[Senate Hearing 108-]
[From the U.S. Government Publishing Office]



 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              


                        WEDNESDAY, MARCH 5, 2003

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Thad Cochran presiding.
    Present: Senators Cochran, Stevens, Bennett, Craig, Bond, 
Reid, Murray, and Dorgan.










                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

STATEMENT OF HON. LES BROWNLEE, UNDER SECRETARY OF THE 
            UNITED STATES ARMY AND ACTING ASSISTANT 
            SECRETARY OF THE ARMY (CIVIL WORKS)
ACCOMPANIED BY:
        LIEUTENANT GENERAL ROBERT B. FLOWERS, COMMANDER AND CHIEF OF 
            ENGINEERS, U.S. ARMY CORPS OF ENGINEERS
        MAJOR GENERAL ROBERT H. GRIFFIN, DIRECTOR OF CIVIL WORKS


               opening statement of senator thad cochran


    Senator Cochran. The committee will please come to order. I 
have been asked to Chair the hearing by Senator Domenici, and I 
am happy to do that. I have a statement that he and his staff 
have prepared and I will ask unanimous consent that it be 
inserted at this point in the record.
    [The statement follows:]
             Prepared Statement of Senator Pete V. Domenici
    The Committee will please come to order.
    Today we begin the Energy and Water Subcommittee's fiscal year 2004 
budget hearings with the Corps of Engineers and the Bureau of 
Reclamation. There will be two panels, and as the Subcommittee's 
tradition dictates, this year we will begin with the Corps of Engineers 
in the first panel and the Bureau of Reclamation in the second panel.
    This Subcommittee has jurisdiction over our country's water 
resources, under which falls the Corps of Engineers and the Bureau of 
Reclamation. Both agencies are responsible for managing this precious 
natural resource in a cost-effective manner while balancing the needs 
of its diverse users. I believe that the mission of these two agencies 
will only become more critical over time, as increasing pressure is 
placed on our water resources.
    For fiscal year 2004 the President has requested an effective 
amount of $4.049 billion, a decrease of $580 million, or 13 percent, 
from the current year for the Corps of Engineers. For the Bureau of 
Reclamation, the President has requested $880 million, a decrease of 
$73 million or 8 percent from the current year. Unfortunately, this is 
a budget request that only exacerbate problems this Nation faces in 
addressing our various water resource requirements.
    I have had first-hand experience of this over the last year as the 
state of New Mexico struggled to balance various water users, people, 
agriculture and endangered species, during a very serious drought. And 
we will unfortunately continue to struggle as New Mexico is at less 
than half of our annual snowpack for this year.
    That being said, I am concerned that the Administration, in its 
fiscal year 2004 request, has under-funded the Corps of Engineers to 
such an extent that I question whether it could effectively carry out 
its mandated missions next year if this request were enacted in its 
current form.
    An additional concern to me is the Administration's approach to the 
Corps of Engineer's budget. The Administration's budget documents 
relating to the Corps of Engineers state:

    ``While the level of funding can affect the rate at which the size 
of the backlog changes, the measures taken (or not taken) to limit the 
number of projects that become eligible for construction ultimately 
will determine whether we are making progress or are falling further 
behind.''

    Unfortunately, this logic does not take into consideration the 
issue of need. There is a clear role for the Federal Government, 
through the Corps, to carry out flood control, commercial navigation 
and ecosystem restoration. These needs do not simply go away because 
you choose to limit what is constructed.
    I think the Administration is missing the point that this country's 
economic well-being is closely linked to its waterways, be they rivers, 
harbors, or wetlands. Further, it is in our interest to ensure that we 
maintain these resources for our continued successful competition 
within the world marketplace.
    This country has an aging water resources infrastructure. For 
example, approximately 50 percent of the Bureau of Reclamation's dams 
were built from 1900 to the 1950's, before the current state-of-the-art 
construction techniques, therefore they require special maintenance 
measures.
    Even though budgets are tight, I am concerned that no one is 
working to address this longer term problem. An aging infrastructure is 
one of those problems that we all put off until we absolutely have to, 
which in the end, will just cost us more and may very well endanger 
life and property.
    More importantly, the budget exercise we go through each year is 
not an effort to figure out how little we can spend, but one that 
carefully balances the greatest needs with our limited resources.
    I would like to talk today about the impact the proposed fiscal 
year 2004 budget will have on both agencies and what the Congress can 
do to ensure that they can continue to effectively manage the country's 
water resources.
    I would like to welcome the members of the first panel from the 
Corps of Engineers. They are:
  --Undersecretary of the Army and Acting Assistant Secretary for Civil 
        Works, Les Brownlee,
  --Lieutenant General Flowers, Chief of Engineers,
  --Major General Griffin, Director for Civil Works, and
  --Rob Vining, Chief, Programs Management Division.
    Also here with us today are some of the Corps' Division Commanders. 
They are:
  --Brigadier General Larry Davis, South Pacific Division,
  --Brigadier General Bo Temple, North Atlantic Division, and
  --Brigadier General David Fastabend, Northwest Division.
    Thank you all for being here today and for the work you do for this 
Nation.
    On our second panel will be the Bureau of Reclamation. Appearing 
before us will be:
  --Bennett Raley, Assistant Secretary for Water and Science with the 
        Department of Interior,
  --Commissioner of the Bureau of Reclamation, John Keys, and
  --Program Director Ronald Johnston from the CUP Office.

    Senator Cochran. This morning we are hearing from two 
panels, the Corps of Engineers, Bureau of Reclamation 
presentation of the budget request for this next fiscal year. 
We are happy to have as members of the first panel, Secretary 
or Under Secretary Les Brownlee of the United States Army. He 
is accompanied by Lieutenant General Robert B. Flowers of the 
U.S. Army Corps of Engineers and Major General Robert Griffin, 
Director of Civil Works. And we appreciate the attendance of 
Senators.
    And without a lot of conversation, let me just say that I 
have reviewed the highlights of the budget that is being 
submitted by the administration for the Corps of Engineers, and 
I am disappointed that there are many important areas that seem 
to me to be inadequately funded if we were to approve this 
budget request without any changes.
    And some of those, I am sure members of the committee will 
look at very carefully. And I am also interested just as a 
matter of introduction in some of the reforms that are being 
suggested for the Corps of Engineers, and the way projects are 
evaluated and the process that is followed in determining when 
construction is appropriate for projects, for flood control 
projects in particular.
    And I will be interested in hearing your views about those 
reforms and the degree to which you can inform us about the 
details and how they will really work in practice.

