work would be
    used to brief the Director of Civil Works in Washington, D. C. At the
    conclusion of that period, MVD Commander MG Philip Anderson asked that
    the panel continue under the direction of New Orleans District
    economist Richard Manguno. During the subsequent months there was
    significant input from HQ USACE, CELRD, the five states in the study
    area, industry, and the expert elicitation panel. In June 1999 the
    panel was asked to provide input and commentary on the economic
    conclusions that had been completed to date. The decision to release
    the economic panel members to return to their regular duties was made
    by MG Anderson in July 1999. My understanding is that this decision was
    based on MG Anderson's determination that it was no longer necessary to
    continue the panel since it had completed its function. I understand
    that he determined that the production of future economic products
    would be the responsibility of the study team with Mr. Manguno leading
    the economic work group.
        I declare under penalty of perjury under the laws of the United
    States of America that the foregoing statement is true and correct to
    the best of my knowledge.

       James V. Mudd, COL, EN, Commander, Rock Island District.

                Subscribed and Sworn To Before me in the District of
                Columbia, on this 2nd Day of March, 2000.

                                              Barbara J. Davis,
                                                         Notary Public,
                                  My Commission Expires: June 14, 2001.
                                     ______

                                  attachment 1
      Statement on Barge Demand Elasticities for Grain, Robert J. Hauser
     Professor and Head Department of Agricultural and Consigner Economics
                    University of Illinois, Urbana-Champaign
                                 July 22, 1999
        This statement concerns the estimate for the barge-rate elasticity
    of demand for grain shipments on the Upper Mississippi and Illinois
    Rivers used by the Corps of Engineers in its evaluation of various
    navigation-related projects. My understanding is that the most recent
    estimate of elasticity used by the Corps is approximately three.
    (Demand elasticities referred to in this statement will be in absolute
    (positive) terms.)
        Since farm products account for the majority of the traffic on the
    Upper Mississippi and Illinois Rivers, assessments of navigation
    benefits and costs rely heavily on the underlying barge demand
    elasticities for corn and soybean shipments. In analyses conducted by
    the Corps, if the estimated demand elasticity is too high, waterway
    navigation benefits will be understated; if too low, the resulting
    benefits will be overstated. Thus it is important that ( 1) the general
    level of the elasticity be considered carefully, (2) differences in
    elasticities between river segments be considered, (3) a reasonable
    range of potential elasticities be considered, and (4) the sensitivity
    of the project-evaluation results to changes in the elasticity be
    measured. I will address points 1 through 3, based on a study conducted
    during the 1980's by Hauser, Beaulieu, and Baumel (HBB) \1\.
    ---------------------------------------------------------------------------
        \1\ Hauser, Robert J., Jeffrey Beaulieu, and C. Phillip Baumel.
    ``Impacts of Waterway User Fees on Grain Transportation and Implied
    Barge Rare Elasticines,'' Logistics and Transportation Review,
    21(1985), pp 37-55. Funded by U.S. Dept of Transportation, Contract
    DTRS-57-8C-00133.

        NOTE: The article from Logistics and Transportation Review
    referenced in Footnote 1 was attached to the affadavit at this point.
    It is retained in committee files.
    ---------------------------------------------------------------------------
        HBB measured impacts of alternative waterway user fees. The 1980
    transportation rate structure for rail, barge and truck was used to
    estimate user-fee impacts given forecasts of 1985 supply/demand
    conditions for grain. The EBB grain-flow projections were found with an
    optimization model containing over 11,000 alternatives for shipments of
    corn, soybeans, and wheat in the U.S., expressed In over 3,000
    equations. A base line solution (in terms of grain flows and attendant
    transportation costs) was found under the 1980 rate structure. The
    impacts of user fees were then assessed by measuring changes in grain
    flows and costs caused by imposing user fees (i.e., changing barge
    rates.) An important output of the analysis are estimates of own-price
    elasticities for grain barge shipments since the change in barge rate
    causes a measurable change in barge shipments, enabling the calculation
    of elasticity estimates. Resulting estimates are presented in Table 1.

                                    Table 1.
              Estimated Barge Demand Elasticities for Grains (HBB)
    ------------------------------------------------------------------------
                                                     Barge Demand Elasticity
                                                   -------------------------
                                                      Fuel Tax   Segment Tax
    ------------------------------------------------------------------------
    Upper Mississippi River.......................         2.09         2.10
    Illinois River................................         1.07         0.92
    All River Segments............................         1.62         1.48
    ------------------------------------------------------------------------

        As indicated in Table 1, the barge demand elasticities for grain
    (corn, soybeans and wheat) found by HBB for the Illinois River, the
    Upper Mississippi River, and the entire system are well below the
    demand elasticity of 3.0 currently implied by the Corps' shipment
    demand function for grains. Moreover, the degree of difference depends
    on the river segment. Because of its location relative to other rivers
    and to production, the Illinois River's elasticity is approximately
    half that for the Upper Mississippi River. Consequently, the HBB
    analysis suggests that using a single transportation demand elasticity
    for all waterways is not appropriate.
        HBB note that their analysis is a ``snapshot'' of demand
    characteristics chat change from year to year, if not from day to day.
    In general, the barge rates used in the HBB analysis are higher than
    those which have existed since the study was conducted, implying that,
    under a stationary and linear demand, elasticities have fallen since
    the early 1980's and that the HBB estimates are probably biased
    upwards, indicating further that the Corps estimate is relatively high.
        Given the HBB analysis, the Corps' elasticity estimate should be
    considered, at best, an upper bound for analysis. Lower bounds could
    reasonably be defined well below one. Given this type of range, an
    important question becomes: how sensitive are the Corps' findings to
    changes in elasticity estimates from, say, 0.5 to 3.0? Consideration of
    this question by river segment is critical to providing a sound
    assessment of the benefits and costs associated with new projects on
    the inland waterway system.
        Your consideration of this statement is appreciated.
                                     ______

                                     TAB I
        I Lenard H. Ross, being duly sworn under oath, being of legal age
    and under no legal disability, do hereby state that the following is a
    true statement of facts according to my recollection and knowledge:
        In response to question No. 7
        In writing ``getting to yes as soon as possible'' I was referring
    to actions to reduce the normal ten plus years it takes to get a
    project from the study phase to the construction phase. Such actions
    include working issues in parallel rather than in series, anticipating
    funding needs and working harder, faster and smarter.
        In writing ``study managers not take no for an answer'' I was
    referring to the roadblocks and delays encountered by study managers.
    Many of which are internal Corps policies and procedures. Study
    managers are encouraged to look for ways to work around a problem not
    give up.

        Lenard H. Ross Chief, Construction Branch Construction-
                                Operations, Readiness Division.

                Subscribed and Sworn to before me this 29th day of
                February, 2000.

                                             William P. Levins,
                   Notary Public, State of Missouri, City of St. Louis.
                                     My Commission Expires May 2, 2003.
                                     ______

                                     TAB J
      before the united states senate committee on environment and public
                    works affidavit of david b. sanford, jr
        Pursuant to 28 U.S.C. 1746, the undersigned hereby executes the
    following sworn statement under penalty of perjury.
        1. I, David B. Sanford, Jr. do hereby declare that I am an employee
    of the U.S. Army Corps of Engineers, and currently serve as the Chief,
    Policy Division in the Directorate of Civil Works, Headquarters, U.S.
    Army Corps of Engineers.
        2. Question 2 relates to a February 4, 2000 memo which contains the
    statement ``concern was expressed that if we don't provide for the
    industry, navigation program might get moved to'' Department of
    Transportation. I interpreted this statement as meaning that if the
    Corps could not produce a study, with recommendations (whether or not
    the recommendations supported lock expansion), then the navigation
    industry group (MARC2000) might seek assistance from the Department of
    Transportation. I declare under penalty of perjury under the laws of
    the United States of America that the foregoing statement is true and
    correct to the best of my knowledge.

                                          David B. Sanford, Jr.

                Subscribed and Sworn To Before me in the District of
                Columbia, on this 3rd Day of March, 2000.

                                              Barbara J. Davis,
                                                         Notary Public,
                                   My Commission Expires June 14, 2001.
                                     ______

                                     TAB K
              affidavit, state of illinois, county of rock island
        I, Paul D . Soyke, am employed by the Rock Island District of the
    United States Army Corps of Engineers as the Chief, Economic Analysis
    Branch in the Program & Project Management Division. I also was a
    member of the Economics Panel for the Upper Mississippi River-Illinois
    Waterway System Navigation Study. Relative to Question No. 9 in the
    February 28, 2000 letter fro m Senator Voinovich to LTG Ballard, I
    hereby depose and say:
        The quote, ``The team should determine an alternative . . . that
    appears to be the most likely to justify large-scale alternatives in
    the near-term'' was made by me, a member of the Economic Panel on
    September 3, 1998. The statement was made in reference to the testing
    of the economic model and its sensitivity to various parameters. The
    reference was to only one of a number of alternatives that should
    eventually be tested. I sent an e-mail (attached) later the same day to
    all the recipients clarifying the intent after receiving comments. This
    later e-mail states, ``If my message was interpreted to indicate that
    `our recommended alternative will be determined based on assumptions
    that appears most likely to justify large scale alternatives in the
    near term', I apologize. I think we owe it to the decision-makers, our
    partners, and ourselves to know `what it takes to justify a project'.
    That is a part of sensitivity analysis.'' This was not a decision or
    command to manipulate the model or study results, but instead was part
    of an effort to better assess the model and its sensitivity to many
    parameters that were not known with certainty.
        In witness whereof, I have set my hand this 1st day of March 2000.

                                                 Paul D. Soyke,

                Subscribed and sworn to the undersigned, a notary public,
                in and for the State of Illinois, County of Rock Island,
                this 1st day of March 2000.

                                            Aimee D. Vermeulen,
                                      Notary Public, State of Illinois,
                                        My Commission Expires 01/15/03.
                                     ______

                                  attachment 1
                               Soyke, Paul D MVR

    From: Hanson, Dudley M MVR
    Sent: Friday, September 04, 1998 7:41 AM
                                                  To: Soyke, Paul D MVR
    Subject: RE: Alternative scenarios

        Paul, Please don't feel any need or pressure to respond to HO. MVD
    will do that as needed, or task us to do it.
                            ----Original Message----
    From: Soyke, Paul D MVR
    Sent: Thursday, September 03, 1998 2:21 PM
    To: Conner, Ronald R HQ02, Karnish, Diane MVS; Hanson, Dudley M MVR;
        Hammond, Mark R LRH01; Manguno, Richard J MVN01; Walker, Wesley W
        LRH01; Arnold, William E MVD01; Sweeney, Donald C II MVS; Carr,
        John P MVR; Mcdonald, Jesse K MVD01
    Cc: Daniel, Robert M HQ02; Kitch, Harry E HQ02
    Subject: RE: Alternative scenarios

        I'm sorry that I was not clear. Don is working on the ``without''
    condition and a preliminary NED with as given set of assumptions. As I
    understand, there are alternate assumptions that can be made. In order
    to provide as much information as possible, MVD has asked that we look
    at what the output of these alternative assumptions might be. The
    primary goal is the preliminary NED. If my message was interpreted to
    indicate that ``our recommended alternative will be determined based on
    assumptions that appears most likely to justify large scale
    alternatives in the near term'', I apologize. I think we owe it to the
    decision-makers, our partners, and ourselves to know ``what it takes to
    justify a project''. That is a part of sensitivity analysis.
                           -----Original Message----
    From: Conner, Ronald R HQ02
    Sent: Thursday, September 03, 1998 1:59 PM
    To: Soyke, Paul D MVR; Karnish, Diane MVS; Hanson, Dudley M MVR;
        Hammond, Mark R LRH01; Manguno, Richard J MVN01; Walker, Wesley W
        LRH01; Arnold, William E MVD01; Sweeney, Donald C II MVS; Carr,
        John P MVR; Mcdonald, Jesse K MVD01
    Cc: Daniel, Robert M HQ02; Kitch, Harry E HQ02
    Subject: RE: Alternative scenarios

    Folks

        Would someone like to explain to me what exactly I've missed. In
    the Tuesday meeting with Dusty, I heard explicit direction that a
    preliminary NED will be presented by 17 Sept. Which, as I understand
    it, is the way the 90-day process was sold to HO. Is that still the
    case or are we presenting a range of scenarios which will take to the
    GLC and the public to help us decide the NED? Given that changes must
    be made to the SEM to account for the new small-scale/without project,
    do you have time to run these alternate scenarios before Sept 17. Why
    not identify a prelim NED based on the current assumptions, then run
    alternate scenarios as sensitivity analysis prior to meeting with the
    GLC and public? Also as a further suggestion, avoid sending E-Mails
    around which suggest our recommended alternative will be determined
    based on assumptions that appears most likely to justify large scale
    alternatives in the near term. Regardless of what you decide to do, I
    need to see a summary or minutes from the teleconference or meeting I
    missed to report up the chain. Thanks.

    Ron
                           -----Original Message-----
    From: Soyke, Paul D MVR
    Sent: Thursday, September O3, 1998 11:39AM
    To: Diane Karnish; Dudley Hanson; Hammond, Mark R LRH01; Manguno,
        Richard J MVN01; Walker, Wesley W LRH01; Arnold, William E MVD01;
        Donald Sweeney; John Carr; Mcdonald, Jesse K MVD01; Ronald Connor
    Subject: Alternative scenarios

        Dudley suggested that I send my thoughts to all of you and get your
    comments and ideas. It is important to reduce the amount of work
    required while still trying to get the options desired by MVO. Until
    the without project condition is complete, it is difficult to predict
    which set of assumptions will most productive. Rich and Jack will be in
    St. Louis on Tuesday to provide assistance in running the options. They
    need the flexibility to make the week productive.
        Please give me your comments by noon Friday on the following
    suggestions.
        Based on the teleconference yesterday and Jesse's proposal, I am
    offering the following suggestions:
        There should be a scenario based on a high (tripling of grain
    exports by 2050) commodity forecast with demand functions for grain of
    1.0 and 0.5 for all other. This is similar to Alt. 3 from Jesse. There
    should also be one using 1.0 for all commodities and the midline
    forecast. The team should then determine an alternative, based on these
    results, that appears to be the most likely to justify large scale
    improvements in the near term. This alternative should use conditions
    and assumptions that are within the range of the information available
    that could be within some reasonably likely future.
        These alternatives would seem to bound the options and allow us to
    work with the GLC and the public to determine acceptable limits and
    levels of confidence of the assumptions. Based on the results and those
    discussions, I would suspect that we could then do further runs and
    determine a recommended plan.
        I believe that the team in St. Louis next week should be given the
    flexibility to include or delete the IWW locks if the initial runs
    indicate that this would impact the results.
                                     ______

                                     TAB L
    before the united states senate committee on the environment and public
               works affidavit of major general hans. van winkle
        Pursuant to 28 U.S.C. 1746, the undersigned hereby executes the
    following sworn Statement under penalty of perjury.
        1. I, Hans A. Van Winkle, do hereby declare that I am a Major
    General in the United States Army currently serving, since June, 1999,
    as Deputy Commanding General for Civil Works of the U.S. Army Corps of
    Engineers, and stationed at its Headquarters in Washington, D. C.
        2. This affidavit is being prepared in response to written
    questions presented by Senator George V. Voinovich, Chairman,
    Subcommittee on Transportation and Infrastructure of the Senate
    Committee on Environment and Public Works. The Senator's letter and
    questions relate to the Corps' Upper Mississippi River-Illinois
    Waterway Navigation Study. Question 1 in Senator Voinovich's letter
    referred to a meeting I attended on February 4, 2000. The question
    asked that I explain what I meant by a statement attributed to me in an
    e-mail message, dated February 4, 2000, and written by another attendee
    at that meeting, Harry E. Kitch (hereinafter the HKitch e-mail''). The
    statement which I have been asked to explain was presented as follows:
    `` we are the navigation proponent and we can't have a limp-wristed
    recommendation saying to build something out in 2025''. In addition,
    question 2 in Senator Voinovich's letter asked that the participants in
    the February 4, 2000 meeting interpret another statement in the ``Kitch
    e-mail''. As presented by Senator Voinovich the statement read that
    ``'concern was expressed that if we don't provide for the industry,
    navigation program might get moved to' the Department of
    Transportation''. This statement was not attributed. I will respond to
    both questions.
        3. At the outset, I state that at the times and events addressed in
    this affidavit I was unaware that Dr. Donald Sweeney was in the process
    of or had prepared an affidavit concerning the Upper Mississippi River
    Study.
        4. With respect to Senator Voinovich's Question 1, I made the
    statement, or a substantially similar statement, attributed to me, in
    the following context and with the intent set forth below.
        5. I made the statement at a meeting held on February 4, 2000.
    While I cannot attest to the word for word accuracy of the quoted
    statement, since I did not take any notes, nor had an official note
    taker been designated, the statement is generally accurate. The
    statement was made in the informal give and take of this meeting among
    my senior advisors and myself The statement simply expressed my
    frustration at the status of the Study at that time. After expending 7
    years and $50 million dollars, we were not able to yet finalize all
    elements of the array of alternatives identified in the Study. Among my
    frustrations was the fact, as I understood it, that some of the
    proposed alternatives, if adopted, would require even more study and
    the expenditure of additional funds before being able to fully
    implement them. In my opinion, the Corps of Engineers, as an expert on
    the Nation's inland waterway system, ought to be able to make firm
    proposals or recommendations, based upon sound, comprehensive data and
    analysis. Those proposals or recommendations should be implementable
    without endless study. In this case, in part,
        I was questioning whether proposals or recommendations requiring or
    anticipating yet more study were warranted or justified. Also expressed
    in that statement is my view that the Corps is the Federal agency
    responsible for examining options for the development, management, and
    conservation of our Nation's water resources with the objective of
    providing the Administration and the Congress with balanced choices for
    the future. Just as the Department of Transportation is the
    ``proponent'' in these respects for surface transportation systems, the
    Corps, in my opinion, is such for our Nation's waterways.
        6. The February 4, 2000 meeting was a follow-up meeting to a prior
    briefing I had received about the Study. The prior briefing, held on
    January 28, 2000, led by the Corps' Mississippi Valley Division (MVD),
    was by Video Teleconference (VTC). This was my first briefing on this
    Study since I assumed my duties as the Deputy Commanding General for
    Civil Works of the U.S. Army Corps of Engineers in June, 1999.
        7. Based upon the VTC briefing, I had some questions and concerns,
    principal among which were two. First, I wanted to assure myself that
    extending 600 foot locks, to 1200 feet, as MVD proposed, was a sound
    recommendation. The current locks average 50 years old, and building
    extensions to these aging structures added an element of engineering
    risk. Second, I had questions about the ``optimally timed'' project
    alternatives identified in the Study. Members of my staff also had
    questions about the MVD presentation.
        8. Because of these questions and concerns, I convened the February
    4, 2000 meeting previously discussed. Attendees at this meeting
    included Mr. Thomas F. Caver, the Corps' Chief, Civil Works Programs
    Management Division, Mr. David Sanford, the Corps' Chief, Civil Works
    Policy Division, Mr. Harry E. Kitch, representing the Corps' Chief,
    Civil Works Planning Division who was not available for the meeting,
    and myself. Though the others had been participants in the January
    28,2000 VTC, Mr. Kitch had not. At this meeting, my staff recommenced
    that we undertake an Alternative Formulation Brief (AFB). I concurred.
    The AFB is standard procedure that would allow us to address my
    questions, and others. Completion of the AFB and presentation of its
    conclusions is expected in early March 2000.
        9. With respect to Senator Voinovich's Question 2, the comment, as
    I interpreted it, reflected how the navigation and agricultural
    industries felt about working with the Corps of Engineers. On this
    project, these interest groups had complained that the Corps had
    rejected their data and input, that the Corps process was not
    inclusive, and that reasonable assumptions and data were not being
    treated in a fair and reasonable way. In short, I understood the
    comment to highlight a concern that this Study process be inclusive and
    fair. I do not recall how this issue was raised at the meeting.

                               Major General Hans A. Van Winkle

                Subscribed and Sworn To Before me in the District of
                Columbia, on this 3rd Day of March, 2000.

                                              Barbara J. Davis,
                                                         Notary Public,
                                  My Commission Expires: June 14, 2001.

                                   __________
        Statement of Doug Sutherland, County Executive, Pierce County,
                                   Washington
        Mr. Chairman and members of the subcommittee: my name is Doug
    Sutherland. I am the County Executive for Pierce County, Washington.
    Thank you for the opportunity to testify on the Water Resources
    Development Act of 2000.
        Pierce County lies along the eastern shore of Puget Sound and
    includes the city of Tacoma. The County includes the Puyallup and
    Nisqually Rivers, two of the 17 major river watersheds that comprise
    the Puget Sound basin.
        I respectfully request that the Subcommittee authorize the Corps of
    Engineers to participate with local agencies in planning and
    implementing ecosystem restoration projects in the Puget Sound region,
    as proposed in S. 2228 and the Administration's WRDA proposal. I
    recognize the many competing priorities that the Committee is facing in
    developing WRDA 2000, and know you will have difficult decisions to
    make about what to include in the bill. I'd like to relay why ecosystem
    restoration work in Puget Sound is a top priority to Pierce County and
    the Pacific Northwest, and why a major national commitment to the
    effort is warranted.
        It wasn't long ago that you could walk or boat along any river in
    the Puget Sound basin in the fall or winter and be sure of seeing
    thousands of salmon, often so abundant that they filled every pool and
    riffle. As recently as the 1970's, it was possible to share the
    experience of the earliest settlers to our region, who wrote of salmon
    so thick that you could walk across their backs from bank to bank.
        I'm sorry to say that these days, you could spend all day on one of
    the big salmon rivers of the region, including the Puyallup and the
    Nisqually in my county, and be lucky to see a hundred fish. The
    listings of chinook salmon and bull trout under the Endangered Species
    Act last year confirmed what every keen observer has witnessed for a
    decade: salmon are in steep decline in Puget Sound. A big run every few
    years and hopeful projections can no longer disguise the marked decline
    in salmon populations.
        If this trend continues, it is not too difficult to imagine that 1
    day in the not too distant future someone will witness the last salmon
    to swim in the Puyallup, the Skagit, or the Snoqualmie. If this occurs,
    we will have lost a resource of incalculable value: a cultural and
    social icon, an angler's once-in-a-lifetime prize, the catch of the day
    for a major tribal and commercial fishing industry. Imagine New England
    without fall colors, the Chesapeake without blue crabs, and California
    without the redwoods. Roll them into one, and you have some idea of
    Puget Sound without salmon.
        We are committed to bringing Puget Sound salmon back from the
    brink. One of the prime reasons for the decline of salmon has been
    destruction of habitat from a century of agriculture and timber
    harvest, urbanization, flood control, and navigation projects. The
    result is a checkerboard landscape, where pockets of high-quality
    habitat are interspersed with areas in which stream channels and
    streamside areas are in poor shape. Bringing salmon back from the brink
    will require the rebuilding of salmon habitat on an unprecedented
    scale, with substantial work needed in every one of the 17 watersheds
    of the Puget Sound basin.
        We need your help. Pierce County has joined with the U.S. Army
    Corps of Engineers on several major projects on the Puyallup River, and
    we have found the agency to be a capable and enthusiastic partner.
    Corps assistance has allowed us to undertake habitat restoration and
    flood protection projects that would have been impossible without the
    agency's technical and financial assistance. We would like to see the
    Corps' support available to communities throughout the Puget Sound
    basin.
        I am delighted that President Clinton and the Washington
    Congressional delegation have shown support for this effort through the
    Administration's WRDA bill and S. 2228. There are several elements of
    S. 2228 that I hope you will integrate into WRDA 2000. Most
    importantly, I urge you to authorize the program at the $125 million
    level proposed in S. 2228. The Puget Sound basin is large, with 17
    watersheds comprising more than 13,000 square miles, an area larger
    than the state of Maryland. As I've stated before, habitat restoration
    work is needed throughout the basin if we're to have any hope of saving
    salmon in Puget Sound. Spread out over 8 years and among projects with
    an average Federal cost of $1 million, the authorization of $125
    million would allow 15 of the highest priority projects a year to be
    completed. Over the course of the program, this level of commitment
    would make a big dent in the hundreds of restoration projects that are
    urgently needed to rebuild salmon populations.
        I also recommend the provisions of S.2228 regarding selection of
    projects under the program that direct the Corps to consult with
    Federal, state, and local agencies and use prior plans and studies to
    prioritize and select projects. These provisions will ensure that the
    program is efficient, targeted to on-the-ground results, and fully
    compatible with other restoration efforts in the region.
        The third aspect of S. 2228 that I'd like to highlight to you is
    how project costs are divided between the Federal Government and non-
    Federal sponsors. Consistent with other Corps habitat restoration
    programs, S. 2228 provides a greater Federal contribution in areas that
    are affected by a prior Corps project. In addition, S. 2228 waives part
    of the cost-sharing requirement for projects cosponsored by an Indian
    tribe. I strongly support these provisions.
        My discussions with local government, tribal, environmental, and
    business leaders around Puget Sound indicate that there is strong
    support for S. 2228 and the partnership it will create. Pierce County
    and our neighbors around Puget Sound stand ready with funding,
    projects, and staff expertise to match the Federal commitment in this
    bill. Our jurisdictions have spent more than $15 million per year for
    the last 3 years on salmon projects and programs, and I can assure you
    that we are ready to rise to the funding challenges of this new
    program.
        I deeply appreciate the bipartisan support for salmon recovery
    demonstrated by the Washington Congressional delegation, and would
    particularly like to thank Senators Murray and Gorton and
    Representatives Inslee and Dicks for their leadership on this
    legislation. I'd also like to recognize and thank the other cosponsors
    of House version of this bill, Representatives Metcalf, Baird, Smith,
    and McDermott.
        Thank you for the opportunity to testify and I look forward to a
    long and fruitful partnership for the recovery of Puget Sound salmon.
                                     ______

    Responses of Doug Sutherland to Additional Questions from Senator Smith
        Question 1. As you know, the Administration's proposal requests $10
    million for environmental restoration projects in the Puget Sound
    region. How would $10 million compare to the amounts received in your
    region, under the Corps' Section 2G6 authority?
        Response. I understand from the Corps that the Seattle District has
    expended $900,000 in studies and has programmed $4?8 million to
    construct restoration projects in the Puget Sound region under the 206
    authority. In the Corps other restoration program under Section 1135,
    more than $6.5 million has been expended and an additional $3.1 million
    programmed for habitat work in the Puget Sound basin in the last 5
    years. This is a high level of demand for programs that are new and not
    well publicized, and the demand for Corps assistance is expected to
    grow substantially in the region in coming years.

        Question 2. Can you describe some of the specific types of projects
    that would be conducted under the Administration's proposed provision,
    if it were enacted?
        Response. We anticipate that projects would include: . Restoring
    connections between rivers and side channel and floodplain habitats;
          Reconfiguring levees and dikes to improve habitat
    characteristics, including levee setbacks;
          Replacing undersized culverts and other barriers to
    salmon migration; Restoring estuary and marine beach habitat; Placing
    logs and stumps in streams and rivers to improve channel diversity; and
    . Planting trees and shrubs on riverfront lands; Puget Sound
    jurisdictions working with the Corps have implemented several projects
    of this sort in the last few years and can provide specific examples if
    needed.

        Question 3. The Water Resources Development Act of 1996 provided
    authority for the Corps to carry our aquatic ecosystem restoration and
    protection projects with state, local government and private nonprofit
    partners on a 65 percent Federal and 35 percent nonFederal basis. The
    authority provides for projects up to a Federal cost of $5 million and
    authorizes annual appropriations up to $25 million. In view of this
    national program, why does the Puget Sound Region need its own
    exclusive program?
        Response. Federal fisheries agencies have designated the Puget
    Sound basin as a whole as the appropriate region for recovery of
    chinook salmon and bull trout stocks that have recently been listed
    under the Endangered Species Act. Habitat restoration will be required
    to meet Federal ESA mandates throughout the basin, creating a high
    demand for assistance from Section 206 and other habitat programs.
    There are several reasons why assistance can be more effectively and
    efficiently provided through a Puget Soundwide program: 1. The regional
    scale and rigorous scientific standards for evaluating projects through
    the program will ensure that projects are selected on their merits and
    will individually and collectively make a valuable contribution to
    regional salmon recovery needs. 2. The evaluation of cost-effectiveness
    of projects on a regional scale will ensure that the program as a whole
    will be highly efficient, reducing long-term costs of salmon recovery.
    3. More assistance and funding will be available to the many
    communities around Puget Sound that have valuable salmon habitat but
    lack the staff and funding needed to compete effectively under existing
    Corps authorities.

        Question 4. The Administration's proposal for the Puget Sound
    Restoration Program authorizes a program for the Puget Sound Region for
    environmental restoration projects with a Federal cost up to $2.5
    million to be cost shared on a 65 percent Federal and 35 percent non-
    Federal basins with non-Federal governments. The provision authorizes
    up to $10 million in Federal appropriations which would require non-
    Federal matching funds of about $5.4 million. S. 2228 proposes a
    similar program for the Puget Sound region but proposes a Federal share
    of up to $5 million per project and a total appropriation authorization
    of $125 million requiring non-Federal matching funds of over $67
    million. Your testimony supports the $125 million appropriation. Does
    the Puget Sound region have the capabi!lty to provide the 35 percent
    non-Federal share to match this level of Federal appropriation?
        Response. Pierce County and our neighboring jurisdictions in the
    Puget Sound region are ready and able to provide the necessary funding
    to match Federal funds. We intend to match Federal funds with local,
    state, private, and tribal sources. Our strong commitment to providing
    needed funding is demonstrated by: More than $45 million in local
    funding of salmon projects and programs provided by Tri-County cities
    and counties in the last 3 years; Leadership to secure more than $38
    million in state funding for salmon projects in the 1999-2001 biennial
    budget; and Assistance in establishing a new regional organization, the
    Puget Sound Salmon Foundation, to solicit private funding for salmon
    work. Jurisdictions in our region see salmon recovery as a long-term
    commitment, and are ready to provide the funding needed to accomplish
    the job.
                                   __________
     Statement of Lillian Borrone, Director, Port Commerce Department The
                    Port Authority of New York & New Jersey
        Thank you, Mr. Chairman and members of the committee. My name is
    Lillian Borrone and I am Director of Port Commerce for The Port
    Authority of New York and New Jersey. We appreciate this opportunity to
    testify on behalf of a Federal navigation project and related matters
    that are of critical importance not only to the New York-New Jersey
    region, but also to the entire nation. As I begin, I would like to take
    a moment to recognize the invaluable work and untiring efforts of
    retiring Senators Frank Lautenberg of New Jersey and Daniel Patrick
    Moynihan of New York on behalf of the Port of New York and New Jersey
    and the citizens of our states. Their leadership has been tremendous
    and will be sorely missed for reasons that extend far beyond the bounds
    of water resources legislation.
        The Port Authority is a bistate public authority created in 1921
    and charged by the two States to promote and protect commerce in the
    New York-New Jersey metropolitan region, including responsibility to
    provide the infrastructure necessary to accomplish that goal.
        The Hudson-Raritan estuary was one of America's principal ports
    well before the First Continental Congress met. Before the Dutch
    settlers of New Amsterdam built roads or schools, they built docks.
        Historically the Port of New York and New Jersey has been the
    gateway for much of the nation's imports and exports. In fact, as late
    as the 1950's half of all U.S. trade flowed through the Port. As the
    nation's land and waterside infrastructure improved, especially in the
    latter half of the 20th century, other ports grew. As production and
    population growth shifted southward and westward, so did a growing
    share of the country's maritime trade. By the 1970's the Pacific Rim
    had begun to supplant the North Atlantic nations as the driving force
    of global economic growth, resulting in a boom in business at our
    western ports. That growth was not only good for the country but
    necessary as the U.S. economy became more integrated with the new world
    economy.
        While the Port of New York and New Jersey's U.S. market share
    experienced a decline as other port regions and intermodal capabilities
    grew, the actual volume of trade remains enormous and it continues to
    increase. Today, New York-New Jersey is handling 2.5 million containers
    (as measured in twenty-foot equivalent units), a growth of 67 percent
    in just 4 years. And the cargo volumes at our Port, like the rest of
    the nation, are projected to continue to grow. Trade growth nationwide
    is projected at 4 percent in the years ahead; we conservatively project
    a 3.7 percent growth that would mean a doubling of cargo in our port
    over this decade. Other major ports anticipate similar growth.
        This realization prompted us in 1998 to undertake a major review of
    the impacts of such growth on our marine infrastructure and determine
    what new investments would be required in our marine terminal, roadway,
    railroad and waterway infrastructure to meet this future demand.
        The results of that review are contained in an investment options
    plan with a scope of 40 years that identifies up to $7 billion in local
    investments to modernize and expand the major components of the Port's
    infrastructure.
        The Port of New York and New Jersey is not alone, obviously, in
    considering or undertaking major new investments in its maritime
    infrastructure. Charleston is planning to develop a new terminal on
    Daniels Island, Los Angeles and Long Beach are investing billions of
    dollars in marine terminal and intermodal infrastructure, while the
    Virginia Ports Authority has expansion plans of its own. A 1995 VPA
    study identified almost $335 million in improvements to accommodate the
    significant cargo growth projected for that port. Continuing with the
    Virginia example, the study forecast a possible 250 percent increase in
    containerized cargo by 2010 of which intermodal volume was expected to
    increase 300 percent. I would not be surprised if today those 5 year
    old projections are revised upward to account for the incredible
    changes of our economy. All told, the Maritime Administration reports
    that between 1999 and 2003, ports predicts spending over $9 billion of
    non-Federal funding on marine terminals, dredging and other
    infrastructure.
        Mr. Chairman, the significance of the Federal and port industry
    estimates is very clear. In this age of the international economy,
    multilateral trade relationships and intermodal technologies, import
    and export cargo flows will grow increasingly and we all will have to
    invest in channels and facilities in order to stay competitive.
        Coupled with projections for strong growth in international trade
    throughout the U.S. is changing trends in the maritime industry. An
    impressive example of one of the trends sailed into New York Harbor in
    the summer of 1998 with the arrival of the Regina Maersk, her first
    U.S. stop on her inaugural East Coast Tour. She is a 6000 TEU vessel
    whose operating efficiencies can be realized with channel depths of 47
    feet. (The Army Corps of Engineers uses a +2 feet standard to ensure
    safe bottom clearance in the channels.) An indicator of the challenges
    the Port of New York and New Jersey faced was the fact that the Regina
    had to stop first in Canada to discharge cargo before sailing into New
    York to make certain the vessel could navigate the 40-foot channels
    available to her. (I should note that underway now is Phase 2 of the
    45-foot deepening of channels leading to the Howland Hook, Newark and
    Elizabeth container terminals.)
        While the Regina Maersk may have been the first of these large
    vessels to call on New York Harbor, she not the only one we will see.
    As of the first quarter of 2000, there are 101 deep draft or ``Post-
    Panamax'' container ships sailing the world's trade lanes. While these
    vessels represent a little more than 6 percent of the world's
    commercial fleet, they carry 14 percent of all of the cargo traded in
    the world. In addition, another 130 orders have been placed by shipping
    lines that will more than double the number of these giants in service
    around the world. It is clear that the established trend toward larger
    vessels in most trade lanes is not an extraordinary occurrence for
    specialized cargo as was the view during the WRDA debate of 1986; it
    has, in fact, become the industry standard, much as corresponding
    channel depths will be the standard. This trend in the maritime
    industry is no different from technological developments in other
    transportation modes. It is the ocean equivalent of wide body jets,
    tandem trucks and double-stack unit trains, all of which are familiar
    sights throughout the country.
        Given the long time that it takes to plan and carry out major
    infrastructure investments and the certain knowledge of the pressures
    that trade and technology will bring to our gateways, this country
    cannot afford to put off project authorization and funding decisions
    until the private sector is choking the channels of U.S. ports with
    ships with modern ships that require modern channels.
        In recognition of this direction in ocean shipping and the
    presently inadequate depths of New York Harbor to accommodate these new
    vessels, our congressional delegation, including Senators Lautenberg
    and Moynihan, helped authorize a Corps feasibility study. That work,
    the New York and New Jersey Harbor Navigation Study, was completed this
    year. It is the subject of a Chief's Report signed earlier this month.
    In short, the report recommends the deepening to 50 feet of major
    channels that lead to major container terminal areas in the Port. I
    have included in my testimony a map that shows the various channels
    included in the recommendation.
        Mr. Chairman, two questions that your Committee may have are what
    is the value of this project to the Nation and why should the Nation
    invest here. The answers lie in two places. First, as this Committee
    well knows, the purpose of an Army Corps feasibility study is to
    determine whether or not particular channel improvements derive
    national economic benefits. The Corps study found that the project
    would, in fact, realize an annual benefit totaling $238.5 million in
    national transportation cost savings. These benefits are the
    transportation cost savings that result from larger vessels being able
    to call on the Port of New York and New Jersey directly, rather than
    divert to another port only to have goods bound for the New York-New
    Jersey region trucked or railed back into the bistate area. Such a
    scenario has national consequences in terms of wear and tear on the
    nation's road and rail network, air quality, highway congestion,
    freight delivery time and overall quality of life. As you may know, a
    ship the size of the Regina Maersk carries 6000 containers, a volume
    that would require 6,000 trucks or 3,000 rail cars. Providing direct,
    all-water service into the region is both a more economical, as well as
    environmentally preferred, method of serving this market.
        But the national interest in this project goes beyond those
    numbers, significant as they are. The Port of New York and New Jersey
    is in the heart of the nation's largest and most affluent consumer
    market. Eighteen million consumers live and work in the immediate
    metropolitan region and that number swells to 80 million within 1 day's
    truck drive from our docks (or a 260-mile radius around the port). This
    area covers a ten-state region that stretches from Maine to Maryland,
    from Cape Cod Bay to the Ohio River. Add to this broad market base the
    national rail system that emanates from the region and the Port of New
    York and New Jersey directly serves the southeast, the Midwest and
    beyond. (No doubt few consumers inland of the coastal states understand
    how much seaports contribute to their quality of life.) As you can
    understand, given this broad customer base, the Port of New York and
    New Jersey is not only a regional port serving its own local market.
    Indeed, the Port continues to be a major gateway, the largest on the
    East Coast of North America, for international trade. Given the
    nation's growing involvement on world trade activities and the
    significant role that the Port of New York and New Jersey plays in that
    trade, the Nation has a significant interest in maximizing the port's
    potential to serve this national consumer demand. The same would be
    true in other major gateways on the four coasts.
        We recognize, of course, that ports throughout the Nation and
    certainly along the East Coast compete for cargo. Baltimore competes
    with Norfolk which competes with New York-New Jersey which competes
    with Los Angeles and so on. That competition is an inherent
    characteristic of our nation's ports as we reflect, among other things,
    America's economic system and principles of federalism. It is to
    Congress' credit that, after exhaustive analysis by the Corps of
    Engineers, projects are authorized on the basis of their benefits to
    regional and national economies and not to make one port or region more
    competitive than another. The emphasis is on what is good for the
    country. That is nowhere more evident than in considering that New
    York-New Jersey, Norfolk, Seattle and Boston, for example, compete with
    Canadian ports for cargo. Halifax and Vancouver are formidable
    competitors that, it is useful to note, have naturally deep water among
    other advantages.
        This competition among U.S. ports is healthy and economically
    beneficial. It ensures that port authorities, marine terminal
    operators, waterfront labor and others work to improve service, invest
    in facilities and adopt efficiencies. Those are things our customers
    expect and the consumers deserve. Channel depth is just one element of
    the investments that are made. In the case of the Port of New York and
    New Jersey, we will commit approximately $1 billion for the non-Federal
    share of the channel project that we are seeking in WRDA 2000.
    Furthermore, as described earlier, we anticipate on the order of $5
    billion to $6 billion in major investments in upland infrastructure.
        This combination of investments by Federal and local governments,
    coupled with significant private sector investment will result in a
    modernization of the Port of New York and New Jersey that will be
    better able to serve the nation, its businesses and consumers well into
    the 215 Century.
        Mr. Chairman, I would like to be able to submit additional
    information for the record. Meanwhile, I would be happy to answer any
    questions you may have.
                                     ______

     Responses of Lillian C. Borrone to Additional Questions from Senator
                                   Voinovich
        Question 1. Some interests, particularly in the environmental
    community, have questioned the need to deepen our ports to accommodate
    the latest generations of container ships indicating that the benefits
    of this deepening accrues to non-U.S. based carriers and represents
    destructive competition between U.S. ports without benefit to the U.S.
    economy.
        Response. The entire nation benefits from having access to cost
    efficient transportation services. It is true that most container
    steamship lines are foreign-flag operations. This, in our opinion, has
    no more relevance to the issue of the condition of our contemporary
    maritime channel infrastructure than to question whether it is in the
    national interest to improve our highway or airport infrastructure
    since many motor vehicles are made by foreign-based corporations and
    foreign air carriers and passengers frequent our international
    gateways. Vessel ownership is really beside the point because steamship
    lines, tankers and other vessels are not the sole beneficiaries of port
    deepening projects. Consumers who use the products they carry or
    businesses who export their goods to other companies are major
    beneficiaries. Channels are only one aspect of a system of
    transportation facilities that sustain the competitiveness of our
    economy. The nation's importers and exporters shipping their products
    and commodities through New York Harbor rely on economic transportation
    services to move their freight into and out of the global marketplace.
    That intermodal infrastructure--be it rail, highways, marine terminals,
    navigation channels or intelligent transportation technologies--
    requires productivity enhancements and capital investments to expand
    capacity and improve efficiency. The benefits of a transportation
    system serving oceanborne cargo such as we have in our region, enhanced
    by improvements in its efficiency made through investments in
    infrastructure, labor and other measures, reach beyond the ocean
    carrier to the trucker. the shipper, other affected employers and
    workers, and ultimately to consumers. And 1l there IS any question
    about who benefits by more efficient transportation modes, a simple
    test would be to reverse the investments and watch what happens both at
    the port and farther down the system where the consumer awaits the
    goods.
        As the volume of oceanborne commerce has grown, it has become
    possible to realize the significant economies of scale offered by large
    oceangoing ships. These larger capacity ships are already in service
    worldwide and more are on order as my statement notes. Deeper channels
    will translate into lower transportation costs, as these larger ships
    are able to reach container-handling facilities in the port without
    waiting for favorable tide conditions or lightering. Many of these cost
    savings, in turn, will be passed on to consumers in the form of lower
    priced goods at regional markets. In addition, American goods exported
    on larger ships can take advantage of lower transportation costs
    thereby being better able to compete in international markets.
        And what is the dimension of the benefits? The Port of New York and
    New Jersey, the largest port on the east coast, is the gateway for $72
    billion in cargo weighing 58 million long tons including more than 1.5
    million containers with goods destined for or departing from most
    states in the continental US. The Port has a primary market of 17
    million consumers in the New York/New Jersey/Connecticut metropolitan
    region and a secondary market of 81 million consumers in a 31-state
    region. The breath of transportation services provided to the nation by
    the port would indicate that the more efficient and effective our
    maritime transport is, the more beneficial it is to American consumers
    and businesses.
        Lastly, while there is competition between ports, it is generally
    for cargo that is not consumed locally. As my testimony discusses, this
    competition is healthy since as a direct result, freight rates remain
    low, services improve, labor becomes more efficient and our national
    economy benefits.