                           PREPARED STATEMENT

    Without a lot of other comments, I will put my statement in 
the record, and yield to other Senators for any opening 
comments they would like to make.
    [The statement follows:]
               Prepared Statement of Senator Thad Cochran
    Mr. Chairman, I join you in welcoming the witnesses before the 
Committee.
    I appreciate the hard work the Corps of Engineers does in the state 
of Mississippi and around the country in carrying out its 
responsibilities.
    While the Corps has taken on the added responsibilities of 
assessing the national water resources and protecting Civil Works 
infrastructures from possible terrorist attacks, its core mission 
remains. Corps levees and floodwalls protect millions of homes, farms, 
and businesses. Its coastal ports and barge channels carry 2 billion 
tons of freight annually, and its dams generate one-fourth of this 
nation's hydroelectric power.
    For the individuals in my state who live in areas susceptible to 
flooding, Corps of Engineers' projects are critical to protecting their 
homes, businesses, and livelihoods.
    I am very concerned that this budget submission shortchanges these 
programs. I'm sure this committee will try to identify ways to make 
improvements in this budget for flood control.
    I hope that the leadership in the Department of Defense and our 
witnesses will assist us in determining which projects have the highest 
priorities and are ripe for funding.
    I look forward to hearing the testimony of our witnesses.

    Senator Cochran. Senator Craig.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Thank you very much, Mr. Chairman. Let me 
echo the same frustration you have with the Army Corps' budget. 
Clearly there is a lot of work to be done out there, and we 
hope we will be able to assist them in getting most of it done.
    The Army Corps and those of us who live in the Pacific 
Northwest are very frustrated at this moment at the inability 
of the Corps to manage the Snake/Columbia River complex in the 
way necessary to be managed for navigation. We have got a 
lawsuit we are working through out there that disallows 
dredging for the moment. Some judge turned too green on us, and 
we have got to work our way through it.
    We have got fish runs coming back. We have got a river that 
is being managed extremely well at the moment. Everything is 
generally looking up on that river, except the inability to 
effectively manage it as a waterway for very important traffic 
in the Snake/Columbia River Basin systems.
    Everybody wonders why I am interested in the Corps. I do 
not think a lot of people realize that I have the furthest in-
land sea port in the United States in North Idaho, and it is a 
critical economic link to our State.
    Senator Reid. What is it, Larry? Which one is it?
    Senator Craig. Port of Lewiston. It is at the upper end of 
the slack water systems of the Snake and the Columbia system, 
and handles a lot of traffic, a lot of forest products, and 
grain out of Montana and the upper Midwest. So it is a very 
important link.
    And at this time, the Corps is not being allowed to do what 
they should be doing because of the Ninth Circuit. Once again, 
we come to the floor frustrated by a dysfunctional court system 
that decides that they are going to deal politically instead of 
legally with the world. Anyway, I have said enough. We are 
anxious to hear from them.
    Les, it is great to have you back in your capacity now, 
your new capacity. You have had great experience here on the 
Hill. We have enjoyed working with you in the past on a lot of 
issues. We will enjoy working with you now in your position as 
Under Secretary, and we will also look forward to the--hearing 
from the Bureau of Reclamation, another critical agency to 
western States.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator Craig.
    Senator Reid.

                    STATEMENT OF SENATOR HARRY REID

    Senator Reid. Thank you very much, Senator Cochran. I 
appreciate your filling in today.
    First of all, Larry, Senator Craig, because there were a 
number of statements made on the floor yesterday about the 
terrible Ninth Circuit, which as you know, you and I are both--
it is our jurisdiction. And 24 judges sat on that rehearing. 
The opinion was written by a judge appointed by a Republican, 
the initial opinion. And of the ten dissents, which was 
something we wanted--of the ten dissents, seven of them were 
Clinton-appointed judges. If we had had six other judges who 
had been appointed by the Republicans, who had voted with us, 
we would have won that.
    So I think the Ninth Circuit was certainly all way off base 
on this, but I would hope that we would stop blaming it on 
Democratic appointees, because it was----
    Senator Craig. Well, if you noticed, I did not. I was very 
generic in talking of the dysfunctionality of the Ninth 
Circuit. The Supreme Court has already decided long ago that 
you either fix it or they will just simply rule most of their 
decisions out.
    Senator Reid. The problem is, Larry, that they have so many 
cases that the Supreme Court does not hear all their cases.
    Senator Craig. Oh, that is the great tragedy for those of 
us who live in the greater Northwest.
    Senator Reid. Anyway----
    Senator Craig. I see Senator Murray here. I think she 
supports us on a lot of these frustrations.
    Senator Reid. Senator Domenici and I have worked on this 
subcommittee for many, many years, and I have enjoyed working 
with him. He is a very--he is a friend, and does an outstanding 
job in his capacity in being a Senator.
    These hearings are intended to help us prepare our funding 
proposals. We depend on the open exchange of information we 
receive in these hearings. Most importantly we will develop our 
appropriations bill by taking into account the needs of our 
members and the needs of the American people.
    The budget that OMB submitted for the Army Corps is totally 
inadequate. It continues a recurring theme of trying to mask 
deficit spending with funding gimmicks. The administration has 
proposed a fiscal year request for the Army Corps of $4.04 
billion. When you exclude proposed funding from the power 
marketing legislative proposal included in the budget, that is 
what it amounts to. This is about $600 million less or a 14 
percent cut from the amount enacted in 2003.
    For the Bureau the proposal is about $58 million less or a 
7 percent cut over fiscal year 2003. This reduced amount of 
funding--or level of funding, I should say, in reclamation, 
water and related resources account is going to hamper progress 
on many large projects and programs involving water and power 
for the West, and also small projects.
    The Army Corps general investigation account is taking a 
tremendous hit. The fiscal year request is $100 million versus 
$135 million enacted in fiscal year 2003, a 26 percent cut.
    The administration is proposing to fund only 19 
preconstruction, engineering, and design studies out of 89 
funded last year. This means that 70 ongoing studies that have 
been signed--that have signed cost-sharing agreements with 
local sponsors must be terminated.
    The Army Corps construction general account is proposed at 
$1.350 billion or $406 million below what we had enacted last 
year, a 23 percent cut. There are no funds provided for 
discretionary new construction starts.
    The Army Corps operation and maintenance general account is 
proposed at--I am sorry--$1.939 billion. This assumes $145 
million will be received from the Power Marketing 
Administration for hydropower operation and maintenance.
    But when properly accounted, the proposal is an 8 percent 
cut. The Army Corps' Mississippi River and Tributaries account 
is proposed at $280 million, a--which is $65 million below last 
year, a 19 percent cut.
    The only major account to see a budget increase for the 
Army Corps is for general regulatory, a boost of $5 million 
over last year, an increase of 4 percent.
    The administration has proposed two new funding gimmicks 
this year, and is recycling another one from last year. They 
are proposing direct financing of the maintenance of the inland 
waterway system by using $146 million from the Inland Waterway 
Trust Fund. Keep in mind, this fund was established to provide 
the industry cost share for new construction, major 
rehabilitation, inland navigation projects. The fund is 
financed by a 20 percent per gallon tax on fuel for vessels 
operated for commercial waterway transportation.
    If the administration's proposal is implemented, it would 
ensure that the fund either went bankrupt or fuel taxes for the 
inland waterway system would have to be increased 
significantly.
    The other new proposal is to tap $212 million from the 
Harbor Maintenance Trust Fund for construction and deep water 
ports and channels. This fund was established for users to pay 
maintenance costs of deep water ports and channels.
    The fund is financed by cost on the value of cargo shipped 
to or from U.S. ports. And the requests we get from members, 
valid important requests every year for these deep water 
channels, deep water ports and channels is overwhelming. We 
cannot keep up with it without, in effect, stealing this money 
for other projects.
    While the harbor maintenance trust fund is better financed 
than the inland waterway trust fund, using it for construction 
of projects was not envisioned, and it would cause its 
bankruptcy.
    The recycled proposal is for direct funding of operation 
and maintenance of the Corps, owned and operated hydropower 
facilities by the Power Marketing Administration. This proposal 
assumes that it will provide $145 million to the Corps for 
hydropower operation and maintenance. This proposal was dead on 
arrival last year, and I see no enthusiasm for it this year.
    All three of these proposals would require specific 
enacting legislation in order for them to become law. However, 
the administration made no overtures to the Congress to explain 
how these proposals would be a benefit to the Corps.
    It is entirely possible that these overtures have not been 
made because these proposals benefit neither the Corps or the 
Nation. In fact, two of the proposals only served a mass 
deficit spending with the beneficiary being the administration 
in this budget game.
    The budget proposed for the Bureau shows a slight increase. 
However, this increase is quite deceiving. Many important 
ongoing projects have received substantially reduced funding 
levels.
    The administration slashed funding for reclamations of 
rural water and water recycling projects from what has been 
provided in prior years. The administration's budget says that 
they will--that while these are important elements in meeting 
future western water needs, they should be done by someone 
else. I do not know who that would be.
    Most of the rural water projects funded by this 
subcommittee provide clean drinking water to people that have 
had only access to water of questionable quality for most of 
their lives. The cost to our local communities of providing 
this clean drinking water is well beyond the scope of most 
communities.
    Federal funding for recycled water projects is limited to a 
25 percent overall project cost and, in many cases, capped at 
$20 million. But without these Federal dollars, these projects 
simply cannot go forward. The Federal dollars provide the 
necessary leverage for State and local funds to be able to do 
something that is meaningful.
    The administration budget theme for this year is economic 
security for our Nation. Based on the proposals submitted by 
the Army Corps--submitted for the Army Corps and the Bureau of 
Reclamation, it appears that they have overlooked valuable 
components of our economic security.
    For example, 41 States are served by the Army Corps' ports 
and waterways. These ports and waterways provide an integrated, 
efficient and safe system for moving bulk cargo. Two-point-
three billion tons of cargo are moved through these ports and 
waterways each year. This--the value of this cargo to the 
national economy approaches $700 billion. Navigable waterways 
generate over 13 million jobs in the national economy, and $150 
billion in Federal taxes. Annual damages prevented by the Corps 
exceed $20 billion. By how much, I am not too sure.
    From 1928 to 2000, the cumulative flood damages prevented, 
when adjusted for inflation, were $709 billion for an 
investment of only $122 billion. That is nearly a 6:1 return.
    The Bureau and the Army Corps water projects, storage 
projects have a total capacity of 575 million acre feet of 
storage and provide municipal and industrial water supply to 
millions of our citizens. Without these infrastructure 
investments, the tremendous population growth in western 
America would not have been possible.
    The Bureau and the Corps provide about 35 percent of the 
Nation's hydroelectric power, which amounts to 5 percent of our 
total electricity. In the West, the percent of--or percentage 
of hydropower, that power, is much greater.
    Both the Corps and the Bureau contribute to our Nation's 
environmental protection. Over $1 billion or about 25 percent 
of the Army Corps' appropriation was targeted for environmental 
activities. Reclamation expended a similar percentage on their 
budget.
    These are only a few of the things that these two agencies 
contribute to our economy. The administration's proposals are 
inadequate to fund ongoing projects at anything other than 
minimal levels. And we are going to have to eliminate lots of 
them.
    In spite of all of the administration's rhetoric about the 
economy--about economic security and maintaining our abilities 
to compete in world trade, the administration has again--have 
produced something that is remarkably shortsighted in this 
budget.
    The administration will not lead in the area of critical 
infrastructure. But we have to. Congress has to. So I plan to 
work with the subcommittee, Chairman Stevens, Ranking Member 
Byrd, and Chairman Domenici to ensure that this subcommittee 
gets the resources needed to fund these vital organizations 
properly.
    And I would say on a personal note, the employees of 
these--of the Corps, I appreciate very much for their 
outstanding service to organizations not only to Nevada, but to 
our Nation as a whole.