        Question 2. The deepening project recommended in the Chief of
    Engineers Report of May 2, 2000 includes deepening the Bay Ridge
    Channel into the South Brooklyn Marine Terminal. The report indicates
    that major transportation infrastructure improvements, possibly
    including a railroad freight tunnel, would be needed to realize the
    benefits of deepening the channel into South Brooklyn. In view of this
    fact, why is it necessary to authorize the deepening of the Bay Ridge
    Channel now?
        Response. The nearly 3 nautical mile long Bay Ridge Channel will be
    improved and maintained to a depth of 50 feet and a proposed turning
    basin is to be located opposite the South Brooklyn Marine Terminal.
    Authorization is sought for all channels examined and recommended in
    the Harbor Navigation Study as the Port and its intermodal
    transportation connections are recognized to function as an integrated
    system. Projections performed by the Port Authority and the City of New
    York indicate that oceanborne cargo will double within 10 years. This
    volume will far exceed the existing terminal capacity in the port,
    requiring the future expansion and development of all of the region's
    marine facilities, South Brooklyn included. Our studies documented
    that, even with terminal productivity enhancements, the Port could face
    a deficit in terminal capacity within 6 years. Leaving Brooklyn
    facilities out of current planning and development activities would
    result in a less efficient port and transportation system overall.
        The Port of New York and New Jersey functions as a single complex
    even though marine terminals are located in separate locations
    throughout the harbor. Transportation improvements necessary to
    maintain the efficient handling of maritime goods--including deepened
    ship channels, rail and road improvements--must take place in a
    comprehensive and coordinated fashion. While project authorization at
    this time enables design work to proceed for all these channels so that
    precise cost estimates can be obtained, these estimates are necessary
    to seek subsequent authorization for funding specific improvements as
    they are needed and without delay. By the same token, appropriations
    will be sought when the necessary preconditions for the Brooklyn
    project elements have been put in place.
        Specifically, construction of the channel improvement to South
    Brooklyn will be subject to a commitment to rehabilitate the South
    Brooklyn Marine Terminal and to provide the transportation
    infrastructure needed to realize project benefits.

        Question 3. I understand that there would be a significant impact
    on the movement of goods along the East Coast if the project deepening
    were not to occur. Could you summarize what the implications would be
    of not undertaking the harbor deepening project? In what ways is this
    project in the national interest?
        Response. By 2060, the number of vessel passages required to
    transport cargo through the Port would be six times the number required
    in 1996 if channels are not deepened and there was no accompanying
    change in the current vessel fleet. (If 2060 seems to be far too
    distant a projection to be relevant, one should recall that major
    infrastructure projects take decades to accomplish, from conception to
    completion, and should be designed to be of practical use for decades
    as well.) Some of the container ships that currently utilize the Port
    Jersey, the Kill Van Kull and the Arthur Kill Channels can now do so
    only under favorable tide conditions. To increase the number of vessel
    passages during the period of favorable tide by a factor of six or more
    may not be physically possible and certainly would pose a grave
    increase in the probability of accidents. Within this and the next
    decade if the deepening projects were not to occur, ocean carriers who
    are turning to a different vessel mix are likely to direct their ships
    to other US or Canadian ports that already have 50 feet and greater
    channel depths and have excellent, intermodal rail service into the
    United States.
        It is important to consider the environmental benefit of providing
    adequate channel dimensions. The movement of freight over the water is
    known to be the most efficient and environmentally benign of all modes
    of transport. One large marine vessel can carry thousands of containers
    while a 100-car train can carry 200 containers, double stacked, and a
    truck only one. Is it better to ship cargo--the volume of which is
    projected to double over the next 10 years--over interstate highways or
    even rail, or on large capacity vessels on the seas and along the
    nation's inland waterways? It also raises legitimate concerns as to the
    capacity, for example, of our interstates to handle even more tractor
    trailer rigs than already would be on the roads. That alone causes real
    concern in New York and New Jersey where the ability to add lanes and
    build new highways, especially for freight movements, is terribly
    constrained. Unnecessarily diverting containers and other freight to
    land modes would increase the cost of transporting goods to the region
    and increase congestion and pollution.
        Finally, beyond the environmental and congestion issues, the
    project is in the national interest since it lowers the transportation
    cost (by $230 million per year) of internationally shipping goods to
    and from many Northeast and Midwest states that are served by the Port
    of New York and New Jersey.

                                   __________
            Statement of R. Barry Palmer, Executive Director, DINAMO
        Good morning. I am R. Barry Palmer, Executive Director of DINAMO,
    the Association for the Development of Inland Navigation in America's
    Ohio Valley. DINAMO is a membership based regional association of
    leaders from business and industry, labor and state government whose
    singular purpose is to expedite the modernization of the lock and dam
    infrastructure on the Ohio River Navigation System. DINAMO was launched
    in 1981 because of a perceived regional need for the Federal Government
    to construct new lock and dam facilities at specific locations on the
    Ohio River Navigation System. Current modernization of the Ohio River
    Navigation System was initiated in the mid 1950's, continued for about
    20 years and was never completed. Prior to construction of new lock
    facilities at the Robert C. Byrd Locks and Dam, Ohio River, OH/WV,
    authorized in 1986, the last project authorized for construction on the
    Ohio River was the Hannibal Lock and Dam in 1964.
        We have made much progress over the last 18 years, Mr. Chairman,
    largely with the help and leadership of this committee. 15 lock and dam
    structures on the Ohio River Navigation System are under construction
    or complete. Those projects include major rehabilitation of Emsworth,
    Dashields, and Montgomery Locks and Dams, Ohio River, PA; and
    construction of the Robert C. Byrd Locks and Dam, formerly the
    Gallipolis Locks and Dam on the Ohio River, OH/W; Grays Landing Lock
    and Dam and Point Marion Lock, Monongahela River, PA; Winfield Lock
    Replacement on the Kanawha River, WV; Olmsted Locks and Dam, replacing
    Locks and Dams 52 and 53 on the Lower Ohio River, IL/KY; Monongahela
    River Locks and Dams 2,3 & 4, PA; McAlpine Lock Project on the Ohio
    River, IN/KY; Marmet Lock Replacement on the Kanawha River, WV; and
    Kentucky Lock Addition on the Tennessee River, KY.
        But the task is not finished. We are here before this distinguished
    subcommittee to urge your support in two specific areas:
        First, for all lock and dam modernization projects already
    authorized and under construction, we would urge that the currently
    scheduled diesel fuel/user tax revenues, as well as surplus of moneys
    gathering in the Inland Waterways Trust Fund, be drawn down to complete
    all lock and dam construction projects in a timely manner. In the Ohio
    Valley about $250 million is needed annually--50 percent from the
    Inland Waterways Trust Fund and 50 percent from the General Treasury to
    complete Olmsted, Lower Monongahela River 2, 3 & 4, McAlpine, Marmet,
    and Kentucky by 2008 or earlier. What is needed is funding
    predictability on efficient funding schedules of the Corps of
    Engineers.
        The private sector entered into a partnership with the Federal
    Government to fund 50 percent of the costs of a lock and dam
    modernization project by paying 20 cents per gallon for each gallon of
    diesel fuel consumed by towboats operating on America's inland
    navigation system. The private sector has met its obligations in this
    regard each and every year since the user taxes were established. What
    has been missing is a Federal Government reciprocation of its
    partnership responsibilities to pay its share of the costs for the
    nation's lock and dam modernization program.
        The construction schedule for lock and dam construction projects on
    the Ohio River Navigation System has in some instances slipped by as
    many as 6 years, primarily due to insufficient funding. Funding for
    lock and dam construction in the Ohio Valley plummeted from about $220
    million in fiscal year 1996 to $115 million in fiscal year 2000. (The
    President's Civil Works Budget for fiscal year 2000 requested lock and
    dam construction in the region at $70 million.) According to a March
    2000 report of the Institute for Water Resources, US Army Corps of
    Engineers, for the Inland Waterway Users Board more than $1.34 billion
    in transportation savings has already been washed down the Ohio River
    because of construction schedule slippage for Ohio valley projects. An
    additional $534 million of potential future benefits can be saved if
    these projects on the Ohio River System are completed by 2008 or
    earlier.
        Currently there is more than $370 million in the Trust Fund, and
    annual revenues and interest on the Trust Fund Balance is about $120
    million annually. DINAMO believes that the 20 cents per gallon diesel
    fuel tax will provide adequate revenue under the cost-sharing
    arrangements established by the Congress is the Water Resources
    Development Act of 1986 to rebuild our nation's waterways
    infrastructure.
        Secondly, we urge the leadership of this Committee to provide
    construction authorization of improvements at the John T. Myers and
    Greenup Locks and Dams, in accordance with the recommendations of the
    Interim Feasibility Reports of the US Army Corps of Engineers. The
    Division Engineers Notice will be released by the Great Lakes and Ohio
    River Division Commander this month, and a Final Report of the Chief of
    Engineers should be complete by the Fall of 2000. Mr. Chairman, we urge
    these projects receive a contingent authorization, subject to a Final
    Report of the Chief of Engineers by the end of this calendar year.
        Contingent construction authorizations for the Myers and Greenup
    projects are needed now, Mr. Chairman, because it takes a long time to
    get these lock and dam modernization projects constructed. The Olmsted
    Locks and Dam project, for example, was authorized in 1988 after 5 or 6
    years of study. It probably will not be fully operational until at
    least 2008 about 25 years of heavy lifting--if efficient funding levels
    are met. Monies for Pre-Construction Engineering and Design for both
    projects have been included in the President's fiscal year 2001 Civil
    Works Budget. So the opportunity is ripe for these projects to move
    forward in an orderly manner.
        You might also note, Mr. Chairman, that DINAMO navigation and other
    waterways interests have been sitting at the table in discussions with
    environmental representatives from the Fish and Wildlife Service. We
    have been working together with the US Army Corps of Engineers on a
    program of Ecosystem Restoration projects at more than 200 sites in
    conjunction with the Ohio River Main Stem Study. These projects include
    riverine and tailwater enhancements, embayment restoration, island
    protection/restoration, near-shore habitat restoration, and riparian
    and wetlands restoration.
        Finally we applaud the bi-partisan leadership of this committee to
    address the deplorable underinvestment in our nation's infrastructure.
    TEA-21 and AIR-21 will provide the investment America expects in our
    highways and airways. We urge the committee to focus now on the real
    problems and needs of our inland waterways and provide leadership to
    resolve our problems.
    Profile of Ohio River Navigation System, Traffic and Selected Economic
            Activity
        There are 60 active navigation locks and dams in the Ohio River
    Basin operated by the US Army Corps of Engineers. There are 20 active
    projects on the Ohio River, 9 on the Monongahela River, 8 on the
    Allegheny River, 3 on the Kanawha River, 4 on the Kentucky River, 2 on
    the Green River, 4 on the Cumberland River, 9 on the Tennessee River
    and 1 on the Clinch River. Twenty of the navigation structures are over
    60 years in age, twenty-six are between 30 and 60 years old, ten are
    between 10 and 30 years old, and four are less than 10 years old.
        The older locks date to the 1930's, and there is an increasing
    likelihood of structural failure of some of these facilities. This
    situation portends decreasing reliability. Hence there will be a need
    for increasing repair and maintenance costs, as well as closure times.
    These closure times will increase delay costs and diversion of
    commodities to other modes from closures. In 1989 the main lock at John
    T. Myers Locks and Dam was closed for major maintenance for 45 days.
    This closure cost industry an additional $15 million while transiting
    the smaller 600' x 110' auxiliary chamber. The McAlpine closure of the
    main chamber in 1997 created an average delay per tow of 4 days at an
    additional cost to industry of $12 million. Last summer closures at
    Greenup cost industry an additional $3.4 million.
        The river has always been an economic generator, and it will
    continue to be a dominant catalyst for private investment as long as we
    maintain and upgrade its infrastructure. There are over 1000
    manufacturing facilities, terminals, and docks in the Ohio River Basin
    that shipped and received about 275 million tons of waterborne commerce
    in 1998. The Port of Pittsburgh Commission recently commissioned a
    study conducted by Martin and Associates, Lancaster, PA, that estimated
    the amount of jobs that were directly, indirectly, and induced from
    49.1 tons of waterborne commerce transiting Western Pennsylvania's
    navigable rivers in 1994. The study reflected the following results:
    the positive benefits of the rivers include 120,000 jobs, or 12 percent
    of private sector employment and average employee earnings of $37,808.
    Using traffic data from 1994 and extrapolating the job information from
    the Port of Pittsburgh study to the entire Basin, a case could be made
    that jobs associated with waterborne commerce on the Ohio River
    Navigation System are more than 650,000 today.
        In 1998, almost 275 million tons of commodities moved on the
    waterways of the Ohio River Basin. These commodities had a combined
    value of just more than $32.8 billion. Coal made up more than 57
    percent of this tonnage, followed by aggregates with almost 18 percent.
    An analysis of the Ohio River Basin waterborne commerce data shows that
    almost 52 million tons of commodities were shipped on the river system
    out of the basin. A sizable portion of this tonnage (almost 23.5
    million tons) consisted of coal. Docks in the basin received just less
    than 42 million tons from outside the Ohio River System, with petroleum
    products being the largest commodity brought in. Just less than 180
    million tons moved within the basin.
        Traffic doubled on the main stem Ohio River between 1950 and 1965
    (15 years). Traffic doubled again between 1965 and 1990 (25 years).
    Traffic on the Ohio River grew 60 percent between 1983 and 1997, while
    traffic on the Mississippi River System grew 39 percent to 489 million
    tons over the same period. While the tonnage today is pegged at about
    275 million tons on the Ohio River Navigation System, the most probable
    forecast of traffic on the system will be 385 million tons by 2020 and
    500 million tons by 2050.
        Coal for Electric Power Generation: The Ohio River Basin is a major
    coal producing and power generating area. Utility companies have
    historically been attracted to a plentiful supply of water for plant
    use. The utilities also take advantage of the transportation savings
    provided by barges and the lock and dam system on the basin's
    waterways.
        The Ohio River and its navigable tributaries are the kilowatt
    highways for one of the nation's most industrialized areas, the
    corridor from Pittsburgh to St. Louis. 1998 coal shipments on the Ohio
    River basin's waterways totaled just less than 157 million tons, or 57
    percent of all barge cargo. Of this amount, more than 117 million tons
    were destined for coal-fired power plants. In 1998 this coal moved to
    47 power plants along the Ohio River and its tributaries and also to 21
    power plants in 8 states outside of the basin. Coal moving in the Ohio
    River basin destined for power plants had a value of over $4.5 billion.
        Most of the utility coal moving by barge in the Ohio River basin
    originated on the Ohio River. Some of this coal actually was mined in
    the western United States and moved by rail to docks on the Ohio River,
    where it was loaded into barges to complete the trip to power plants.
    Other significant origins for utility coal were the Monongahela River
    and the low-sulfur coal producing areas along the Kanawha and Big Sandy
    Rivers. Rivers outside the Ohio River System that received coal from
    the basin included the Mississippi, Black Warrior/Tombigbee, Panama
    City harbor, Escambia, Biloxi Harbor, Arkansas, Illinois and Neches.
        West Virginia shipped the most utility coal by water, moving over
    40 million tons of primarily low sulfur coal to 40 plants in 9 states.
    Kentucky, also a source of low sulfur coal, was next with almost 35
    million tons. Ohio's 11 power plants, which received coal by barge,
    took in almost 30.5 million tons of coal worth almost $1.2 billion.
    More of this coal (41 percent) came from West Virginia than any other
    state. Indiana was next with over 16.5 million tons of coal received by
    5 power plants, with Illinois supplying two-thirds of the tonnage.
        The most recent lock modernization project on the Ohio River was
    the building of two new lock chambers at Robert C. Byrd Locks and Dam
    (formerly Gallipolis Locks and Dam). The new 1,200' x 110' and 600' x
    110' locks located in a canal removed a major bottleneck to navigation.
    This improvement was a major benefit to the shipment of coal to power
    plants, as over 22 million tons of coal bound for power plants
    transited R.C. Byrd Locks in 1998. This was 38 percent of the total
    tonnage at these locks.
        Other recent improvements in the Ohio River Basin were at Winfield
    Locks on the Kanawha River. Winfield Locks processed over 12.5 million
    tons of utility coal (59 percent of total tons) in 1998. Navigation
    infrastructure on the Monongahela River has also been improved lately
    with new locks at Grays Landing and Point Marion Lock and Dams. In
    1997, Grays Landing moved 4.2 million tons of utility coal (87 percent
    of total) and Point Marion moved 4.1 million tons (89 percent of
    total).
        Future improvements to navigation on the Kanawha River will benefit
    utility coal shipping. A new lock 800' x 110' is planned at Marmet
    Locks, where 11.9 million tons of utility coal made up 72 percent of
    the total traffic in 1998. A major rehabilitation of London Locks will
    include an extension of the lock. London transited 6.5 million tons of
    utility coal, which was 85 percent of the total traffic.
        The Chemical Industry and the Ohio River Navigation System: The
    Ohio River basin's sixth largest commodity group is chemicals. There
    were 236 waterside chemical plants, docks and terminals in the basin
    which shipped or received chemical commodities by barge in 1998.
        As with the utility companies, chemical companies have historically
    been attracted to a plentiful supply of water and raw materials. These
    companies also take advantage of the transportation savings provided by
    barges and the lock and dam system on the basin's waterways. In the
    Ohio River Basin, important clusters of waterside chemical plants have
    developed along the lower Monongahela and upper Ohio Rivers; along the
    Ohio River from Parkersburg, West Virginia through Huntington, West
    Virginia to Portsmouth, Ohio; in the Louisville, Kentucky area and
    along in the Tennessee and Kanawha River valleys.
        Chemical plants are located along the lower Monongahela River and
    Upper Ohio for access to coal and salt deposits and chemical raw
    materials from coking plants. Plastics plants are located in the
    Parkersburg area due to the proximity to auto parts and plastics
    manufacturers. In the Huntington-Portsmouth area, much of the plant
    development was tied to the Ashland Oil refinery at Catlettsburg,
    Kentucky or the Armco Steel mill in Ashland, Kentucky. The chemical
    complex at Louisville developed during World War II, when the Defense
    Department looked for a waterside location to manufacture synthetic
    rubber. Chemical plants were also attracted to the cheap electricity of
    the Tennessee Valley and the salt, coal and mineral deposits of the
    Kanawha Valley.
        1998 chemical shipments on the Ohio River basin's waterways totaled
    just less than 10.2 million tons, or 3.7 percent of all barge cargo. Of
    this amount, more than 8 million tons were shipped into the basin from
    outside. Just over 1 million tons were shipped out of the basin, and
    almost 1.1 million tons moved within the Ohio River System. Chemicals
    are a high-value commodity. The almost 10.2 million tons moving by
    barge in 1998 had a combined value of almost $6.5 billion, which is
    over 20 per cent of the value of the basin's commodities moving by
    water.
        The largest chemical commodity that moves by barge in the basin is
    styrene, which is used in the manufacture of polystyrene for insulation
    and packaging uses and in the manufacture of synthetic rubber. Most of
    the almost 1.4 million tons of styrene which moved in 1998 originated
    in the Houston and Baton Rouge areas and moved to docks on the upper
    Ohio River. Cumene, which is used in the manufacture of acetone and
    phenols for the manufacture of products such as building materials,
    carpets, auto parts, cosmetics, and medicines is the second ranking
    waterborne chemicals. Sodium hydroxide, which is used in the
    manufacture of rayon and cellophane is another ranking waterborne
    chemical. Over 1.6 million tons of various types of fertilizers also
    move in barges.
        Most of the chemicals that moved by barge in the Ohio River basin
    originated in Texas and Louisiana. The leading basin state in chemical
    shipments was Kentucky. The main destination for chemical barges in the
    basin were plants and docks in Ohio, which received over 2.5 million
    tons. Kentucky and Alabama also received more than 1 million tons of
    chemicals each. Since 90 percent of the chemicals shipped by water in
    the Ohio River basin enter or leave the basin, the lower Ohio River
    Locks passed the most chemical tonnage in 1997. Lock and Dam 52 moved
    9.7 million tons of chemicals. Wilson Lock and Dam on the Tennessee
    River had the highest percentage of chemical tonnage, with almost 1.9
    million tons of chemicals of its 13.6 million total tons, for 13.7
    percent.
        Petroleum, Petroleum Products and the Ohio River Navigation System:
    The Ohio River basin's third largest commodity group is crude petroleum
    and products made from petroleum. There were over 250 waterside
    refineries, tank farms, pipelines, factories and terminals in the
    basin, which shipped or received petroleum or petroleum products by
    barge in 1998.
        Petroleum and petroleum product shipments on the Ohio River basin's
    waterways totaled just over 20.25 million tons in 1998, or 7.4 percent
    of all basin barge cargo. Of this amount, just less than 9.7 million
    tons were shipped into the basin from outside. Over 1.1 million tons
    were shipped out of the basin, and over 9.4 million tons moved within
    the Ohio River System. The petroleum and petroleum products that moved
    by barge in 1998 had a combined value of over $3.3 billion, which was
    over 10 per cent of the value of the basin's commodities moving by
    water. 1998 was the first year since 1979 with more than 20 million
    tons of petroleum moved on Ohio River Basin waterways.
        The largest petroleum product that moves by barge in the basin is
    gasoline. Most of the 7.5 million tons of gasoline which moved in 1998
    moved from the Huntington area to the Louisville, Cincinnati and
    Pittsburgh areas or from the lower Mississippi River into the basin.
    Distillate fuel oil is the second ranking waterborne petroleum product.
    Almost 300 thousands tons of crude petroleum moved by barge in the
    basin.
        Over 35 per cent of the grain that moved by barge in the Ohio River
    basin originated in West Virginia. Gasoline and distillate and residual
    fuel oils made up most of this tonnage. Louisiana docks shipped
    gasoline oils and petroleum coke into the basin.
        The main destinations for petroleum barges originating in the basin
    were facilities in Kentucky on the Ohio, Tennessee, Green and Licking
    Rivers. A majority of the movements to Ohio were destined for
    facilities in the Cincinnati and Marietta areas and consisted of
    gasoline, petroleum coke and distillate fuel oil as well as asphalt,
    tar and pitch.
        Since more than half of the petroleum shipped by water in the Ohio
    River basin enters or leaves the basin, the lower Ohio River Locks
    passed the most petroleum tonnage in 1998. Locks and Dam 53 moved 10.7
    million tons of petroleum and petroleum products. Almost half of this
    tonnage was gasoline and petroleum coke. Meldahl Locks and Dam, just
    upstream of the Cincinnati area, had the highest percentage of
    petroleum tonnage, with over 7.3 million tons of petroleum of its 63.7
    million total tons, for 11.6 percent.
        Grain and the Ohio River Navigation System: The Ohio River basin's
    fourth largest commodity group is grain. There were 144 waterside grain
    elevators, plants and terminals in the basin, which shipped or received
    grain by barge in 1998.
        Ohio River System waterways serve grain shippers primarily by
    affording access to the export and industrial markets for grain. These
    markets have been the most dynamic sector of the grain market and the
    strong growth in grain traffic in the basin reflects the prominence of
    these sectors in waterborne movements. Large movements of grains are
    made by water out of the basin to the export market through lower
    Mississippi River ports. The only other significant movements of barged
    grains are those to the South, most importantly to processors in the
    Tennessee River Valley.
        Grain shipments on the Ohio River basin's waterways totaled just
    less than 14 million tons in 1998, or 5.1 percent of all barge cargo.
    Of this amount, just less than 3.9 million tons were shipped into the
    basin from outside. Over 10.3 million tons were shipped out of the
    basin, and over 900 thousand tons moved within the Ohio River System.
    The 14 million tons moving by barge in 1998 had a combined value of
    over $2.7 billion, which is over 8.25 per cent of the value of the
    basin's commodities moving by water. 1998 was the fourth largest year
    on history with more than 14 million tons of grain moved on Ohio river
    Basin waterways.
        The largest grain commodity that moves by barge in the basin is
    corn. Almost all of the over 5.1 million tons of corn which moved in
    1998 fell into one of two categories: moving from the upper Mississippi
    or Illinois River to the Tennessee River for processing; or moving from
    the lower Ohio River to the lower Mississippi River for export.
    Soybeans is the second ranking waterborne grain. The leading processed
    grain product is animal feed preparations.
        Most of the grain that moved by barge in the Ohio River basin
    originated in Illinois. Corn, soybeans and animal feed preparations
    were shipped out of Illinois on the Ohio, Mississippi and Illinois
    Rivers.
        The main destinations for grain barges originating in the basin
    were export facilities in Louisiana. Within the basin, processing
    plants in Decatur and Guntersville, Alabama and Loudoun and
    Chattanooga, Tennessee were major destinations for corn and other
    grains.
        Since 94 percent of the grain shipped by water in the Ohio River
    basin enter or leave the basin, the lower Ohio River Locks passed the
    most grain tonnage in 1998. Lock and Dam 52 moved 9.76 million tons of
    grain. Watts Bar Lock and Dam on the Tennessee River had the highest
    percentage of grain tonnage, with over 800 thousand tons of grain of
    its 1.7 million total tons, for 47 percent.
    Ohio River Main Stem Study and Near-Term Investment Needs
        The Ohio River Main Stem Study, initiated within the past 5-6
    years, is intended to be an authorization document for near-term needs
    (over the near 15-20 years) and a Master Plan for long-term needs.
    During the last several years it has become clear that an additional
    eight locks and dams will become candidates for substantial capital
    improvements over the next 10 years on the Ohio River Main Stem.
    Because of a combination of factors--including forecasted traffic
    growth, the age and condition of a number of older navigation
    facilities, [and hence] normal operating transit costs, projected
    closure delay costs, and additional operation and maintenance and major
    maintenance costs we will be back to this committee several times in
    the next decade seeking construction authorization for additional
    capacity at several locations along the Ohio River. These lock and dam
    projects include, in addition to John T. Myers and Greenup Locks and
    Dams, Emsworth, Dashields, and Montgomery Locks and Dams near
    Pittsburgh; Newburgh and Cannelton Locks and Dams on the Lower Ohio;
    and Meldahl Locks and Dam on the Middle Ohio. Attached is a graph
    depicting which projects appear to be the next likely candidates for
    major capital improvements.
        More importantly, during the course of the study a clear
    justification was found for present authorization of large scale
    improvements at two Ohio River facilities namely John T. Myers and
    Greenup. The Great Lakes and Ohio River Division Commander will forward
    his notice of improvements at these locks and dams to Washington, D.C.
    We are told that a Final Report of the Chief of Engineers will be
    completed before the end of this calendar year. We are therefore asking
    the Committee to include contingent authorizations for these projects
    in this year's version of the Water Resources Development Act of 2000.
        In terms of both traffic levels and delays, John T. Myers and
    Greenup are the two busiest lock projects on the Ohio River for which
    major improvements are not already under construction (or authorized).
    In 1998 the US Army Corps of Engineers reports traffic volume through
    John T. Myers at nearly 73.6 million tons and traffic volume through
    Greenup at more than 71.8 million tons. Each facility consists of one
    1200' x 110' main lock (capable of locking 16 jumbo barges and a
    towboat in a single operation) and one 600' x 110' auxiliary lock
    (capable of locking 6 jumbo barges and a towboat in a single
    operation). The current problem is that traffic volume in the Myers and
    Greenup portions of the river are growing at such a rapid pace that the
    practical capacity of each main lock chamber will soon be overwhelmed.
    Construction of increased capacity at the auxiliary chambers of the
    John T. Myers and Greenup locks is needed soon, in order the forestall
    the need for construction of a new third 1200' x 110' lock at some time
    in the future. The US Army Corps of Engineers, Great Lakes and Ohio
    River Division, is recommending 600' x 110' extensions to the existing
    600' x 110' auxiliary locks. DINAMO concurs with these recommendations
    and has been participating fully in the Corps' process to reach this
    recommendation.
        Fewer delays also mean reduced air emissions. The Corps of
    Engineers estimates that with the John T. Myers lock extension 6.8
    million fewer gallons of fuel will be burned, 342 fewer tons of carbon
    monoxide/dioxide will be put into the air, as will 854 fewer tons on
    nitrous oxide, 171 fewer tons of hydrocarbons and 85 fewer tons of
    particulates. Lock and Dam modernization is good for the environment.
        The project cost for the John T. Myers Auxiliary Lock extension is
    about $182 million, for Greenup about $176 million. Each extension
    could be completed by 2008 if the projects were included in the Water
    Resources Development Act of 2000. The benefit/cost ratio for John T.
    Myers is 1.8, and the benefit/ cost ratio for Greenup is 2.5. It is
    important to note that the Final Interim Report of the Chief of
    Engineers for both lock and dam modernization projects will be
    completed this year. These projects should achieve final reviews and be
    included in this years' WRDA legislation.
        In summary, Mr. Chairman, we urge your leadership in providing
    construction authorization for capital improvements at the John T.
    Myers and Greenup Locks and Dams on the Ohio River, in accordance with
    the recommendations of the US Army Corps of Engineers, its Great Lakes
    and Ohio River Division, and its Louisville and Huntington Districts,
    as contained in their Interim Feasibility Reports for the projects. We
    recommend that you continue with the cost-sharing arrangements for
    these projects as established by the Water Resources Development Act of
    1986. The tax levels on diesel fuel consumed by towboats operating on
    America's inland navigation system are sufficient to fund our
    appropriate share of the costs of lock and dam modernization. The work
    of rebuilding our lock and dam system is serious business, and the
    Federal Government needs to expedite projects already under
    construction in a timely and orderly manner.
        Thank you for the opportunity to present our views on these
    matters.
                                     ______