                           PREPARED STATEMENT

    More often than not, your employees do not get the credit 
they deserve. There is not a single member in either chamber 
whose State is not impacted positively by the work that these 
agencies do, the Corps and the Bureau.
    So I am sorry to take so much time. And I know you are 
filling in and wanted to rush through this. I am----
    Senator Cochran. That is not correct.
    Senator Reid. That speaks----
    Senator Cochran. I do not want to rush through it.
    I want to carefully address the budget proposal and 
consider it very carefully.
    Senator Reid. That speaks well of you. If the roles were 
reversed, I would want to rush through it, so----
    [The statement follows:]
                Prepared Statement of Senator Harry Reid
    Good Morning.
    This is the first of our budget oversight hearings this year and, 
as always, I look forward to working with my good friend, Senator 
Domenici and his staff in preparing our annual spending package.
    These hearings are intended to help us prepare our funding 
proposals. We depend on the open exchange of information that we 
receive in these hearings.
    Most importantly, we will develop our appropriations bill by taking 
into account the needs of our Members and the American people.
    Once again, the budget that OMB submitted for the Army Corps is 
totally inadequate. Further, it continues a recurring theme of this 
administration of trying to mask deficit spending with funding 
gimmicks.
    The Administration has proposed a fiscal year 2004 request for the 
Army Corps of $4.049 billion when you exclude proposed funding from the 
power marketing legislative proposal included in the budget. This is 
about a $600 million less or 14 percent cut from the amount enacted in 
fiscal year 2003. For the Bureau of Reclamation, the proposal is about 
$58 million less or a 7 percent cut over the fiscal year 2003 enacted 
amount.
    This reduced level of funding in Reclamation's Water and Related 
Resources Account is going to hamper progress on several large projects 
and programs providing water and power for the West.
    The Army Corps' General Investigations account is taking a huge 
hit. The fiscal year 2004 request is $100 million versus $135 million 
enacted in fiscal year 2003, a 26 percent cut. The Administration is 
proposing to fund only 19 Preconstruction Engineering and Design 
Studies out of 89 funded in fiscal year 2003. This means that 70 on-
going studies that have signed cost sharing agreements with local 
sponsors must be terminated if the budget proposal were enacted.
    The Army Corps' Construction, General account is proposed at $1,350 
billion, $406 million below fiscal year 2003 enacted, a 23 percent cut. 
There are no funds provided for discretionary new construction starts.
    The Army Corps' Operation and Maintenance, General account is 
proposed at $1,939 billion, however, this assumes $145 million will be 
received from the Power Marketing Administrations for hydropower 
operation and maintenance. When properly accounted, the proposal is 
$1,794 billion, $146 million below the fiscal year 2003 enacted, an 8 
percent cut.
    The Army Corps' Mississippi River and Tributaries account is 
proposed at $280 million, $65 million below fiscal year 2003 enacted or 
about a 19 percent cut.
    The only major account to see a budget increase for the Army Corps 
is for General Regulatory, a boost of $5 million over fiscal year 2003 
enacted, or an increase of 4 percent. While I am glad to see this 
increase for the Army Corps' permitting activities, I am appalled at 
the cuts to the other major accounts.
    The Administration has proposed two new funding gimmicks this year 
and is recycling one from fiscal year 2003.
    The Administration is proposing direct financing of the maintenance 
of the inland waterway system by using $146 million from the Inland 
Waterway Trust Fund.
    This fund was established to provide the industry cost share for 
new construction and major rehabilitation of inland navigation 
projects. The fund is financed by a 20 cent per gallon tax on fuel for 
vessels operated for commercial waterway transportation.
    If the Administration proposal is implemented, it would ensure that 
the fund either went bankrupt or fuel taxes for the inland waterway 
system would have to be significantly increased.
    The other new proposal is to tap $212 million from the Harbor 
Maintenance Trust Fund for construction of deepwater ports and 
channels.
    This fund was established for users to pay maintenance costs of 
deep water ports and channels. The fund is financed by a tax on the 
value of cargo shipped to or from U.S. ports.
    While the Harbor Maintenance Trust Fund is better financed than the 
Inland Waterway Trust Fund, using it for construction of projects was 
not envisioned and would cause its bankruptcy as well unless the tax 
rate was increased.
    The recycled proposal is for direct funding of operation and 
maintenance of Corps of Engineers owned and operated hydropower 
facilities by the Power Marketing Administrations. This proposal 
assumes that the Power Marketing Administrations will provide $145 
million to the Corps of Engineers for hydropower operation and 
maintenance.
    This proposal was dead on arrival last year and I see no enthusiasm 
among my colleagues for it this year.
    All three of these proposals would require specific enacting 
legislation in order for them to become law. However, the 
Administration has made no overtures to the Congress to explain how 
these proposals would be of benefit to Corps of Engineers or the 
Nation.
    It is entirely possible that these overtures have not been made 
because these proposals benefit neither the Corps of Engineers nor the 
Nation. In fact, two of the proposals only serve to mask deficit 
spending with the beneficiary being the Administration in their annual 
budget game.
    The budget proposed for the Bureau of Reclamation shows a slight 
increase; however, this increase is deceiving. Many important on-going 
projects have received substantially reduced funding levels.
    The Administration has slashed funding for Reclamation's rural 
water and water recycling projects from what has been provided in 
fiscal year 2003 and prior years. The Administration's budget says that 
while these are important elements of meeting future western water 
needs, they should be done by someone else. The implication is that 
these are local problems and should be solved by local interests.
    Most of the rural water projects funded by this Subcommittee 
provide clean clear drinking to people that have only had access to 
water of questionable quality for most of their lives. The cost to 
local communities of providing this clean drinking water is well beyond 
the scope of most communities.
    Federal funding for recycled water projects is limited to a 25 
percent of the overall project cost and in many cases is capped at $20 
million. Yet without these Federal dollars many of these projects could 
not go forward. The Federal dollars provide the necessary leverage to 
obtain other state and local funds.
    The Administration budget theme for this year is Economic Security 
for Our Nation. Based on the proposal submitted for the Army Corps and 
the Bureau of Reclamation, it appears that they have overlooked 
valuable components of our economic security. Let me elaborate:
  --41 states are served by Army Corps ports and waterways. These ports 
        and waterways provide an integrated, efficient and safe system 
        for moving bulk cargos. 2.3 billion tons of cargo are moved 
        though these ports and waterways. The value of this cargo to 
        the national economy approaches $700 billion. Navigable 
        waterways generate over 13 million jobs to the national economy 
        and nearly $150 billion in Federal taxes.
  --Average annual damages prevented by Army Corps flood control 
        projects exceed $20 billion. From 1928-2000, cumulative flood 
        damages prevented when adjusted for inflation were $709 billion 
        for an investment of $122 billion, adjusted for inflation. That 
        is nearly a 6 to 1 return on this infrastructure investment.
  --The Bureau and the Army Corps water storage projects have a total 
        capacity of nearly 575 million acre feet of storage and provide 
        municipal and industrial water supply to millions of our 
        citizens. The water supply infrastructure provided by the 
        Bureau and the Army Corps in the West are the life blood of the 
        communities they serve. Without these infrastructure 
        investments the tremendous population growth in our western 
        states would not have been possible.
  --The Bureau of Reclamation and the Army Corps of Engineers provide 
        about 35 percent of the Nation's hydroelectric power which 
        amounts to nearly 5 percent of the U.S. total electric 
        capacity. In the West the percent of hydropower to total power 
        supplied is much greater.
  --Additionally, both the Army Corps and the Bureau contribute to our 
        Nation's environmental protection. Over $1 billion or about 25 
        percent of the Army Corps' fiscal year 2003 appropriations was 
        targeted for environmental activities. Reclamation expended a 
        similar percentage of their budget on these important 
        activities.
    These are only some of the ways that these two agencies contribute 
to our economy and yet the Administration's budget proposal has given 
them short shrift. The Administration proposals are woefully inadequate 
to fund ongoing projects at anything more than minimal levels.
    In spite of all of the Administration rhetoric about economic 
security and maintaining our abilities to compete in world trade, the 
Administration has again produced a remarkably short sighted budget.
    If the Administration will not lead in the area of critical 
infrastructure, Congress will. I plan to work aggressively with Ranking 
Member Byrd, Chairman Stevens and Chairman Domenici to ensure that this 
Subcommittee gets the resources needed to fund these two vital 
organizations properly.
    On a personal note, I would like to take this opportunity to thank 
you and your employees for the outstanding service that your 
organizations provide not only to Nevada, but to our Nation as a whole. 
More often than not, your employees don't get the credit they deserve. 
There is not a single Member in either Chamber whose state is not 
impacted positively by the work your agencies do.

    Senator Cochran. Thank you, Senator Reid.
    Senator Bond.

                STATEMENT OF SENATOR CHRISTOPHER S. BOND

    Senator Bond. Thank you very much, Mr. Acting Chairman. And 
I woke up yesterday morning thinking that serving on 5 
committees and 11 subcommittees was leaving me with too much 
free time, so I jumped at the opportunity to serve on this 
twelfth subcommittee.
    And, Secretary Brownlee, General Flowers, General Griffin, 
and all of you, I welcome you and the second panel. I join with 
my colleagues in expressing the frustrations that we all have 
felt.
    I know at this time, gentlemen, particularly those in the--
well, all of you, have issues on your plate that are larger 
than the details of the project feasibility study and 
environmental impact statements. I know that each of you are no 
strangers to military combat. Each of you have had to lead 
troops into combat, and currently the troops are looking to you 
for leadership. And, once again, on behalf of myself and the 
people I serve, we express our gratitude for your sacrifice and 
your commitment to the security of the Nation.
    On the issue of domestic water resources, I have expressed 
myself repeatedly about the continued insufficiency of OMB's 
budget request. I would only say ``Amen,'' to what has been 
said before, particularly Senator Reid's statement. I have the 
pleasure of working with him on the authorizing committee, and 
we have this problem in other areas.
    But, Les, I would urge you, as I urged your predecessor, 
please do not agree with me publicly, would you?
    Inside joke, there.
    Historically, given how much Congress is forced to modify 
the budget request for the Corps, the OMB budget request for 
the Corps has become about as relevant as a UN resolution is to 
the French government. But as the acting chairman and Senator 
Reid have said, your work has put people to work in our 
country.
    You save money by preventing waste associated with delay. 
You have provided for a cleaner, better environment through 
your efforts. And you have been true conservationists.
    Every year, there is a referendum on the work of the Corps, 
and it is called an appropriations bill. On a bipartisan basis, 
we join to add resources to high priority projects, which 
speaks to the value of what you do as demanded by the people 
who pay the taxes and who elect us.
    Now, I would also add on the matter, a minor matter that is 
free of controversy, I encourage your efforts to identify the 
best resolution to the questions of managing the Missouri 
River. We do have--we do have an awful drought, and there is 
going to be pain shared by the people in the upper basin with 
the people in the lower basin. When water is short, everyone 
feels cheated. Everyone wants more of it.
    Senator Craig, I feel your pain.
    The middle Mississippi River, which carries $27 billion in 
cargo and is the primary avenue for transporting for our 
agricultural projects, which give us in good years a $30 
billion favorable balance in trade, has been closed and 
restricted.
    This is a difficult matter to resolve this. Why, the first 
Bush Administration did not resolve it. The Clinton 
Administration studied it for 8 years and kicked the can down 
the road to this administration.
    Past Congresses have given you conflicting mandates. Recent 
Congresses have given you plenty of rhetoric but very little 
legislative guidance, despite the efforts of some of us. If it 
were up to me, Congress would pass legislation establishing 
priorities for you to follow and let you get on with them. 
Otherwise, I would just as soon pass legislation giving a 
President, this one or the next, the authority to make a 
decision once and for all, without having to struggle with all 
the conflicting mandates imposed in decades past.
    Then we would have a decision. We would have some 
accountability, and we could move one way or the other and take 
responsibility for it.
    I realize you are victims in a thankless blame game where 
the States and the agencies are polarized. You are left in the 
middle with the hard job of balancing priorities, when that job 
should be the job of Congress.
    I look forward to working with the other members of this 
committee to help you resolve those priorities. And I thank you 
for your service for the security of this Nation.
    Thank you.
    Senator Cochran. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, I would be happy to yield to 
Senator Murray.
    Senator Cochran. Senator Murray.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Thank you, Senator. I will not take much 
time. We want to hear from our witnesses today.
    Let me just thank you for being here today. I look forward 
to your testimony. Clearly, there are a lot of critical 
projects in my State, from transportation obstruction, water, 
energy, environmental projects that I have a number of 
questions on. I will save some time.
    Let me just thank Senator Reid and the Chairman for their 
assistance with our energy and water projects in the past 
though. We have been very grateful for that, and I appreciate 
that. And I look forward to the testimony this morning.
    Senator Cochran. Senator----
    Senator Reid. Mr. Chairman, I would ask unanimous consent 
that--I have some questions I can submit in writing to the 
witnesses.
    Senator Cochran. Without objection, it is so ordered.
    Senator Dorgan, you want to----
    Senator Bond. I will ask the same.
    Senator Cochran. Without objection.
    Any Senators on the committee may submit questions. And we 
hope you will respond to them in a timely fashion. Thank you.
    Sir.