                                     ______

        Responses by Barry Palmer to Additional Questions from Senator
                                   Voinovich
        Question 1. As you noted in your testimony feasibility reports will
    be completed this year on lock improvements at J.T. Myers and Greenup
    Locks and these projects will be eligible for authorization in this
    year's WRDA. There are recent allegations that portions of the inland
    transportation system are under utilized and don't realize the benefits
    that were projected. Can you comment on the utilization of these two
    locks?
        Response. In 1999 John T. Myers and Greenup locks and dams handled
    71 and 70 million tons of waterborne freight, respectively. In tonnage
    terms this amount ranks the John T. Myers and Greenup facilities as the
    seventh and eighth most utilized of the Federal Government's 172
    navigation locks.
        Delays typically average less than 1 hour per tow at each lock,
    except for those times when the main chamber is closed due to accidents
    or major maintenance work. Five such events have occurred at Greenup
    and two at John T. Myers in recent years. A 1999 planned main chamber
    maintenance closure at Greenup forced traffic to use the small
    auxiliary chamber for 30 days, causing delays per tow to average 21
    hours, with maximum delays reaching 46 hours per tow. A 19-day,
    unexpected closure the previous year caused tow delays to reach 70
    hours at Greenup. Main chamber closures have also occurred at John T.
    Myers. A 1989 main chamber closure of 44 days caused average delays to
    reach 48 hours per tow and an 11-day closure in 1995 caused average
    delays to reach 11 hours per tow (another closure of John T. Myers is
    scheduled for July 25 through August 4, 2000).
        We recognize the vital importance of this maintenance work and
    appreciate the efforts of the Corps to work with us in scheduling these
    events whenever possible, however, they cannot avoid these closures.
    And they cannot schedule nor prevent accidents. As long as there is a
    small auxiliary lock at these two facilities, any main chamber closure
    will result in costly delays. The extension of the auxiliary lock at
    John T. Myers and Greenup will alleviate for the towing industry and
    our customers the adverse effects that stem from these disruptive
    closures. The benefit of the proposed navigation improvements is easy
    to see in this instance.

        Question 2. The Corps economic analysis of inland transportation
    project improvements has recently been criticized for not adequately
    considering alternative modes of transportation by rail and truck. Can
    you comment on the feasibility of movement of coal and other products
    that are currently moving through the Myers and Greenup locks by
    alternative modes of transportation if these locks are not improved?
        Response. Two points are important to remember. First, the waterway
    system in the Ohio River Basin is an integral part of an intermodal
    transportation system that includes truck, rail, pipeline and
    waterborne carriers operating 365 days a year, 24 hours a day. Second,
    the Corps' regulations require them to consider alternative modes and
    costs when evaluating waterway improvements. Each study includes a
    complete transportation rate analysis that estimates the waterway cost,
    identifies the least cost alternate mode/route, and estimates the cost
    of using that alternate mode for each waterway movement in the Ohio
    River System. This analysis is a key piece of the overall,
    forwardlooking waterway system analysis that they perform.
        Again, the problem being addressed in the Myers/Greenup feasibility
    report is the insufficiency of auxiliary lock capacity during main
    chamber closures. The Corps' analysis verifies what we in the industry
    know to be true: the relatively short-duration closures of the main
    chamber at either the John T. Myers or Greenup projects are very costly
    to towboat operators, shippers, and the nation. These closures initiate
    a series of destabilizing, shipper-specific responses. A transportation
    system that was in balance makes adjustments that include rescheduling
    shipments, moving to alternate routes, swapping shipments above and
    below the affected lock, and continuing to use the lock. These reactive
    measures take time and money to put in-place, and the feasibility of
    implementing any one of them is specific to the circumstances of the
    individual shipper.
        One thing is very clear, whenever the main chamber closes,
    transportation costs will be higher. Trucking and rail companies will
    try to find more equipment by redispatching equipment away from other
    users, waterborne and overland carriers will experience additional
    logistics costs, shippers may well switch production to less efficient
    plants, and towing companies will experience higher operating costs as
    they wait to use the lock. So while feasible alternatives may exist,
    they all come at a higher cost to the nation than the best
    alternative--our inland waterways.

        Question 3. Your testimony indicates that there is more than $370
    million in the Inland Waterways Trust Fund which is the source of 50
    percent of the funding for inland waterway projects. In spite of this
    surplus you indicate that ongoing inland navigation projects are not
    being funded at a rate to achieve efficient construction schedules
    resulting in cost increases and lost benefits. What level of annual
    construction investment is needed for inland waterways? Do we need
    ``firewalls'' or similar mechanism that exist in the highway and
    airport trust funds to assure a certain level of annual funding for the
    inland system?
        We believe there are adequate funds in the Inland Waterways Trust
    Fund and projected tax revenue from the 20 cents per gallon levy on
    diesel fuel from towboats operating on America's inland navigation
    system to pay for 50 percent, or one-half, of the cost of currently
    authorized projects (and perhaps Myers and Greenup improvements) during
    this decade. About $250 million--$300 million annually could and should
    be allocated toward lock and dam modernization on America's inland
    navigation system.
        You have rightly identified that monies not appropriated for
    infrastructure investments which return a benefit to the nation's
    economy go for consumption spending. The current amount that is not
    appropriated for inland waterway investment is a raid on the Inland
    Waterways Trust Fund. Our experience has demonstrated that when these
    infrastructure investments are foregone, the tax revenue never returns
    to these programs for investment. While we have no position on the
    mechanism, we do believe that the Congress should guarantee that all
    inland waterway taxes and the general treasury matching funds for
    inland navigation infrastructure investments should be spent.
                                   __________
      Statement of Mayor Dannel Malloy, City of Stamford, Connecticut, on
     Behalf of the National Association of Local Government Environmental
                             Professionals (NALGEP)
        Good morning, Mr. Chairman and members of the Subcommittee. I am
    Dannel Malloy, Mayor of the City of Stamford, Connecticut, and I am
    pleased to testify today on behalf of the National Association of Local
    Government Environmental Professionals about the critical role of the
    Army Corps of Engineers in the revitalization of America's brownfields.
        My testimony will first explain why the Corps of Engineers' mission
    in brownfields is so important to local communities, why it is
    consistent with the Corps' existing activities and competencies, and
    why an investment by this Congress in the Corps' brownfields mission
    will bring a high return for our citizens and our environment. Second,
    I will describe the need for Corps' brownfields assistance in
    Stamford's own efforts to revitalize its abandoned brownfields in our
    downtown and along our waterfront. I will also describe examples of
    other localities where the Corps of Engineers can play a major,
    positive role in brownfields revitalization that improves the quality
    of our nation's waters. Third, I commend both the Administration and
    Senator Chafee for proposing to enhance the Corps' mission in
    brownfields revitalization, and I suggest elements for successful Corps
    involvement in local brownfields projects.
              background on nalgep and the stamford revitalization
        I am testifying on behalf of both the City of Stamford, and the
    National Association of Local Government Environmental Professionals,
    or ``NALGEP.''
        NALGEP represents local government officials responsible for
    ensuring environmental compliance, and developing and implementing
    environmental policies and programs. NALGEP's membership consists of
    more than 130 local government entities throughout the United States
    and includes many innovative communities, such as Columbus and Cuyahoga
    County, Ohio; Rochester and Glen Cove, New York; Richmond, Virginia;
    Kansas City, Missouri; Las Vegas, Nevada; Enid, Oklahoma; Casper,
    Wyoming; Miami and 18 other cities and counties in Florida; and
    Stamford, to name a few.
        In 1995, NALGEP initiated a brownfields project to determine local
    government views on national brownfields initiatives such as the EPA
    Brownfields Action Agenda. The NALGEP Brownfields Project culminated in
    a report, entitled Building a Brownfields Partnership from the Ground
    Up: Local Government Views on the Value and Promise of National
    Brownfields Initiatives, which was issued in February, 1997.
        During the past few years, NALGEP has continued its work on
    brownfields through coordinating work groups of local officials to
    address the following issues: (1) Brownfields Cleanup Revolving Loan
    Funds; (2) use of HUD Community Development Block Grants for
    brownfields; (3) partnerships between business and local government
    officials to reduce sprawl and promote smart growth; (4) brownfield
    training and education needs for localities; and (5) the
    Administration's Brownfields Showcase Community initiative. Local
    officials have testified on brownfields on behalf of NALGEP several
    times before this Committee and other Senate and House committees.
        As a result of these efforts, NALGEP is well qualified to provide
    the Committee with a representative view of how local governments, and
    their environmental and development professionals, believe the Nation
    must move ahead to create long-term success in the revitalization of
    brownfields properties.
        The City of Stamford is located on Long Island Sound, just 35 miles
    from New York City. Its diverse population consists of 111,000 people.
    Stamford has a strong corporate base with four corporations from the
    Fortune 500 and 13 Fortune 1000 corporations headquartered in Stamford.
    While Stamford is an old industrial city, settled in 1641, most of the
    historic manufacturing companies have left Stamford, leaving behind
    their contaminated industrial sites. In 1998, the City of Stamford
    became one of 16 communities nationwide to be designated a Brownfields
    Showcase Community. Showcase Communities are models of brownfields
    innovation, demonstrating how Federal agency resources can be leveraged
    together with state, local, and private sector investments to assess,
    clean up, and redevelop brownfields into high-quality communities.
        Stamford has launched two major revitalization initiatives with the
    assistance of the Corps of Engineers. Along Stamford's harbor front in
    the south part of the City, we are cleaning up long-abandoned
    brownfields and creating new manufacturing, housing, and recreational
    areas for a part of the community that has a 71 percent minority
    population with 25 percent living below the poverty line.
        One project now underway on the waterfront is the new Southfield
    Harbor Residential Community, located at a contaminated former
    shipbuilding plant and fuel deport adjacent to a City park. This
    waterfront development project will consist of approximately 320 rental
    apartment units, a 68-slip marina, and a publicly accessible
    harborwalk. The development will bring over $50 million of private
    investment and is expected to generate 100-200 construction jobs and 12
    full-time permanent jobs. This development is cleaning up a former
    industrial site, creating housing, and opening up this waterfront to
    City residents for the first time in more than 60 years.
        In addition, Stamford has launched a major initiative to revitalize
    the Mill River Corridor into a vital mixed-use district surrounding a
    new linear park along the river, which runs through the central city.
    The Mill River Corridor initiative is the centerpiece of Stamford's
    plans to create a vibrant urban center with a high quality of life
    where citizens will want to live, work, and play. Stamford views the
    revitalization of the Corridor as critical to the City's economic
    health in the 215 century. The Corridor will help attract new business,
    thereby creating thousands of new jobs. Moreover, the City's plans to
    build new affordable housing along the River is essential to ensuring
    that the City has a diverse base of workers with different skill levels
    who can fill the jobs of the new economy. The City's plan calls for:
    the creation of a new center city park in the core of downtown
    Stamford; a linear park along the river with trails for walking,
    running, and biking; 900 new units of mixed-income housing in
    residential neighborhoods surrounding the park; and new commercial
    mixed-used development to anchor both ends of the corridor. The City
    has already established a master plan for redevelopment, and made a
    substantial local investment in the Mill River Corridor project,
    including nearly $2 million of local funds for land acquisition and
    planning, with an additional $1.2 million requested in this year's
    budget.
        The Army Corps of Engineers is a critical partner in Stamford's
    harbor front and Mill River revitalization initiatives. At the
    waterfront, cleanup and redevelopment of these brownfields are hindered
    by the need for further environmental assessment, ecosystem
    restoration, harbor dredging, and other activities for which the Corps
    is well suited. At Mill River, Stamford needs assistance in a
    hydrologic study of the river in order to remedy recurring siltation,
    improve water flow, and reconfigure the flood storage area. The Corps
    could also play a valuable role in dredging, identifying and
    remediating any environmental contamination in and around the Mill
    River, and helping to restore the aquatic ecosystem. Stamford has
    engaged with the Corps on these issues already, and the agency is
    conducting a reconnaissance study to help Stamford to overcome these
    hurdles to our community revitalization. With the Corps' broad
    expertise across hydrologic, environmental, and community development
    issues, it can be an ideal partner to the City of Stamford.
         the value of the corps in community brownfields revitalization
        The Corps of Engineers can be a valuable partner in community
    brownfields revitalization because it provides services that are needed
    by local governments; a brownfields mission is consistent with the
    Corps' existing activities and competencies; and the return on a Corps
    brownfields investment will be high.
        First, the Corps involvement in brownfields will meet an urgent
    community need. As this Committee well knows, the cleanup and
    revitalization of brownfields has become a top priority for American
    communities. There may be as many as 500,000 brownfields that are
    draining our established localities of vitality, threatening the public
    health and environment, and thwarting the expansion of local economies,
    jobs, and tax base. The costs of site assessment and remediation can
    create a significant barrier to the redevelopment of brownfields sites.
    In particular, the costs of site assessment can pose an initial
    obstacle that drives development away from brownfields sites. With this
    initial obstacle removed, localities are much better able to put sites
    into a development track. In addition, the allocation of public
    resources for site assessment can provide a signal to the development
    community that the public sector is serious about resolving liability
    issues at a site and putting it back into productive reuse. Likewise,
    resources for cleanup are the missing link for many brownfield sites--a
    link that keeps brownfields from being redeveloped into productive
    areas in many communities.
        NALGEP and other organizations, like the United States Conference
    of Mayors, have identified brownfields revitalization as an important
    national need, and an area proper for Federal involvement. This
    Committee also has recognized the need for the Federal Government to
    promote brownfields cleanup through new law, new resources, and new
    liability clarification tools for the states. I can assure you that
    brownfields revitalization in Stamford represents one of my top
    priorities, and the key to many of our housing, economic development,
    and quality of life needs.
        The local need for brownfields assistance is particularly important
    along the waterways of our cities. River fronts, harbor fronts, and
    lake fronts in many local communities hold the legacy of our industrial
    heritage and the contamination left behind by these activities. So too,
    the revitalization of our waterways with commercial, residential, and
    greenspace development represents the key to the future revitalization
    of many American communities. Waterway brownfields redevelopment also
    poses a unique set of challenges for communities. The difficult issues
    of water quality improvement, ecosystem protection, flooding and
    runoff, toxic contamination, and hydrologic engineering make the Corps'
    expertise in cleanup along the nation's waterways particularly
    important.
        The second reason that Corps' involvement is brownfields
    revitalization is appropriate is that it is consistent with the
    existing mission, activities, and competencies of the Army Corps.
    Addressing contamination that could negatively impact the nation's
    waters is a natural and appropriate part of the Corps' established
    environmental mission. The Corps of Engineers is successfully cleaning
    up brownfields in dozens of American communities already, under
    authorities including the Section 206 ecosystem restoration program,
    the Section 205 environmental dredging authority, the range of flood
    control and streambank erosion programs, and targeted planning and site
    assessment activities. The Corps is also working closely with the U.S.
    Environmental Protection Agency to target Federal assistance for
    brownfields restoration. The Corps has signed a Memorandum of
    Understanding with EPA to foster interagency brownfields cooperation,
    supported a number of Brownfields Showcase Communities, and placed
    personnel at the local level to coordinate local brownfields efforts.
    Indeed, according to the Corps of Engineers, the agency is facilitating
    brownfields revitalization in more than 50 local projects nationwide.
    Although there is a critical need for clearer brownfields authority for
    Corps' involvement in this area, and a dire need for additional
    brownfields resources, the Corps' existing work demonstrates a track
    record of real success and value for American communities.
        A third reason that the Corps' role in local brownfields
    revitalization is valuable and appropriate is that this investment of
    Federal resources will yield a high return for America's local
    communities, its citizens, and our environment. Local communities have
    an opportunity to work in partnership with the Corps and other public
    and private partners to acquire valuable lands, remove the barrier of
    environmental contamination, and rebuild vibrant neighborhoods, centers
    of commerce, urban parks and recreational areas, and high-quality
    communities. Removing the barrier of contamination from our waterfront
    brownfields can help create jobs, leverage private sector resources,
    expand the tax base, reverse urban deterioration, protect health and
    public safety, slow the sprawling of our metropolitan regions, and keep
    our communities livable.
        On behalf of the many local communities that believe that the Corps
    has a constructive role to play in local brownfields revitalization, I
    encourage you to support and expand the Corps' activities in
    brownfields by creating a clear authority, and new resources, for a
    Corps brownfields mission.
      local examples of the value of, and need for, the corps brownfields
                                    mission
        There are a growing number of local examples where the Corps' role
    in brownfields is making a valuable difference. There are also a
    growing number of localities that need the Corps' assistance to deal
    with tough environmental challenges along our community waterways. In
    addition to the harbor front and Mill River projects in Stamford I have
    already described, I wish to highlight a few other examples:
        Kansas City, Kansas and Missouri--In Kansas City, Missouri and
    Kansas, the Corps has partnered on multiple local flood reduction
    studies and construction projects that have helped to revitalize
    contaminated brownfields. The Corps has provided general technical
    assistance in geographic information system (GIS) development for a
    brownfields site inventory that will allow the community to integrate
    local, state, and Federal graphical representations of properties, land
    use, and economic incentives. The Corps has also designed a riverfront
    heritage trail, which will use bike and pedestrian facilities to link
    redeveloped brownfield sites.
        In addition, the Corps has worked on specific projects, such as the
    Blue River Rechannelization Project, which is a major flood reduction
    project well along in the construction phase; and the Turkey Creek
    Project, which is now in design. The Corps of Engineers is also
    exploring the use of WRDA Section 1135 to support the restoration of a
    5 acre parcel of a degraded ecosystem at the Riverfront West site into
    a less degraded, more natural condition. These brownfields areas lie in
    flood plains and/or have been severely impacted during past flood
    events in Kansas City. By mitigating the potential of future
    catastrophic flood events, the Corps' ongoing flood reduction studies
    and projects will have a major positive impact on the economic
    viability and redevelopment potential of these brownfields areas.
        Glen Cove, New York--The Corps of Engineers has played a key role
    in the revitalization of a Superfund site and brownfields on the
    waterfront of Glen Cove, New York. Located on the north shore of Long
    Island, Glen Cove has ten miles of beautiful waterfront, three public
    beaches, 300 square acres of nature preserves, and historical mansions
    built by some of America's wealthiest business leaders. One mile of
    that waterfront is a toxic Superfund dump and brownfield site. A World
    War II era munitions plant, the Li Tungsten plant, contaminated the
    site with low-level radioactive waste. This contamination included the
    dumping of radioactive and hazardous waste at an adjacent site that
    once was a municipal dump, which is now part of the Superfund site. For
    many years, the Li Tungsten plant was a productive part of the
    community and economy. Today, Li Tungsten has no jobs, provides no
    taxes, and it no longer contributes anything to the community. The site
    stands dangerous, polluted, and abandoned.
        However, with the assistance of the Corps of Engineers, Glen Cove
    is successfully cleaning up this waterfront site, and is preparing to
    establish a premier tourist destination with a waterfront hotel and
    conference center, high speed ferry to Manhattan and other
    destinations, and a vibrant mixed-use retail center.
        The Corps has supported this project with environmental assessment,
    dredging and channel reconstruction of the Glen Cove Creek and Mill
    Pond. The Corps has also played a key role in a study of infrastructure
    and greenspace improvements that will make this a high quality
    development that protects the water quality of the community. Moreover,
    the Corps' assistance helped Glen Cove to leverage an additional $1 1
    million in Department of Transportation funding to implement these
    infrastructure and greenspace improvements.
        Cleveland and Cuyahoga County, Ohio--In the Chairman's community of
    Cleveland and Cuyahoga County, one of the nation's leading brownfields
    communities, there are a number of brownfields sites along the Cuyahoga
    River and other water sources where the Corps of Engineers, Buffalo
    District could play a valuable role. For instance, the Abrams Creek
    area near the Cleveland airport will need to be assessed for
    environmental contamination and potentially cleaned up to support
    airport expansion and economic development in the area.
        Providence, Rhode Island--In Providence, another Brownfields
    Showcase Community, the Corps has helped advance the Woonasquatucket
    River Greenway Project, which is a planned 4.4 mile greenway park and
    bicycle and pedestrian path that will include commercial and
    recreational developments. The Corps has assisted this project, which
    must overcome the problem of contamination along the riverside
    properties, by helping Providence to use computer visualization and
    landscape simulation technologies to plan and design the initiative.
        Des Moines, Iowa--The City of Des Moines is engaged in a cost-
    sharing agreement with the Corps of Engineers to conduct a flood damage
    prevention survey of the Des Moines and Raccoon Rivers. Riverpoint West
    is a 300-acre site on the north side of the Raccoon River, immediately
    adjacent to the Des Moines Central Business District. Des Moines has
    launched an initiative to clean up and revitalize the Riverpoint West
    area, which is slated for a mixed-use urban village with approximately
    1,000 residential units, 850,000 square feet of office and retail
    space, and substantial environmental and recreational improvements.
    Riverpoint West was badly flooded in 1993, and also suffers from
    significant environmental contamination challenges. Although a new
    levee constructed by the Corps of Engineers after the 1993 floods will
    help prevent future flooding, more needs to be done to protect this
    area. Des Moines is seeking to work with the Corps to conduct
    additional activities at this brownfield redevelopment site, including
    environmental site assessment and the restoration of green space,
    flora, wildlife management, aquatic and other site infrastructure.
        East Palo Alto, California--East Palo Alto is a small community of
    25,000 people that has never enjoyed the economic prosperity of its
    neighboring communities in Silicon Valley. The City has the highest
    levels of unemployment and poverty and lowest median income in San
    MateoCounty. In addition, the City has struggled hard to significantly
    reduce its crime rate, which was one of the highest in the Nation in
    the early 1990's.
        However, the City is moving forward to revitalize the community by
    cleaning up and redeveloping abandoned brownfield areas. The focus of
    East Palo Alto's effort is the Ravenswood Industrial Area and the
    adjacent Four Corners redevelopment area, totaling approximately 135
    acres. The City has developed a strategic plan and design for this
    area, which will be a mixed-use development and employment center with
    up to 2 million square feet of commercial and high-technology offices
    and light manufacturing. New, medium-density housing is also planned
    nearby. The City will seek to promote the location of environmentally
    sensitive businesses, the use of green building practices, and
    development that enhances and protects the beauty of adjacent resources
    such as San Francisco Bay, wetlands, and open space areas. The Four
    Corners portion is slated for the establishment of a new Town Square
    area including government buildings, civic space, and commercial
    establishments. The City expects that redevelopment of the entire
    Ravenswood Industrial Area will create 4,000 new jobs and generate more
    than $1 million per year in new tax revenues.
        East Palo Alto needs the Corps of Engineers' help to succeed in its
    Ravenswood revitalization initiative. East Palo Alto seeks to continue
    its cooperation with the Corps to assess and clean up environmental
    contamination. In addition, the Ravenswood area has experienced severe
    flooding from the adjacent San Francisco Bay, making flood damage
    prevention a top priority. In addition, East Palo Alto needs assistance
    in the construction of drainage, sewage, and other environmental
    infrastructure. Moreover, the Corps could assist East Palo Alto to
    protect and restore the ecosystem of the area, which includes wetlands
    and other significant natural areas, as well as the challenges of
    brownfields contamination.
        suggested elements of effective corps involvement in brownfields
        We understand that Congress is considering how a Corps of Engineers
    brownfields authority could be established, both under the
    Administration's WRDA 2000 proposal, and under Senator Chafee's S. 2335
    bill, the State and Local Brownfields Revitalization Act of 2000.
    NALGEP commends you for showing leadership on these important
    brownfields issues, and encourages you to ensure that the Corps'
    brownfields authority understands and meets the needs of local
    governments, including:
        1. NALGEP supports an approach that requires the Corps of Engineers
    to closely consult with appropriate local, state, regional, and Federal
    officials in the design and implementation of these local brownfields
    projects.
        2. NALGEP supports an approach that requires the Corps to take into
    consideration how the project will improve public health and the
    environment, encourage redevelopment of areas with existing
    infrastructure, and promote the creation or enhancement of parks,
    greenways, and recreational areas.
        3. NALGEP supports the approach of allowing local partners to meet
    their required non-Federal share of Corps brownfields projects by
    taking into account the value of land, easements, right-of-ways, and
    relocations associated with the project, as well as the value of
    assessment and remediation previously carried out by the local partner
    at the site. Land acquisition and site activity are typical,
    appropriate functions carried out by local governments, and should be
    credited toward the cost-share requirements of Corps involvement at
    these projects.
        4. NALGEP encourages an approach that reduces the required local
    cost share for those communities who have a limited ability to pay, or
    are suffering from economic distress.
        5. NALGEP also encourages Congress to clearly specify what type of
    environmental cleanup standards will apply to Corps cleanups of local
    brownfields sites, by stating that a new brownfields authority does not
    waive or limit otherwise applicable laws governing cleanups.
        6. Finally, NALGEP encourages Congress to authorize a sufficient
    level of annual resources to allow the Corps of Engineers to meet the
    large local needs for brownfields resources and assistance.
                                   conclusion
        In conclusion, NALGEP and the City of Stamford encourage Congress
    to move ahead to make the Corps' brownfields mission a part of your
    overall strategy to strengthen and empower local communities to create
    environmental quality, economic vitality, and Federal-local
    cooperation. The involvement of the Corps in brownfields revitalization
    is needed at the local level, is consistent with the Corps' existing
    mission and competencies, and will bring a high return on American
    investment. Thank you for your consideration. This concludes my
    testimony.
                                   __________
       Statement of Howard D. Marlowe, President of the American Coastal
                                   Coalition
        Chairman Voinovich and members of the Subcommittee, I am Howard
    Marlowe, President of the American Coastal Coalition. The ACC is a
    nationwide advocacy organization for coastal communities whose sole
    mission is to achieve policies that will promote the economic and
    environmental interests of coastal communities. On behalf of the ACC,
    thank you for this opportunity to testify.
        Since our establishment in 1996, our major focus has been on
    Federal policies that affect beach restoration. As you know, the
    Administration announced in 1995 that it would not support the
    authorization or funding of any beach nourishment projects which it
    deemed to be new starts. The Senate Environment and Public Works
    Committee and its House counterpart acted with force and clarity to
    reject the Administration's position when they adopted Section 227 of
    the Water Resources Development Act of 1996. That section, which we
    refer to as the National Shore Protection Act of 1996, declared it to
    be national policy that the Secretary of the Army should:

          Recommend potential shore protection projects for study
    by the Army Corps of Engineers;
          Recommend projects for congressional authorization to
    receive construction funds; and
          Recommend funding for shore protection project studies
    and construction.