                  STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. Mr. Chairman, I will be brief, but let me 
say that the comments from my colleagues, Senator Reid and 
Senator Bond, are right on the mark with respect especially to 
some of the funding issues.
    I note that Senator Bond indicates he is on 12 
subcommittees, and my hope is that keeps him busy enough not to 
be too active on this subcommittee.
    We have had some long, spirited and interesting discussions 
about Missouri River issues. And I know, General Flowers, you 
will be in the middle of all of that, I am certain.
    You started a 6-month process 12 years ago to create a new 
master manual for the Missouri River. Twelve, 13 years later, 
of course, we still wait. And Senator Bond and I both have an 
acute interest in it.
    The Bureau's budget for water and related resources, for 
example, is nearly $43 million less than the amount we 
appropriated in the recent omnibus bill, so a number of 
projects will go wanting. There is under-funding of some Corps 
projects, key Corps projects. I will not go into all of them, 
but we in the West and Northern Plains are facing increasing 
drought, and water needs are more acute than ever.
    The money that is recommended in the administration's 
budget is not nearly what is needed to respond to these issues 
both at the Bureau and the Corps, so I will ask some questions 
about a number of projects that I am very concerned about.
    But I will wait until the question period to talk about 
them, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    Senator Stevens.

                    STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. Well, thank you very much, Mr. Chairman. I 
am going to have to go to another hearing so I am not going to 
ask questions. I do want to make a statement, however.
    I am sure the witnesses all know Alaska has half the 
coastline of the United States. We have a very small 
population, but we are completely dependent in many areas on 
the Corps of Engineers for their projects.
    Now, out at or on Unalaska, at the Dutch Harbor area, 
Congress authorized a project that was needed. That is the 
largest fishing port in the United States, and has been 
consistently now. That harbor was delayed because of a dispute 
between the Fish and Wildlife Service and the Corps of 
Engineers. It has never been built.
    We have another situation there at King Cove, an enormous 
battle that developed over access to King Cove to the 
facilities at Cold Bay for transportation of people, 
particularly in emergencies to the hospital. Congress provided 
after a long, long debate with the Clinton Administration that 
King Cove could build a road, and the road would be 
determined--the location of it would be determined by the 
communities, where it would go. They owned the property. That 
road has been delayed also. It has never been built. And even 
today there--the monies that we provided them to build the road 
has been used to try to find some way to get it going.
    We had money in the Energy and Water Bill 2 years ago for 
the sewer, the Wrangell projects. OMB took it upon themselves 
to veto those projects. And we put very strong language in the 
omnibus package that has just been passed. I hope that will be 
followed, that the Corps will follow the direction of Congress, 
which the President agreed to when he signed that bill.
    There is also money for False Pass and Seward Harbor. Both 
of those had to be revisited again in the 2003 bill. And I hope 
we do not have to do in, Mr. Chairman, in the 2004 bill what we 
had to do in the omnibus bill to try and get the Corps and the 
administration to follow the directions of the Congress as 
agreed to by the President when he signs these bills.
    We are in a situation where, now because of the delays in 
so many other economic activities that those related to fishing 
and the using--use of our harbors are absolutely essential to 
our survivor--or survival now. And I really do not understand 
these continued delays.
    I know we are under attack by a whole series of very 
extreme environmental organizations. They had their day--right 
to their day in court, but when it is over, it ought to be 
over.
    And I am really very serious, Mr. Chairman, in saying that 
somehow or other, these projects have to go forward. If it gets 
to the point where I have to delay this bill until we get an 
agreement that they--that the Corps will go forward, I will do 
that. I have never delayed an appropriations bill, since I have 
been on the committee or have been chairman, but I will do 
that. And I will refuse to bring this bill up until I get an 
understanding with the Corps that they are going to comply with 
the law with regard to these projects, particularly in terms of 
the Dutch Harbor Unalaska Project, and the basic project for 
King Cove.
    Now, those two projects are humanitarian as well as 
necessary for the continuation of the economic activities in 
those areas. And I am very serious. I do not know anything else 
a Senator can do but finally use his ultimate right to delay a 
bill until we get an understanding that that is--that those 
projects are going to be built.
    I would be happy to visit with you, Mr. Brownlee, or with 
you, General Flowers, in any way. And I would be happy to go 
down and have a meeting with the President of the United 
States, if you would like. But these projects were authorized 
and reauthorized by Congress, and they are going to be built. 
One way or another, they are going to be built.
    Thank you very much, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    Senator Bennett.
    Senator Bennett. I have no opening statement, Mr. Chairman.
    Senator Cochran. Mr. Secretary, you may proceed.
    Mr. Brownlee. Thank you, Mr. Chairman.
    Senator Stevens. Mr. Craig wants to ask unanimous consent 
to add other projects to my list.
    Senator Craig. You want to add other projects to Ted's 
list. Okay.
    Senator Cochran. Without objection, it is----
    Mr. Secretary, you may proceed.