        To this day, the Army Corps of Engineers has published no guidance
    on implementing Section 227 because of strong opposition from the White
    House Office of Management and Budget. Members of Congress and interest
    groups such as the American Coastal Coalition spent months negotiating
    a solution to OMB's concerns about what it claims is the excessive
    long-term cost of beach nourishment projects. The result of those talks
    was the adoption in the Water Resources Development Act of 1999 of a
    major change in the cost-sharing formula for newly authorized shore
    protection projects. That change will have non-Federal sponsors paying
    an increased share of those long-term renourishment costs. At the time
    the Senate Environment and Public Works Committee was considering that
    change, Dr. Joseph Westphal responded to your questions that the cost-
    sharing formula being considered by the Committee would result in a
    change in the Administration's no-new-shore-protection projects policy.
    Apparently, he was not speaking for the Administration because (a) the
    President in effect proposed no funding for new beach restoration
    projects in his Fiscal 2001 budget recommendations, and (b) there is
    not a single new beach nourishment study or authorization contained in
    the Administration's WRDA 2000 proposal.
        Mr. Chairman, the Administration's shore protection policy is bad
    for the national economy and the national environment. Furthermore,
    OMB's dealings with Congress on this subject have been characterized by
    an array of tactics ranging from falsehoods to bad faith. In WRDA 2000,
    OMB has taken their commitment to ignoring the will of Congress to new
    lows by failing to recognize the need for authorizing new shore
    protection projects and studies and by recommending an automatic de-
    authorization process that would have an especially harmful impact on
    existing and future shore protection projects.
    Background
        According to the U.S. Census Bureau, 54 percent of America's
    population lives within 50 miles of the coast. That number is growing
    by 3600 people a day! Millions more Americans and foreign tourists
    visit coastal communities in the warmer months. The primary attraction
    for both residents and visitors is the beach. In fact, America's
    beaches are its single biggest tourist attraction. They are also the
    source of billions of dollars of local, state and national tax
    revenues. From t-shirt vendors to banks, airlines, Realtors, and
    hotels, the beach is a major source of revenues and jobs. Beaches are
    also a unique part of America's environmental infrastructure. The sand
    that is so beautiful is also the home of many coastal animals, birds,
    and plant species. Beaches are also the best protection against wave
    damage caused by coastal storms.
        From 1955 to 1995, the Federal Government spent an average of less
    than $30 million a year to help states and local communities restore
    their public beaches. That is less than the cost of a modest-sized
    Federal highway interchange! Since 1995, this figure has increased to
    just over $85 million or three highway interchanges. That $85 million
    is out of a $4 billion budget for the entire civil works program of the
    Army Corps of Engineers.
        Beaches play an extremely important role in the economic and
    environmental infrastructure of the United States. First, beaches are
    an integral part of America's coastal infrastructure. The immense
    natural resources of the nation's coastal regions are responsible for a
    significant amount of commercial activity. In 1993, the U.S. commercial
    fishing industry produced and marketing products valued at $10.8
    billion. Saltwater recreational anglers generated $15 billion from 64
    million fishing trips. In 1990, 2.15 billion tons of cargo valued at
    more than $500 billion moved through the nation's 190 seaports.
        In 1997, total tourism expenditures in U.S. coastal congressional
    districts were more than $185 billion, while tourism payroll was almost
    $50 million and tourism jobs in these districts were more than 2.7
    million. Beaches and coastal regions are not only the Number One
    destinations for domestic tourists. They also are the top destinations
    for foreign tourists. Each year, the Federal Government receives about
    $4 billion in taxes from foreign tourists, while state and local
    governments receive another $3.5 billion. Foreign tourists spent more
    than $11 billion in Florida in 1992, $2 billion of that amount in the
    Miami Beach area alone. This Florida spending generates more than $750
    million in Federal tax revenues, more than the total received by the
    State and its local governments combined. Focusing on Miami Beach
    alone, annual Federal tax revenues from foreign tourists ($2 billion)
    are about 17 times more than the Federal Government spent on the entire
    Federal Shore Protection program from 1950 to 1993 ($34 million in 1993
    dollars). If the Federal share of beach nourishment averages about $10
    million a year, the Federal Government collects about 75 times more in
    taxes from foreign tourists in Florida than it spends restoring that
    State's beaches.
        In 1998, California's beaches generated $73 billion of direct and
    indirect benefits to the national economy. The Federal tax revenue
    portion of those benefits alone was $14 billion compared to far less
    than half a million dollars that the Federal Government spent on beach
    nourishment in that state during 1998!
        Delaware receives 5.1 million ``person trips'' each year in a state
    where just more than 21,000 people actually live in beach communities
    and another 373,000 people live within day-use travel distance. Beach
    tourism generates $173.2 million in expenditures each year. Just as
    significant, beach erosion results in an estimated loss of more than
    471,000 visitor days a year, a figure which is estimated to increase to
    more than 516,000 after 5 years. During that 5-year period, beach
    erosion will cost an estimated $30.2 million in consumer expenditures,
    the loss of 625 beach area jobs, and the reduction of wages and
    salaries by $11.5 million. Business profits will drop by $1.6 million
    and State and local tax revenues will decrease by $2.3 million.
    Finally, beach erosion will reduce beach area property values by nearly
    $43 million over the 5-year period.
        Our nation's estuaries are also major tourist and recreational
    attractions. For example, nature tourism in Corpus Christi, Texas is
    the fastest growing component of a tourism sector that generates $23
    billion annually. Recreational fishing provides aggregate net benefits
    to the area of $83 million, including $37 million per year in state and
    local taxes. The economic impact of water quality-dependent uses in
    Long Island Sound is estimated at more than $5 billion annually.
    Commercial andpara.recreational fishing contributed more than $1.2
    billion of the total, while beach going has a direct benefit of more
    than $800 million annually.
    National Shoreline Study
        At a recent hearing of this Subcommittee, the Coastal States
    Organization highlighted the importance of the National Shoreline Study
    authorized by WRDA 1999. That study will not only provide the first
    physical catalog in 30 years of the beaches in the United States that
    eroding, it will also show the economic and environmental costs of
    erosion to the nation. The ACC fully supports funding the National
    Shoreline Study. However, we regret that the Administration apparently
    is using the fact that this study has yet to be completed as an excuse
    not to recommend the authorization or funding of any new beach
    restoration projects. It is especially hard to take this excuse with
    any seriousness when we look at the paltry $300,000 appropriation for
    this study recommended by the Administration. That figure less than
    one-third of the amount of money needed in Fiscal 2001 to mount an
    effective study.
    Facts vs. Falsehoods
        Given their popularity, economic and environmental importance, and
    their storm damage reduction benefits, it is surprising that beaches
    and the communities along the coast are a perpetual target for media
    attacks. ``Playgrounds for the Rich.'' ``Disasters Waiting to Happen.''
    It's time to see how these falsehoods fair against the facts.
          Falsehood: The Federal Flood Insurance Program pays out
    more in benefits to coastal homeowners than it receives in insurance
    premiums. Fact: Homeowners in coastal states annually pay in at least
    20 percent more in premiums than they receive in flood insurance
    payments.
          Falsehood: Tens of billions of dollars are being spent in
    the ``endless'' and ``useless'' struggle to restore eroded beaches.
    Fact: Over the past 45 years, the Federal Government has spent a total
    of less than $2 billion on beach restoration. That's about $30 million
    a year. Maintaining our country's beaches is an ongoing effort, but it
    is far from useless. Studies have shown that every dollar spent to
    repair and maintain a beach produces at a very minimum $3 to $5 in
    taxpayer benefits.
          Falsehood: Spending taxpayer money on beach restoration
    is a subsidy for rich people. Fact: This class-baiting rhetoric is
    especially pernicious. Social scientists have studied America's
    beaches. They have found what any of us can conclude with our own eyes:
    With the exception of shopping malls, sandy beaches attract the most
    diverse economic, ethnic and racial populations. There is no denying
    that many of the homes located nearest to any of America's coastlines
    are owned by families with above-average incomes. But the only beaches
    that can receive Federal or state money are public beaches with public
    access.
          Falsehood: Beach restoration efforts are useless. The
    better approach is to ``let nature take its course.'' Fact: Since the
    arrival of the first non-Native Americans, humans have built
    communities and ports along the coast. Ports, navigation channels, and
    similar development have been an essential ingredient of the economic
    vitality of America. That development has interfered with the natural
    flow of sand, causing most of the beach erosion in the U.S. There is no
    way to ``let nature take its course'' without reversing the events of
    the past three centuries.
        Mr. Chairman, there are vocal groups who choose to ignore these
    facts in order to press their case that Federal tax dollars should not
    be spent on beach restoration. They have found an ally in the White
    House Office of Management and Budget. They would implement a
    purposeful policy of neglect of America's eroding coastline. None of
    these people would consider for a moment a policy of even benign
    neglect of an endangered species or a wildlife refuge. But their ``back
    to nature'' appeal is little more than proposing a policy of malignant
    neglect. By taking this position, they are threatening irreparable harm
    to an extremely important economic and environmental national asset.
        The American Coastal Coalition as well as most local coastal
    governments and private citizens want to restore America's eroded
    beaches and preserve the peoples' opportunity to use this outstanding
    environmental resource. Our preferred approach to accomplish this goal
    is to replenish the sand that has been lost because of 300 years of
    human intervention along the coast. This approach costs money, but it
    is far preferable to the cheaper alternative of building seawalls to
    protect coastal property. OMB and its fringe group allies can continue
    to attack coastal communities or they can join with us in supporting
    attainable policies that will repair the damage and encourage
    responsible growth. Calling for the clock to be turned back three
    centuries is neither responsible nor attainable.
    Section 16 of the Administration's WRDA 2000 Proposal
        The Administration's proposal for the Water Resources Development
    Act of 2000 contains a provision (Section 16) that would have the
    following impact:
        First, if construction of a water resources development project or
    separable element is not initiated within 7 years from the date the
    project or separable element was last authorized it would automatically
    become deauthorized.
        Second, those water resources development projects and any
    separable element of such a project, for which funds have once been
    obligated for construction, shall be de-authorized if congressionally
    identified appropriations have not been obligated for construction of
    the project or separable element during any five consecutive fiscal
    years.
        Currently, it takes 1 to 2 years to get a beach nourishment
    project's reconnaissance study authorized and funded; another year to
    have the study completed; another year to get the feasibility study
    funded; 2 to 3 years to get that study completed; another year to get
    the project authorized. At this point, the clock would start running
    under the Administration's proposal.
        In theory, a project ought to be able to get under construction
    within 7 years of authorization. For example, if a project is
    authorized in 2000, it should be able to get funding for actual
    construction by 2002, with environmental windows possibly holding up
    actual construction until 2003. But, most of those beach nourishment
    projects that are up for actual construction funds in fiscal year 2001
    to 2002 were authorized in the 1980's! We believe that Corps procedures
    have undergone some improvement in recent years, but many beach
    nourishment projects authorized in 1992 and 1996 [projects can only be
    authorized in years in which Congress enacts a Water Resources
    Development Act] are not likely to get construction funds until fiscal
    year 2003 or later. While the Corps needs to do better, Corps
    procedures and the Administration's refusal to budget for new beach
    nourishment projects have been significant factors in slowing down the
    time it takes to get from authorization to construction. Until the
    Administration is willing to budget for the construction of shore
    protection projects and Corps procedures improve, the 7-year automatic
    de-authorization provision may harm shore protection that are needed
    and that, by all measures, are viable.
        Every authorized Federal beach nourishment project has an economic
    life of up to 50 years. Over that life, the authorization provides for
    periodic renourishment. If the project ``performs'' well, the period
    between initial construction and the first periodic renourishment may
    be longer than the 5 years allowed by the Administration's proposal.
    The same may be true for the time period between subsequent periodic
    renourishments. That ``good performance'' would be rewarded with an
    automatic deauthorization! This is one Seal of Approval from the Feds
    that local communities don't need. Once again, the Administration's
    refusal to budget for the funding of any activity related to a beach
    nourishment project that it did not recommend in the first place also
    can hold up congressional funding for periodic renourishment.
        The American Coastal Coalition opposes Section 16 and strongly
    urges that it not be included in this Committee's WRDA 2000 bill. We
    see this proposal as another in the Administration's efforts to kill
    the Federal beach restoration program.
    WRDA 2000 Policy Changes
        There are a number of changes that can be made which will improve
    the effectiveness and efficiency of the Federal beach restoration
    program. I will summarize three of these and then emphasize a fourth
    which is actually tops on the legislative agenda of the America Coastal
    Coalition.
        Congress in WRDA 1999 has already called on non-Federal sponsors to
    shoulder a greater share of the costs of beach nourishment projects.
    Two states, New Jersey and Florida, have increased the dedicated funds
    they already had in place for these projects. Texas, California, and
    Hawaii each appropriated significant sums last year for their state's
    beach nourishment efforts. The ACC believes that more coastal states
    must make long-term commitments to fund their share of these projects.
        In many areas of the country, beach erosion has either been caused
    or exacerbated by other Federal activities, such as navigation and port
    maintenance projects. The solution is not to assign blame, but for the
    Federal Government to assume its statutory responsibility to mitigate
    the damages to beaches which these projects have caused. Unfortunately,
    there are far too many instances where the Corps of Engineers has tried
    in recent years to deny that responsibility.
        On the other hand, we applaud the Corps for efforts it is making to
    approach its coastal missions in a regionalized, integrated manner. For
    Fiscal 2000, Congress funded a regional sediment management program
    within the jurisdiction of the South Atlantic Division and the Mobile
    District Offices of the Corps which is an important effort to integrate
    the planning and execution of navigation and beach restoration
    projects. We hope that Congress will appropriate funds to begin similar
    efforts in other parts of the country in Fiscal 2001. The ACC also
    welcomes the efforts of the San Francisco Division of the Corps to
    establish a task force that puts the Corps, state agencies, local
    governments, and other interests together in a concerted effort to plan
    for the combined coastal water resources needs within its jurisdiction.
    Recreation is Not a Four-Letter Word
        There is at least one statutory initiative that can be undertaken
    in WRDA 2000 that will have a major benefit for the Federal beach
    restoration program. The American Coastal Coalition proposes that
    recreational benefits be given equal consideration with storm damage
    reduction and environmental restoration nefits in the all-important
    calculation of a project's estimated benefit-cost ratio.
        During the ``study'' phase of a beach erosion control project, the
    Army Corps of Engineers develops a plan which maximizes net national
    economic development (NED) benefits. An essential element of this plan
    is the formulation of a benefit-cost ratio (BCR). Under current budget
    policies, the Corps will not recommend the construction of any project
    whose benefits do not exceed its costs. Costs are determined by the
    outlays required to provide initial project construction and periodic
    renourishment over the life of the project. Benefits are those which
    increase the economic value of the national output of goods and
    services.
        Corps policy requires that at least 50 percent of the cost of the
    project be covered by storm damage reduction benefits. An equal amount
    of recreation benefits can be used for project justification as long as
    the recreation benefits are incidental, i.e., no additional material is
    added to accommodate recreation. ``Shore protection projects
    (particularly those featuring beachfill) are innately conducive to
    beach and shoreline recreational activities. Provided that hurricane
    and storm damage reduction benefits combined with incidentally
    generated recreation benefits limited to an amount equal to hurricane
    and storm damage reduction benefits are sufficient in themselves for
    economic justification, the Corps will propose undertaking the project
    as a HSDR project....If, in this limiting initial evaluation, a greater
    amount of recreation benefits is required to be combined with hurricane
    and storm damage reduction benefits in order to demonstrate the
    economic justification, the project is characterized as being primarily
    for recreation. As such, it will not be proposed by the Corps as a
    Federal undertaking, since recreational developments are not accorded
    priority in Civil Works decisions.'' (Emphasis added)
        There is no statutory authority for this decision by the Corps of
    Engineers to accord recreation a lower priority in its decisions
    regarding which beach restoration projects should be recommended for
    Federal authorization. This was a policy decision made by various
    executive branch entities in the mid-1980's. Whatever the basis for
    their decision, we urge this Committee to require that projects whose
    primary benefit is recreational be accorded the same budgetary priority
    as those whose primary benefit is storm damage reduction or
    environmental restoration. The 1946 law which gave the Corps authority
    to do beach restoration work states:
        ``With the purpose of preventing damage to the shores and beaches
    of the United States, its Territories and possessions and promoting and
    encouraging the healthful recreation of the people, it is declared to
    be the policy of the United States....to promote shore protection
    projects and related research that encourage the protection,
    restoration, and enhancement of sandy beaches, including beach
    restoration and periodic beach nourishment, on a comprehensive and
    coordinated basis by the Federal Government, States, localities, and
    private enterprises.'' (emphasis added)
        Federal policy should base beach nourishment assistance on the
    totality of the economic benefits it provides. To limit those benefits
    to storm damage reduction ignores the equally important economic impact
    of beach tourism, eco-tourism, recreational fishing, and other similar
    benefits.
        Prior to the 1986 law, beach restoration projects were often
    justified as recreational projects. These included major projects such
    as Miami Beach which, prior to its restoration in the late 1970's, had
    a seriously eroded beach which had resulted in a significant loss of
    revenue from tourism. The restoration of this ``recreational'' beach
    has produced billions of dollars of local, state, and national economic
    benefits which far exceed the cost of this project.
        Beaches are public parks that are part of the coastal
    infrastructure and environment. They provide recreational, storm damage
    reduction, and environmental benefits. The focus of Federal policy
    should be to restore and maintain these parks so that the public can
    use them.
        There are regions of the country (for example, the Gulf Coast
    states and Hawaii, among others) where coastlines are less developed.
    The distribution of Federal beach restoration funds is less likely to
    go to these areas because their proposed projects do not achieve a
    benefit/cost ratio that is equal to or greater than 1:1. Proposed
    projects in more-developed areas typically have no difficulty achieving
    a BCR of greater than 1:1. Neither the Army Corps of Engineers nor
    Congress favors Federal financial assistance for projects whose BCR is
    1:1 or less.
        Similarly, since ``budget policy'' as implemented by Corps of
    Engineers regulations has determined that the beach restoration program
    is one whose primary purpose is hurricane and storm damage reduction,
    it provides no assistance to public beaches (even those that are well-
    developed, such as Waikiki), where there is not a significant history
    of severe coastal storms. Much of the beach erosion throughout the
    United States is caused by the interruption of normal sand flow by
    various human-induced factors such as ports and navigation channels as
    well as dams. These facilities interrupt the natural flow of sand,
    making it difficult if not impossible for nature to repair eroded
    beaches. As noted above, the underlying Federal law states that the
    basis of Federal financial assistance should be ``preventing damage to
    the shores and beaches of the United States, its Territories and
    possessions and promoting and encouraging the healthful recreation of
    the people.'' These are the only statutory purposes determined by
    Congress which support the Federal role in beach nourishment, and they
    should not be modified by either Corps of Engineers or Administration
    policies.
        Therefore, Mr. Chairman, the American Coastal Coalition proposes
    the following change in law which we urge this Subcommittee to include
    in its WRDA 2000 bill:
    Proposed Amendment:
        Section 1. 33 U.S.C. 426 e(2) is amended as follows:

          ``(B) Recommendations for new shore protection projects
    (i) In general--
    The Secretary shall recommend to Congress the authorization or
                reauthorization of shore protection projects based on the
                studies conducted under subparagraph (A). In making such
                recommendations, the Secretary shall develop and implement
                procedures which treat recreational, hurricane and storm
                damage reduction, and environmental restoration benefits
                equally.''
        Section 2. Strike Section 103 (c)(4) of the Water Resources
    Development Act of 1986 and redesignate the following paragraphs
    accordingly.
        Explanation: Section 1 directs the Assistant Secretary of the Army
    (Civil Works) to develop and implement regulations which treat
    recreational, hurricane and storm damage reduction, and environmental
    benefits equally in determining the benefit-cost ratio for a proposed
    beach nourishment project. This would only apply to new projects.
        Section 2 strikes the provision in WRDA 1986 which establishes a
    separate, lower Federal cost-share for projects whose primary purpose
    is recreational.
    WRDA 2000 Beach Restoration Project Authorizations
        The following is a list of only those project or study
    authorizations of which we are currently aware. We believe each of
    these merits inclusion in WRDA 2000.
        Lee County, Florida: The County is seeking a modification of its
    original congressional authorization to give it status as a
    reimbursable project under Section 206 of WRDA 1992. The Corps of
    Engineers has never implemented guidance for reimbursable beach
    restoration projects, alkthough it has issued guidance for statutory
    provisions which have authorized reimbursable navigation projects. This
    lack of guidance makes it quite difficult for a non-Federal sponsor to
    proceed using the provisions of Section 206. The experience of Panama
    City Beaches, Florida, which was accorded Section 206 status in WRDA
    1996 provides a strong indication that. For those communities that can
    afford to ``front'' the Federal share of construction costs,
    significant savings can be achieved in the time it takes to complete
    construction and project cost. These are taxpayer savings at the
    Federal, state, and local levels. With respect to all types of
    reimbursable water projects, the American Coastal Coalition states its
    opposition to the funding limits placed on these projects by Section
    102 of the Energy and Water Development Appropriations Bill for Fiscal
    2000.
        Barnegat Inlet to Little Egg Inlet, New Jersey: This project is
    unfortunately a poster child for the harm that can be done by the
    Administration's ``no-new-shore-protection-projects'' policy. The
    failure to get an authorization of this project in WRDA 2000 could
    delay construction from 2002 until 2004. Delays have a price which can
    be expressed in the economic and environmental cost of increased
    erosion as well as higher construction costs caused by inflation.
        Maui, Hawaii: A significant portion of the beaches of this island
    county are suffering from erosion. There are no federally authorized
    beach restoration projects in any part of Hawaii except Waikiki. The
    beaches of Maui, just as others in Hawaii, are suffering from erosion.
    We support funding a reconnaissance study followed by a feasibility
    study which will determine how the Federal Government can partner with
    the State and the county to restore one portion of Maui's shoreline (in
    the Kihei region) fully factoring the environmental restoration and
    recreational benefits of this project.
        Cameron Parish, Louisiana: There are two projects in this parish
    where Gulf sediments that flow from east to west are being blocked by
    jetties associated with federally maintained navigation channels. One
    is on the west side of Calcasieu Ship Channel West Jetty and the other
    is on the west side of Grand Chenier West Jetty. This is an example of
    the mitigation responsibility discussed earlier in my testimony. The
    State has undertaken several surveys of the fast-eroding beach in this
    area. We recommend that a study be authorized in WRDA 2000 that will
    examine the feasibility of undertaking a beach or other type of
    shoreline restoration study.
        Section 103 Program: The Corps of Engineers needs increased
    authority to undertake Small Beach Erosion Projects under its Section
    103 Continuing Authorities program. The current authorization limit of
    $30 million a year and $3 million a project should be raised to $50
    million a year and $5 million per project. There are many projects on
    the Gulf and West Coasts, as well as Hawaii, which are likely
    candidates for this category or beach restoration program.
        San Francisco, California: Ocean Beach in San Francisco is another
    example of the need to give the Corps of Engineers authority to ``think
    outside the box'' so that it can prepare a plan to restore a beach
    which is heavily used by the public. The authorization for study this
    project (adopted by the then-House Committee on Public Works and
    Transportation on August 3, 1989) should be expanded to include
    assessing its potential to provide environmental restoration benefits
    as well as to protect public recreation and public facilities
    endangered by the erosion of the beach, regardless of whether that
    erosion is caused by storm events. This beach is an excellent example
    of a coastal public park. Its restoration should be eligible for
    Federal assistance.
        Raritan Bay and Sandy Hook Bay, New Jersey: There are several New
    Jersey Bayshore communities that are unprotected from storm damage and
    coastal erosion. Increased urbanization and loss of protective beaches
    in this particular area of the State have made low-lying residential
    and commercial structures dangerously susceptible to flooding. Port
    Monmouth and Cliffwood Beach are two segments of this project that
    should be authorized in WRDA 2000 subject to completion of a Chief's
    report.
        Dare County, North Carolina: This is also a much-needed beach
    restoration project that we recommend for authorization subject to a
    Chief's report. A feasibility study is currently being completed for
    this economically and environmentally important area of the East Coast
    shoreline.
        We ask for the Subcommittee's approval to provide information on
    additional beach restoration project provisions for WRDA 2000 as more
    information becomes available to us, and we thank the Subcommittee for
    this opportunity to present our views.
                                   __________
                                     King County, Washington,
                                         King County Executive,
                                                          May 16, 2000.