                       STATEMENT OF LES BROWNLEE

    Mr. Brownlee. Thank you, sir. If I could just take a 
moment, sir, to extend my best wishes to Chairman Domenici, who 
I understand could not be here this morning, and I have 
certainly grown to admire and respect and have great affection 
for him, and so I just wanted to send him my very best from 
here.
    Senator Cochran. Thank you.
    Mr. Brownlee. I would thank all of the members of the 
subcommittee who were able to arrange to meet with me before 
this hearing and also the courtesies of their staff to do so. 
If there is any member whom I was not able to meet with, let me 
just say that I will do so at your convenience to discuss any 
of these matters. I just want to be sure that it is very clear 
that I am available to do that.
    I come here this morning, sir, with somewhat always mixed 
emotions when I come back to the place, here, the Senate, where 
I worked for almost 18 years on the staff of the Senate Armed 
Services Committee. I have many heroes here in this body and 
some of them are here this morning, so I appreciate very much 
the opportunity to come and testify before the subcommittee on 
the President's fiscal year 2004 budget for the Civil Works 
Program of the Army Corps of Engineers. I am accompanied this 
morning by Lieutenant General Robert Flowers, General Bob 
Griffin, and Rob Vining.
    I am going to take just a moment to say something about 
General Flowers, and the committee already knows this very 
well, but this is one of the Army's most capable general 
officers. He provides extraordinary leadership to the Corps of 
Engineers. It is an honor and a privilege for me to work 
alongside him in this--on these important matters.