    Hon. George Voinovich, Chairman,
    Subcommittee on Transportation and Infrastructure,
    Committee on Environment and Public Works,
    U.S. Senate,
    Washington, D.C. 20510

    Dear Senator Voinovich: I respectfully request that the enclosed
    testimony on the Water Resources Development Act of 2000, written by me
    on behalf of King County, be included in the formal hearing record.
        King County has a strong interest in provisions of the bill related
    to the restoration of salmon habitat in Puget Sound and the adjacent
    surrounding waters. The County is strongly committed to the restoration
    of salmon populations in Puget Sound, listed recently under the
    Endangered Species Act (ESA). The Puget Sound Restoration Program that
    is included in the bill would provide much needed Federal assistance,
    through the U.S. Army Corps of Engineers, to our efforts for salmon
    habitat restoration in the Puget Sound area.
        Please feel free to direct questions or comments to Dennis Canty,
    Funding Coordinator, King County ESA Policy Office, at (206) 296-8394.
        Thank you in advance for your consideration.
                Sincerely,
                               Ron Sims, King County Executive.
                                     ______

        Statement of Ron Sims, County Executive King County, Washington
        Mr. Chairman and Members of the Subcommittee: My name is Ron Sims.
    I am the County Executive for King County, Washington. Thank you to,
    opportunity to testify on the Water Resources Development Act of 2000.
        King County lies along the eastern shore of Puget Sound and
    includes the cities of Seattle and Bellevue. The County has the largest
    share of the Puget Sound basin among the 14 counties that comprise the
    basin, with more than 2,000 square miles of land and 100 miles of
    saltwater shoreline within the basin.
        I respectfully request that the Subcommittee authorize the Corps of
    Engineers to participate with local agencies in planning and
    implementing ecosystem restoration projects in the Puget Sound region,
    as proposed in S. 2228 and the Administration's WRDA proposal. I
    recognize the many competing priorities that the Committee is facing in
    developing WRDA 2000, and know you will have difficult decisions to
    make about what to include in the bill. I'd like to relay why ecosystem
    restoration work in Puget Sound is a top priority to King County and
    the Pacific Northwest, and why a major national commitment to the
    effort is warranted.
        A little more than 1 year ago we had the first of what are likely
    to be many salmon stocks in Puget Sound listed under the Endangered
    Species Act. King County and our neighboring counties are the first
    major urban area in the United States to face an ESA listing of a
    species as widespread as chinook salmon. Threatened salmon swim through
    our industrial areas, our cities and suburbs, and our farms and
    forests. Can we restore the chinook salmon, a signature of the
    environment, cultural, and economy of the Pacific Northwest? Can we do
    so in a way that also protects our economy, a regional and national
    powerhouse? For the sake of the salmon, our communities, and the future
    of the ESA itself, we cannot fail.
        Salmon recovery in Puget Sound will require the rebuilding of
    salmon habitat on an unprecedented scale. One of the biggest factors in
    decline of salmon nuns in our region has been damage to habitat from
    the incremental affects of urban development, timber harvest, farm
    clearing, flood control, channel and harbor maintenance, and many other
    day-to-day activities over a century of settlement. The legacy is
    Landscape pockets of high-quality habitat but major areas spread trout
    the 17 watersheds of the Puget Sound basin where habitat has been lost
    or degraded. Restoration of this habitat is a fundamental part of our
    salmon recovery strategy.
        We need your help. King County has joined with the U.S. Army Corps
    of Engineers to cosponsor eight habitat restoration projects since
    1997, and we have found the agency to be a capable and enthusiastic
    partner. Corps assistance has allowed us to undertake habitat
    restoration projects that would have been impossible without the
    agency's technical and financial assistance. We would like to see the
    Corps' support available to communities throughout the Puget Sound
    basin.
        I am delighted that President Clinton and the Washington
    Congressional delegation have shown support for this effort through the
    Administration's WRDA bill and S. 2228. There are several elements of
    S. 2228 that I hope you will integrate into WRDA 2000. Most
    importantly, I urge you to authorize the program at the $125 million
    level proposed in S. 2228. The Puget Sound basin is large, with 17
    watersheds comprising 13,000 square miles, an area larger than the
    state of Maryland. As I've stated before, habitat restoration work is
    needed throughout the basin if we're to have any hope of saving salmon
    in Puget Sound. Spread out over 8 years and among projects with an
    average Federal cost of $1 million, the authorization of $125 million
    would allow 15 of the highest priority projects a year to be completed.
    Over the course of the program, this level of commitment would make a
    big dent in the hundreds of restoration projects that are urgently
    needed to rebuild salmon populations.
        I also recommend the provisions of S. 2228 regarding selection of
    projects under the program that direct the Corps to consult with
    Federal, state, and local agencies and use prior plans and studies to
    prioritize and select projects. These provisions will ensure that the
    program is efficient, targeted to on-the-ground results, and fully
    compatible with other restoration efforts in the region.
        The third aspect of S. 2228 that I'd like to highlight to you is
    how project costs are divided between the Federal Government and non-
    Federal sponsors. Consistent with other Corps habitat restoration
    programs, S. 2228 provides a greater Federal contribution in areas that
    are affected by a prior Corps project. In addition, S. 2228 waives part
    of the cost-sharing requirement for projects cosponsored by an Indian
    tribe. I strongly support these provisions.
        My discussions with local government, tribal, environmental, and
    business leaders around Puget Sound indicate that there is strong
    support for S. 2228 and the partnership it will create. King County and
    our neighbors around Puget Sound stand ready with funding, projects,
    and staff expertise to match the Federal commitment in this bill. King
    County alone has invested more than $60 million in salmon projects and
    programs in the last decade, and I can assure you that we are ready to
    rise to the funding challenges of this new program.
        I deeply appreciate the bipartisan support for salmon recovery
    demonstrated by the Washington Congressional delegation, and would
    particularly like to thank Senators Murray and Gorton and
    Representatives Inslee and Dicks for their leadership on this
    legislation. I'd also like to recognize and thank the other cosponsors
    of House version of this bill, Representatives Metcalf, Baird, Smith,
    and McDermott.
        Thank you for the opportunity to testify and I look forward to a
    long and fruitful partnership for the recovery of Puget Sound salmon.
                                     ______

      Statement of Chris Endresen, Commissioner Kitsap County, Washington
        Mr. Chairman and Members of the Subcommittee: My name is Chris
    Endresen. I am a Commissioner for Kitsap County, Washington. Thank you
    for the opportunity to testify on the Water Resources Development Act
    of 2000.
        Kitsap County lies within Hood Canal, and the Puget Sound basin as
    a whole. We have a vested interest in the recovery of Puget Sound
    Chinook, and Hood Canal Summer Chum. These species have all been listed
    as threatened by the National Marine Fisheries Service. Not only are
    these resources important to our economy, they are also an integral
    part of our lives in the Pacific Northwest.
        I respectfully request that the Subcommittee authorize the Corps of
    Engineers to participate with local agencies in planning and
    implementing ecosystem restoration projects in the Puget Sound region,
    as proposed in S. 2228 and the Administration's WRDA proposal. I
    recognize the many competing priorities that the Committee is facing in
    developing WRDA 2000, and know you will have difficult decisions to
    make about what to include in the bill. I'd like to relay why ecosystem
    restoration work in Puget Sound is a top priority for the Pacific
    Northwest, and why a major national commitment to the effort is
    warranted.
        Salmon recovery in Puget Sound will require the rebuilding of
    salmon habitat on an unprecedented scale. One of the biggest factors in
    decline of salmon runs in our region has been damage to habitat from
    the incremental affects of urban development, timber harvest, farm
    clearing, flood control, channel and harbor maintenance, and many other
    day-to-day activities over a century of settlement. The legacy is a
    landscape with pockets of high-quality habitat but major areas spread
    throughout the 17 watersheds of the Puget Sound basin where habitat has
    been lost or degraded. Restoration of this habitat is a fundamental
    part of our salmon recovery strategy.
        We need your help. Through the Hood Canal Coordinating Council we
    have begun working with the U.S. Army Corps of Engineers on project
    discussions and planning and have found the agency to be enthusiastic
    about our cause. Corps assistance would allow us to undertake habitat
    restoration projects that would be impossible without the agency's
    technical and financial assistance. We are anxious to see the Corps'
    support extended into areas throughout Puget Sound where they have not
    been able to work before.
        I am delighted that President Clinton and the Washington
    Congressional delegation have shown support for this effort through the
    Administration's WRDA bill and S. 2228. There are several elements of
    S. 2228 that I hope you will integrate into WRDA 2000. Most
    importantly, I urge you to authorize the program at the $125 million
    level proposed in S. 2228. The Puget Sound basin is large, with 17
    watersheds comprising 13,000 square miles, an area larger than the
    state of Maryland. As I've stated before, habitat restoration work is
    needed throughout the basin if we're to have any hope of saving salmon
    in Puget Sound. Spread out over 8 years and among projects with an
    average Federal cost of $1 million, the authorization of $125 million
    would allow 15 of the highest priority projects a year to be completed.
    Over the course of the program, this level of commitment would make a
    big dent in the hundreds of restoration projects that are urgently
    needed to rebuild salmon populations.
        I also recommend the provisions of S. 2228 regarding selection of
    projects under the program that direct the Corps to consult with
    Federal, state, and local agencies and use prior plans and studies to
    prioritize and select projects. These provisions will ensure that the
    program is efficient, targeted to on-the-ground results, and fully
    compatible with other restoration efforts in the region.
        The third aspect of S. 2228 that I'd like to highlight to you is
    how project costs are divided between the Federal Government and non-
    Federal sponsors. Consistent with other Corps habitat restoration
    programs, S. 2228 provides a greater Federal contribution in areas that
    are affected by a prior Corps project. In addition, S. 2228 waives part
    of the costsharing requirement for projects cosponsored by an Indian
    tribe. I strongly support these provisions.
        Our discussions here in Hood Canal among local governments, tribes,
    volunteer groups, fish enhancement groups, environmental groups, and
    others indicate strong support for S. 2228 and the partnerships it will
    create. We, both individually, and through the Hood Canal Coordinating
    Council, stand ready with funding, projects, and staff expertise to
    match the Federal commitment in this bill. We have invested countless
    hours of local government staff and volunteer time on salmon recovery
    efforts and projects. We know more needs to be done and are ready to do
    it with the right expertise and help. We believe that the Corps is that
    help and expertise that we desperately need in our rural area.
        I deeply appreciate the bipartisan support for salmon recovery
    demonstrated by the Washington Congressional delegation, and would
    particularly like to thank Senators Murray and Gorton and
    Representatives Inslee and Dicks for their leadership on this
    legislation. I'd also like to recognize and thank the other cosponsors
    of House version of this bill, Representatives Metcalf, Baird, Smith,
    and McDermott.
        Thank you for the opportunity to testify and I look forward to a
    long and beneficial partnership for the recovery of salmon in Hood
    Canal and the whole of Puget Sound.
                                   __________
         Lee County's Concerns with Administration's WRDA 2000 Proposal
        This paper summarizes fundamental concerns with the
    Administration's proposal based on the concepts, authorities and
    processes that would shape future water management in South Florida
    under this draft legislation. We are not, at this time, listing all of
    the specific problems we have with many of the provisions.

        1. Concern: The Administration's proposal alters the balanced
    purposes for the existing Central and Southern Florida (C&SF) Project
    and, by amending the balanced purposes that were reaffirmed in WRDA 96,
    eliminates this balance for the future of this entire project.
        Remedy: The balanced purposes for both the existing and modified
    C&SF Project should be reaffirmed while providing that the primary
    purpose of the Comprehensive Plan is ecosystem restoration,
    preservation and protection.

        2. Concern: The assurance provisions preempt Florida law governing
    water allocations and reservations and preclude comprehensive water
    management by the local sponsor. They fundamentally alter current
    Federal policy. These provisions establish unprecedented Federal water
    rights, and Federal authority and control of water quality and
    quantity.
        Remedy: Assurances can be provided by utilizing the Project
    Implementation Reports for each project component under the Plan which
    can, by agreement of the Secretary and local sponsor, and consistent
    with State Law: (1) allocate and reserve the new water supply made
    available, (2) otherwise provide for the allocation of any other
    benefits and (3) establish the component's operating criteria necessary
    to provide the allocations and other benefits.

        3. Concern: The Administration's proposal regarding Project
    Implementation Reports is vague and is inconsistent with
    representations from the Restudy team that these Reports will contain
    all the information needed for a full feasibility report and more.
    These Reports provide an opportunity to address assurance issues with a
    more complete decisionmaking document.
        Remedy: These Reports should meet the requirements of the U.S.
    Water Resources Council's Principles and Guidelines and provide all
    information needed to support Congressional authorization, approval
    under state law, and answer all questions regarding the allocation of
    benefits and achievement of Project and Comprehensive Plan purposes.

        4. Concern: The Administration's proposal authorizes specific
    project components and other undefined components ``consistent with the
    plan.'' These are all project components whose value, cost-
    effectiveness and benefits have not been demonstrated by feasibility
    level engineering, economic and environmental studies. There are no
    reliable cost estimates on which to base authorization for
    appropriations.
        Remedy: Authorize project modifications after Congress has been
    able to review a completed and fully coordinated feasibility or Project
    Implementation Report.

        5. Concern: The Administration's proposal references the Chiefs
    Report of June 22, 1999, that includes additional commitments that were
    not part of the Plan reviewed in consultation with the State and were
    included without notice or opportunity for public comment. If
    implemented, these conditions would destroy the balanced purposes of
    the Plan, have substantial adverse impacts on State interests, and
    substantially increase project costs.
        Remedy: All references to the Chiefs Report should be deleted from
    the Bill, confirming that the Plan is based on the Recommended Plan in
    the document of April 1999.

        6. Concern: The way the Administration's proposal approves the
    Comprehensive Everglades Restoration Plan.
        Remedy: Approve the Comprehensive Plan as a guide and framework for
    a continuing planning process to answer remaining environmental and
    technical questions, requiring periodic updates at the time further
    Congressional authorizations are requested.

        7. Concern: The Administration's proposal acknowledges the need for
    but does not provide a full and equal partnership between the State and
    Federal Governments.
        Remedy: In addition to deleting provisions by which Federal
    allocation of water preempts state law, the bill should provide for (1)
    equal cost sharing of the Central and Southern Florida project
    including construction of project components and operations and
    maintenance, (2) equal decisionmaking for operating protocols in PIR
    agreements and, (3) under programmatic regulation require consultation
    with, not concurrence by, the Secretary of the Interior.

        8. Concern: Compliance with water quality requirements is not
    ensured. Remedy: Require that, prior to authorization, project
    components include features necessary to ensure that all discharges
    meet applicable water quality standards and water quality permitting
    requirements.
                                   __________
         Statement of the National Association of Flood and Stormwater
                              Management Agencies
        The National Association of Flood and Stormwater Management
    Agencies (NAFSMA) is pleased to submit the following comments for
    consideration as the Subcommittee considers the Water Resources
    Development Act of 2000.
        NAFSMA represents more than 100 local and state flood control and
    stormwater management agencies serving a total of more than 76 million
    citizens and has a strong interest in this important legislation.
    NAFSMA supports this biennial process as a means to seek new projects,
    modify previously authorized projects, and to seek policy changes that
    support programs that mitigate flood losses and enhance watersheds.
        NAFSMA's members are public agencies whose function is the
    protection of lives, property and economic activity from the adverse
    impacts of storm and flood waters. The mission of the association is to
    advocate public policy, encourage technologies and conduct education
    programs to facilitate and enhance the achievement of the public
    service functions of its members. Many of NAFSMA's members are
    currently involved in ongoing water resources projects with the Corps
    of Engineers and work closely with the Federal Emergency Management
    Agency as participants in the National Flood Insurance Program.
        Since the organization was formed in 1979, NAFSMA has worked
    closely with the U.S. Army Corps of Engineers in numerous efforts. Our
    members have supported the concept of cost sharing as first authorized
    in WRDA 86 and a group of our members worked closely with the Corps to
    redesign what is now the Partnership Cooperation Agreement in the early
    1990's. We have supported new initiatives such as the Corps Challenge
    21 program as a necessary complement and vital tool to add to the Corps
    ability to meet environmental challenges in their traditional water
    resource projects.
        We urge you to consider these comments and to utilize them in your
    deliberations on WRDA 2000. We appreciate your consideration. Please
    feel free to call NAFSMA Executive Director, Susan Gilson, at 202-218-
    4133 if you have any questions or would like further information.
           nafsma comments on the administration's proposed wrda 2000
    Section 4--Watershed and River Basin Assessments
        NAFSMA supports the Corps new perspective in accomplishing its
    watershed studies that allows for multi-objective multi-purpose
    planning and investigation in the development of its watershed
    management plans.
        NAFSMA members utilize all available means (private, local, state
    and Federal programs and funding sources) in order to provide and
    maintain the flood protection projects and programs necessary to
    protect life and property. Many of the projects needed are of the scope
    and magnitude that local and state programs do not have the resources
    to implement and the Federal Government is a much-needed and valued
    partner. NAFSMA members realize that by mitigating flood losses, either
    structurally or non-structurally is a better posture for government
    than having to respond to flood disasters with Federal, state or local
    programs.
        NAFSMA supports the proposed 75 Federal/25 non-Federal sponsor cost
    sharing formula for the proposed watershed and river basin assessments.
    NAFSMA also supports the proposed authorization level of $15,000,000.
    Section 14--Structural Flood Control Cost-Sharing
        NAFSMA is strongly to the administration's proposed reduction in
    the Federal contribution to Corps-partnered structural flood control
    projects to a 50 Federal/50 local cost sharing formula.
        The NAFSMA membership strongly opposes a reduction of the Federal
    commitment to flood management projects as a tool for reducing the
    number of structural flood management projects. In many cases a
    structural project is the only viable alternative to provide needed
    flood protection for existing development. NAFSMA strongly encourages
    the committee to reject the administration's proposal and instead look
    at providing incentives for rewarding environmentally sensitive project
    components. In most cases, the local governments would opt for the
    nonstructural alternative, if the solution would provide the needed
    flood protection.
        NAFSMA supports the current Federal project cost sharing of 65
    percent Federal/35 percent local and further encourages the development
    of incentives for environmentally sensitive project components. NAFSMA
    encourages the subcommittee to allow the project cost sharing formula
    to be modified upward to 75 percent Federal/25 percent local for
    federally partnered flood control projects with environmentally
    protective features.
        NAFSMA has supported cost sharing since its inception in WRDA 86.
    The original partnership has already been altered when Congress reduced
    the structural flood control formula to 65 Federal/35 local share.
    NAFSMA urges that Congress move to reject the administration's current
    proposal, which would even further erode the partnership launched
    between the Federal and non-Federal partners in WRDA 86.
    Section 16--Project De-Authorizations
        NAFSMA also encourages the Corps of Engineers to develop guidance
    and policies for de-authorizing all or portions of federally authorized
    projects that have exceeded their useful life or in situations where
    other alternatives exist or can be implemented that provide the same
    level of benefits as the original project. Over a period of as little
    as 50 years, inevitable aging, erosion or deterioration results in
    operation and maintenance costs that equal or exceed the costs that
    would be incurred through the implementation of longer lasting, less
    costly and more environmentally sensitive alternatives.
        De-authorizing Corps projects in this manner also significantly
    decreases administrative costs for the Corps and the local sponsors
    with regard to the reporting of the condition of such projects, thus
    allowing all parties to use their chronically limited funds for actual
    public protection rather than for administrative activity.
    Section 17--Floodplain Management Requirements
        NAFSMA opposes including the language ``adopt and enforce'' after
    the word policies in Section 402 of the Water Resources Development Act
    of 1986 [100 Stat. 4133] as proposed in Sec. 17 of the Administration-
    drafted WRDA 2000 bill. Requiring the nonFederal sponsor to carry out
    enforcement activities in this area goes beyond the spirit of the
    partnership as outlined in WRDA 86 and amendments.
                                     ______

       additional nafsma issues which need to be addressed in the water
                           resources development act
        NAFSMA encourages the Federal Government to make sufficient annual
    appropriations to support those projects and programs previously
    authorized and those to be authorized.
    Feasibility Study Cost Sharing
        NAFSMA supports raising the cost sharing on feasibility studies
    from a 50 percent Federal/50 percent local share to the same 65 percent
    Federal/35 percent non-Federal share that applies to new construction
    on flood control projects. NAFSMA also supports that the local
    feasibility cost sharing requirements be met by local in-kind services.
    Project Cost Issues:
                Recognition of In-Kind Contributions
        NAFSMA would also support a change in the current provisions
    governing the percentage of cash and in-kind service that the local
    partner could use to meet the project's cost sharing requirements.
    NAFSMA urges that a provision be included to allow the entire local
    share to be met through ``in-kind'' service contributions.
                      national economic development (ned)
        NAFSMA supports a review of the current NED policy to determine if
    existing policy drives projects away from more environmentally friendly
    non-structural flood management solutions. NAFSMA members would be
    interested in participating in a national discussion on the Corps
    National Economic Development policy. NAFSMA members are concerned that
    there are projects that are multi-objective, promote river restoration
    and include environmental enhancements that don't meet the current NED
    policy. We are encouraged by the Corps' internal review of planning
    guidelines which seem to move us toward this direction.
        NAFSMA advocates the Federal Government to assure the true costs
    and benefits incurred by the local sponsor for LERRDs, construction,
    environmental mitigation, operation and maintenance are considered
    during the feasibility phase of the project. The true costs are those
    costs mandated by laws, rules and regulations of local, state and
    Federal Governments. Local governments often find themselves in
    situations where they have many additional costs to meet the local
    share, such as compliance with state and local regulations which are
    not accurately reflected in cost sharing formulas.
        NAFSMA supports non-Federal sponsors receiving full credit for all
    legitimate project related expenses, similar to credit received by the
    Corps for project related expenses.
        NAFSMA supports non-Federal sponsors receiving credit for CERCLA
    activities necessary for project execution.
    Section 211 of WRDA 96
        NAFSMA supports policies and programs that allow local
    implementation of Federal projects where advantages and effectiveness
    can be demonstrated and agreements that allow for reimbursement of the
    project's Federal share, such as Section 211 of WRDA 96.
    Corps Personnel and Permitting Issues
        NAFSMA supports and encourages the Corps of Engineers to make
    personnel available to participate with members early and throughout
    the planning, design and permitting phases of new civil works projects
    to address all environmental issues and regulations in order to obtain
    the necessary permitting in a timely and uncontested manner.
        NAFSMA urges the Committee to include language in WRDA 2000 which
    allows local agencies to augment the Corps regulatory staff. NAFSMA
    member agencies are reporting that it currently takes them 3-4 months
    to obtain a nationwide permit and 6-9 months to obtain an individual
    permit. We anticipate additional delays with the replacement permits
    put forward by the Corps to replace Nationwide Permit 26.
    Operation and Maintenance Issues
        NAFSMA members have spent considerable resources in developing and
    maintaining flood management projects. Flood management projects by
    their nature are designed to allow for a certain amount of debris and/
    or sediment before the effectiveness of the project becomes impaired.
    It is essential that maintenance activities be performed on flood
    management projects before the project nears an impairment situation.
    The original design and constructed conditions should become the
    benchmark conditions to which maintenance shall be performed. NAFSMA
    advocates normal operations and maintenance activities be allowed to be
    performed so that the flood mitigating aspects and multi-objective
    aspects of the project can be met and the community can realize the
    project benefits.
        In recent years, NAFSMA members have been experiencing more and
    more difficulty in conducting routine maintenance activities,
    especially those related to maintaining the carrying capacity of flood
    management projects. Our member agencies have experienced great
    difficulty in obtaining the necessary 404 permits needed to clear out
    vegetation and remove sediment in flood control channels. This burden
    has added great delays and increased costs to the maintenance loads of
    local flood management agencies. It also increases the risk of flood
    damage for our constituents, posing a public safety issue.
        This lack of ability to perform routine maintenance activities
    places our member agencies at odds with other Federal programs. The
    Federal Emergency Management Agency requires local governments to
    assure the maintenance of flood carrying capacity of flood control
    projects, such as enlarged channels, as a condition of revising Flood
    Insurance Rate Maps to reflect the effects of the projects. At the same
    time, the Corps of Engineers, under its 404 permit process, makes it
    more difficult and expensive for local governments to perform the
    required, and necessary, maintenance.
        NAFSMA advocates that Congress require the Corps to have all
    environmental permitting and mitigation requirements be completed and
    issued for long-term operations and maintenance activities, when a new
    civil works project is being designed and implemented to avoid future
    issues that would restrict or prohibit the operations and maintenance
    activities due to new permitting requirements.
    Section 404 Exemption Clarification
        NAFSMA also urges Congress to clarify the existing exemption
    provided under Section 404(f) of the Clean Water Act for flood
    management facilities and activities. NAFSMA has testified before the
    Committee in the past during hearings focused on wetlands permitting on
    the difficulties faced by local flood control agencies in carrying our
    their responsibilities to protect lives and property from the adverse
    impacts of flooding. It is difficult to explain to local citizens that
    their local public works or flood management agency cannot keep a flood
    control channel in working order because it is unable to obtain the
    necessary Federal permits to carry out the work in a timely manner.
    Meanwhile, an adjacent flood management channel maintained by the Corps
    of Engineers can be cleared. Congress must clarify this situation so
    that state and local flood management agencies are able to protect
    local citizens and property.
        This situation is especially difficult to understand since the
    Federal Government was a partner, and in most cases prepared the
    operation and maintenance manuals outlining the necessary work that
    flood management agencies are now unable to perform. NAFSMA urges the
    Subcommittee to investigate this issue further and although you do not
    normally review Clean Water Act related issues under WRDA, this
    particular permitting situation has created a significant public safety
    problem. Our members strongly support wetlands protection and have been
    responsible for some of the most environmentally sensitive and unique
    flood management projects, but the situation that has been created for
    state and local agencies by Federal wetlands permitting requirements is
    untenable. The Committee must help our state and local agencies meet
    their flood management responsibilities.
                  additional operations and maintenance issues
        NAFSMA urges that Congress authorize Federal funding for
    rehabilitation and repair of infrastructure constructed with Federal
    funds that has outlived its design life.
    Cooperative Agreements with Non-Federal Sponsors
        NAFSMA urges that language be included in WRDA 2000 that directs
    the Corps to enter into cooperative agreements with local or regional
    agencies having the capability to implement projects. The Federal
    Highway Administration and the Federal Emergency Management Agency have
    similar cooperating agreements with local agencies that work very well.
                                   __________
    Statement of Joseph E. Lema, Vice President, Manufacturers and Services
                     Division, National Mining Association
       summary of request for authorization of lower ohio river projects
        The National Mining Association (NMA), on behalf of NMA's member
    companies that produce coal, metallic ores, and nonmetallic minerals,
    and manufacture mining and minerals processing machinery and equipment
    urges early Congressional authorization for construction of navigation
    improvements at three lock and dam projects on the Lower Ohio River in
    the states of Indiana and Kentucky: John T. Myers, Newburgh, and
    Cannelton. Each of those projects require twin 1,200-foot by 110-foot
    lock chambers to accommodate, safely and efficiently, barge tows
    transporting coal, other minerals, and other bulk commodity traffic at
    current and projected traffic levels. When those three projects are
    completed, together with the Olmsted and McAlpine projects under
    construction, and the existing, modern Smithland project, the Lower
    Ohio River from Louisville, Kentucky to the mouth of the Ohio River at
    its junction with the Mississippi River at Cairo, Illinois, will have
    uniform twin 1,200-foot by 110-foot lock chambers at all of the Lower
    Ohio River lock and dam projects, enabling smooth flow of barge tows
    through that high traffic segment at the heart of the inland waterways
    system.
        From 1986 to 1996, according to data furnished by the U.S. Army
    Corps of Engineers, the Ohio River experienced a 2 percent growth rate
    annually in total traffic, incorporating annual growth rates of 2
    percent for coal traffic, 4 percent for aggregates, and 10 percent for
    other ores and minerals, among other commodity traffic. Coal traffic,
    in particular, is very high, and is expected to increase at an annual
    rate of two or more percent into the next two decades. In 1996, coal
    traffic was more than 56 percent of total freight tonnage on the Ohio
    River.
        Uniform, twin 1,200-foot by 110-foot lock chambers are required at
    the John T. Myers, Newburgh, and Cannelton projects, like the chambers
    existing today at the Smithland project, and under construction at the
    Olmsted and McAlpine projects for three overriding reasons:

        1. Serious delays encountered by barge tows in passage through the
    locks and dams result in losses of $250 to $350 per hour.
        2. When a single existing 1,200-foot by 110-foot lock chamber is
    closed for maintenance and repairs, often several days or weeks, barge
    tows must use a smaller 600-foot by 110-foot lock chamber,
    necessitating a breakup of the barge set with incremental movements of
    portions of the barge set through the smaller chamber resulting in
    delays and safety risks.
        3. The Lower Ohio River, including its junctions with the Tennessee
    and the Mississippi Rivers, is characterized by requiring an
    exceptionally high number of lockages for barge tows regularly.
    Construction of Navigation Improvements Is Warranted and Timely at
            Selected Lock and Dam Projects on the Lower Ohio River
        The Ohio River's barge shipping channels and lock and dam projects
    that control commercial navigation by barge tows from the mouth of the
    Ohio River at its junction with the Mississippi River at Cairo,
    Illinois to its origination at its junction with the Allegheny and
    Monongahela Rivers at Pittsburgh, are strategically important assets in
    the freight transportation network of the United States. The River is
    utilized extensively for the distribution of bulk commodities,
    including coal and other minerals, in a corridor from Pennsylvania to
    Missouri. Through interconnection with the Mississippi River and the
    Tennessee River, it further enables barge tows on the Ohio River to
    handle bulk shipments originating or terminating in a corridor from
    Minnesota to the Gulf of Mexico and points in the Southeast accessible
    using the Tennessee River. The influence of the Ohio River for
    commercial navigation also extends to states located west of the
    Mississippi River, in particular coal-producing states from which
    railroads connect mines with river terminals for intermodal rail-barge
    transportation.
        Following enactment of key legislation on policies with regard to
    cost-sharing of inland waterway construction and rehabilitation in the
    Water Resources Development Act of 1986, much has been accomplished
    toward upgrading inland waterways navigation, including several lock
    and dam improvement projects at sites on the Ohio River and segments of
    connecting rivers, i.e. the Monongahela, Kanawha, and Tennessee Rivers,
    to aid intermodal truck-barge and rail-barge traffic serving commerce
    in the Ohio River Basin. Particular attention should be given to
    improvement of navigation at selected lock and dam projects on the
    Lower Ohio River from Louisville to Cairo, Illinois where the Lower
    Ohio River junctions with the Mississippi River, a stretch of the Ohio
    River that includes its junction with the mouth of the Tennessee River
    at Paducah, Kentucky. This especially significant hub for
    interconnected river barge traffic includes portions of three
    commercially navigable waterways, namely:

          the Lower Ohio River from Louisville to Cairo, Illinois;
          the Upper Mississippi River from Cairo, Illinois to its
    junction with the Illinois River north of St. Louis; and
          the Tennessee River from its junction with the Ohio River
    at Paducah, Kentucky southerly into the Tennessee Valley.

        That hub for river barge traffic is especially significant for
    several reasons:

        1. River barge traffic is substantial, with much of the barge tows
    carrying coal consumed for power generation at utility plants located
    on the rivers and other minerals and aggregates required by the
    construction industry.
        2. The Lower Ohio River, the Tennessee River, the Upper Mississippi
    River, and the Illinois River are interconnected for barge traffic.
        3. Modern rail-to-barge unloading, storage, and barge loading
    terminals are in place for use in coal transfer operations for coal
    mined in the Illinois Basin and in the Powder River Basin and other
    coal-producing areas of the western states.
        4. Eastern coal has ready access to power plants located on the
    Lower Ohio River, the Tennessee River, the Mississippi River, and the
    Illinois River, as well as to port terminals located on the Gulf Coast,
    in barge tows originating on the Kanawha, Monongahela, Big Sandy, and
    Upper Ohio Rivers serving coal-producing areas of the eastern states.
        5. Barge lines operating on the Ohio, Mississippi, Illinois, and
    Tennessee Rivers through this hub for river barge traffic are well
    equipped with modern towboats and barges and available today for
    competitive, fuel-efficient transportation services.
    A Systematic Approach Should be Followed in Upgrading Obsolete
            Navigation Structures and Lockage Systems on the Lower Ohio
            River
        It must be recognized that lock and dam projects on the rivers
    serve many purposes: flood control, water supply, commercial navigation
    and recreational boating, along with maintaining adequate depths of
    shipping channels, i.e. 9 to 14 feet for shallow-draft river barge tows
    depending on location. Of course, a critical factor for commercial
    navigation by barge tows is the adequacy of lockage chambers to
    accommodate passage of barge tows in a time-sensitive manner, much like
    the efficiency of at-grade surface highways depends highly on the time
    allocated at signalized intersections for ``platoons'' or queues of
    vehicles. For river navigation, the dimensions of a lock chamber and
    the number of lock chambers at a lock and dam project are controlling
    factors with regard to the efficiency of barge traffic. On the Ohio
    River, the standard for lock chambers is 1,200 feet long by 110 feet
    wide dimensions required to accommodate a barge tow in a single pass
    through the site for a towboat pushing 15 jumbo barges lashed three
    across and five in line with the lock chamber and shipping channel.
    Lock and dam projects with smaller lock chambers and projects having
    only one chamber of the standard size that must be taken out of service
    at times for maintenance and repair operations, requiring use of a much
    smaller auxiliary lock chamber only 600 feet in length, cause tows with
    15 barges to be broken into sections of barges so that the total set
    can be moved through the lock chamber in segments resulting in
    significant delays and safety risks that would not be encountered if
    the lock chamber had standard 1,200-foot x 110-foot dimensions. An
    examination of lock chambers on the Lower Ohio River and the Ohio River
    gateway to the Tennessee Valley where the demand for standard 15-barge
    tows is high indicates a systematic approach should be followed in
    upgrading obsolete navigation structures and lockage systems on the
    Lower Ohio River.
        Eight lock and dam projects--seven on the Lower Ohio River from
    Louisville to Cairo, Illinois and one on the Tennessee River just
    upstream from its junction with the Ohio River at Paducah, Kentucky--
    are involved in this analysis. It is noteworthy that there are no lock
    and dam projects on the Upper Mississippi River above Cairo, Illinois
    where the Ohio and Mississippi Rivers join, northerly above St. Louis
    at a point where the Mississippi River junctions with the Illinois
    River.
        The current construction authorized at the Olmsted and McAlpine
    projects on the Lower Ohio River and at the adjoining Kentucky project
    on the Tennessee River, like the completed Smithland project on the
    Ohio River, is indicative of the need for twin 1,200-foot by 110-foot
    lock chambers similarly at the John T. Myers, Newburgh and Cannelton
    projects just upstream on the Lower Ohio River, points where
    complementary navigation requirements are warranted to add a second
    1,200-foot by 110-foot lock chamber compatible with modern barge tows
    operating through the zone. The Olmsted project itself replaces two
    obsolete projects at Lock and Dam 52 and Lock and Dam 53 on the Lower
    Ohio River.

                                          Annual Traffic Characteristics--1996
    ----------------------------------------------------------------------------------------------------------------
                                                                           Annual       Average Time/Tow (minutes)
           Lock & Dam Projects Ohio & Tennessee Rivers          No. of      Tons    --------------------------------
                                                                 Tows    (millions)    Delay     Process    Total\1\
    ----------------------------------------------------------------------------------------------------------------
    Ohio River L/D 53 and L/D 52, both to be replaced by       9,901\2\        94.1        n.a        n.a    93.5\2\
     Olmsted L/D............................................
    Smithland...............................................      7,866        85.1        8.2       44.1       52.3
    John T. Myers\3\........................................      6,592        77.6       43.7       47.8       91.5
    Newburgh................................................      6,686        68.3       44.8       47.1       91.9
    Cannelton...............................................      5,025        56.8       39.7       56.0       95.7
    McAlpine................................................      4,900        54.0       52.8       55.9      108.7
                         Tennessee River
    Kentucky L/D............................................      3,401        33.5      347.4      118.8      466.2
    ----------------------------------------------------------------------------------------------------------------
    \1\total time per tow = delay and time for processing through lock.

    \2\In 1996 8,158 tows passed over wicket dam under flood conditions.

    \3\Uniontown L/D was renamed John T. Myers L/D during 1997.

    Source: Ohio River Navigation System: 1997 Statistical Supplement, U.S. Army Corps of Engineers, Huntington,
      District

        Barge traffic demand on the Lower Ohio River from the vicinity of
    Louisville, Kentucky to Cairo, Illinois at the junction of the Ohio and
    Mississippi Rivers justifies having in place a uniform system of lock
    and dam projects each having twin 1,200-foot x 110-foot lock chambers,
    the standard size for modern Ohio River barge tows. Seven lock and dam
    projects are involved. The first project moving upstream from the mouth
    of the Ohio River at Cairo, Illinois is the Olmsted Project which
    replaces the obsolete L/D 52 and 53 at a new site between the junctions
    of the Lower Ohio River with the Mississippi and the Tennessee Rivers.
    The Olmsted Project is now under construction and will have twin 1,200-
    foot x 110-foot lock chambers when completed.
        Moving upstream, the next facility is the Smithland Project where
    twin 1,200-foot x 110-foot lock chambers are now in place. It is
    significant that lock and dam projects upstream from the Smithland
    Project, in 1996, required that barge tows, on the average, consume
    more than 90 minutes to transit the site, including 40 minutes or more
    in waiting for entry into a lock chamber and 45 to 55 minutes for
    clearing passage through the project. On the other hand, at the modern
    Smithland Project barge tows completed lockages in approximately 52
    minutes, including only 8 minutes of delay.

                                       -