                           PREPARED STATEMENT

    With your permission, Mr. Chairman, I would like to 
summarize my statement and ask your permission that the 
complete statement be included in the record.
    Senator Cochran. Without objection, it will be included in 
the record.
    [The statement follows:]
                   Prepared Statement of Les Brownlee
                              introduction
    Mr. Chairman and distinguished members of the Subcommittee, thank 
you for the opportunity to testify before this subcommittee of the 
Transportation and Infrastructure Committee and to present the 
President's budget for the Civil Works program of the Army Corps of 
Engineers for fiscal year 2004. Accompanying me this morning is 
Lieutenant General Robert B. Flowers, Chief of Engineers.
             army civil works program for fiscal year 2004
    The fiscal year 2004 budget for Army Civil Works provides funding 
to continue the development and restoration of the Nation's water and 
related resources, the operation and maintenance of existing 
navigation, flood damage reduction, and multiple-purpose projects, the 
protection of the Nation's regulated waters and wetlands, and the 
cleanup of sites contaminated as a result of the Nation's early atomic 
weapons program.
    The fiscal year 2004 budget for Army Civil Works includes new 
discretionary funding requiring appropriations of $4.194 billion and an 
estimated $4.234 billion in outlays from discretionary funding (see 
Table 1). These figures are approximately the same as in the fiscal 
year 2003 budget.
    The new discretionary funding includes $812 million from the Harbor 
Maintenance Trust Fund. Of this amount, $607 million is for harbor 
operation and maintenance and dredged material disposal facility 
construction under existing law and $205 million is for harbor 
construction under a legislative proposal set forth in appropriations 
language proposed in the budget. The discretionary funding also 
includes $256 million from the Inland Waterways Trust Fund. Of this 
amount, $110 million is for construction and rehabilitation on the 
inland waterways under existing law, and $146 million is for operation 
and maintenance of the inland waterways under a legislative proposal 
set forth in appropriations language proposed in the budget. The new 
uses proposed for these two funds are described in greater detail in 
the discussion of budget highlights.
    The Administration is submitting a legislative proposal for direct 
funding of hydropower facility operation and maintenance by Federal 
power marketing administrations. New discretionary funding of $145 
million would be derived from direct funding. This proposal also is 
described in greater detail in the discussion of budget highlights.
    Other sources of new discretionary funding include $2.947 billion 
from the general fund and $34 million from Special Recreation User 
Fees.
    Additional program funding, over and above funding from the sources 
requiring discretionary appropriations, is estimated at $494 million. 
This total includes $143 million from the Bonneville Power 
Administration for operation and maintenance of hydropower facilities 
in the Pacific Northwest, $278 million contributed by non-Federal 
interests for their shares of project costs and for project-related 
work, $58 million from the Coastal Wetlands Restoration Trust Fund, and 
$16 million from miscellaneous permanent appropriations.
    Preparation of this year's budget included a new process for 
assessments of program performance. These assessments were intended to 
improve the effectiveness of Civil Works programs and to improve the 
quality of their management and oversight. These assessments, and how 
their results are reflected in budget decisions, are described in 
greater detail in the discussion of budget highlights.
                           program highlights
    Highlights of the fiscal year 2004 budget for Army Civil Works 
include: an emphasis on priority missions, anti-terrorist facility 
protection, and emergency preparedness, response, and recovery; an 
emphasis on continuing construction projects and a de-emphasis on 
design and initiation of new projects; and legislative proposals for 
expanded user financing of projects through the Harbor Maintenance 
Trust Fund, the Inland Waterways Trust Fund, and the Federal power 
marketing administrations. These highlights are described in greater 
detail below and are followed by information on proposed studies and 
management initiatives.
Priority Missions
    The budget gives priority to ongoing studies, projects and programs 
that provide substantial benefits in the primary (or ``core'') missions 
of the Civil Works program, which are commercial navigation, aquatic 
ecosystem restoration, and flood and storm damage reduction.
    The budget also provides funding for other areas of Corps 
involvement, including regulatory protection of waters and wetlands, 
cleanup of sites contaminated by the Nation's early atomic weapons 
program, and the management of natural resources and provision of 
hydroelectric power and recreation services at Federally operated Civil 
Works projects.
    No funds are provided for studies and projects that carry out non-
traditional missions that should remain the responsibility of non-
Federal interests or other Federal agencies, such as wastewater 
treatment, irrigation water supply, and municipal and industrial water 
supply treatment and distribution. Furthermore, the budget does not 
fund individual studies and projects that are inconsistent with 
established policies governing the applicable missions.
Anti-Terrorist Facility Protection
    Following the events of September 11, 2001, the Corps received 
appropriations of $174 million to provide facility protection measures 
(such as guards) that have recurring costs, to perform assessments of 
threats and consequences at critical facilities, and to design and 
implement the appropriate ``hard'' protection at those critical 
facilities. The Administration is continuing its commitment to facility 
protection in fiscal year 2004, with a budget of an additional $104 
million for facility protection.
    In addition, the budget includes a legislative proposal, set forth 
in appropriations language proposed in the budget, to use funding from 
the Operation and Maintenance (O&M) account to protect not only 
operating Civil Works projects that normally are funded from the O&M 
account, but also administration buildings and facilities and those 
operating projects that normally are funded from the Flood Control, 
Mississippi River and Tributaries account. This legislative proposal 
would also authorize using Civil Works O&M funds to pay for protecting 
the Washington Aqueduct drinking water plant, which is normally funded 
from revenues that are generated by selling drinking water and 
subsequently appropriated in the District of Columbia Appropriations 
Act each year.
    Of the $104 million in the fiscal year 2004 O&M budget for facility 
protection, $91 million is for O&M-funded projects and $13 million is 
for other projects and facilities.
Emergency Preparedness, Response, and Recovery
    The Flood Control and Coastal Emergencies account finances response 
and recovery activities for flood, storm, and hurricane events, as well 
as preparedness for these natural events and for support to the Federal 
Emergency Management Agency through the Federal Response Plan.
    The recent performance assessment of this program concluded that it 
is moderately effective overall. The fiscal year 2004 budget provides 
$70 million for this account. This amount is approximately what the 
Corps spends on emergencies in a typical year. This amount would ensure 
that there are sufficient funds to respond to major flood and storm 
emergencies and would reduce the likelihood of having to borrow from 
other accounts or seek emergency supplemental appropriations for 
recovery efforts.
Emphasis on Ongoing, Budgeted Construction Projects
    The Corps estimates that current backlog (that is, the estimated 
costs to complete construction projects funded in the budget) exceeds 
$20 billion. In recent years, these projects have had to compete for 
funding with numerous new construction starts. To maximize the net 
benefits of the construction program and realize those benefits more 
quickly than under current trends, the budget limits funding for the 
planning and design of new projects, provides funding to complete all 
of the projects that can be completed in fiscal year 2004, and provides 
substantial funding for eight projects that we consider to be the 
highest Civil Works priorities nationwide.
    The budget includes funding for continuation of 148 projects and 
completion of 13 projects. In addition, the budget includes funding 
across all accounts to continue or complete design of 22 proposed 
projects. These projects were selected based on their economic and 
environmental returns and because design is nearing completion. The 
budget defers work on all lower priority design efforts.
    Table 2 (attached) displays benefit/cost information on projects 
under construction. The table provides information on remaining 
benefits and remaining costs and is presented for all projects at a 
discount rate of 7 percent.
Expanded Use of Navigation Trust Funds
    The budget includes legislative proposals to expand the authorized 
uses of the Inland Waterways Trust Fund and the Harbor Maintenance 
Trust Fund. These proposals would shift some costs now borne by general 
taxpayers to the commercial users of Federal navigation projects, and 
would apply the unused balances in these accounts in fiscal year 2004 
for the benefit of navigation. These legislative proposals are included 
in the proposed appropriations language appearing in the Budget 
Appendix for fiscal year 2004.
    The Inland Waterways Trust Fund would be used to finance 25 to 50 
percent of operation and maintenance costs for inland waterways, in 
addition to the currently authorized financing for 50 percent of 
construction costs. Inland waterways with average commercial traffic of 
more than 5 billion ton-miles per year would be financed 25 percent. 
All other inland waterways would be financed 50 percent.
    The 5 billion ton-mile criterion was selected to distinguish 
between high commercial-traffic projects that would be funded 75 
percent from the general fund and 25 percent from the Inland Waterways 
Trust Fund and those projects with lower commercial traffic that would 
be funded 50 percent from each source. This criterion was used because 
the projects with commercial tonnage above the criterion are those that 
provide a greater return to the Nation and, consequently, are suitable 
for a higher level of support from general taxpayers.
    The Harbor Maintenance Trust Fund would be used to finance the 
Federal share of harbor construction costs, in addition to the 
currently authorized financing for the Federal share of harbor 
operation and maintenance costs and for the Federal share of the costs 
of confined dredged material disposal facilities.
Direct Financing of Hydropower Operation and Maintenance Costs
    Historically, each year the Army Civil Works program has financed 
the operation and maintenance costs of Corps of Engineers hydroelectric 
facilities, and Federal power marketing agencies have repaid the 
Treasury for these costs from the revenues provided by ratepayers. The 
exception has been in the Pacific Northwest, where under section 2406 
of the National Energy Policy Act of 1992, Public Law 102-486, the 
Bonneville Power Administration (BPA) has directly financed the costs 
of operating and maintaining the Corps' hydroelectric facilities from 
which it receives power. BPA has been providing operation and 
maintenance funds in this manner each year, beginning in fiscal year 
1999, and all parties agree that this financing arrangement is working 
well.
    Each year, Corps facilities experience unplanned outages around 3 
percent of the time. In 1999, the General Accounting Office found that 
the Corps' hydropower facilities are twice as likely to experience 
``unplanned outages'' as private sector facilities, because the Corps 
does not always have funds for maintenance and repairs when needed.
    To address this problem, the budget proposes that the Southeastern 
Power Administration, the Southwestern Power Administration, and the 
Western Area Power Administration finance hydropower operation and 
maintenance costs directly, in a manner similar to the mechanism used 
by Bonneville. The budget contemplates that these power marketing 
administrations would make those hydropower operation and maintenance 
investments that they believe are justified in order to provide 
economical, reliable hydropower to their customers and that, as a 
consequence, unplanned outages would decline over time to levels 
comparable to the industry average. The Administration is submitting 
this legislative proposal for consideration as part of proposed 
authorizing legislation for the Department of Energy and related 
agencies.
              proposed studies and management initiatives
    The fiscal year 2004 budget for Civil Works includes a limited 
number of new studies, as well as a number of management initiatives. 
These proposals are designed to support the Administration's 
priorities, to improve program effectiveness, and to improve the 
quality and objectivity of project planning and review.
    The budget includes a number of proposals that, taken together, 
represent a strong commitment to improving the quality and objectivity 
of planning and review for new projects. The budget includes $3 million 
to initiate the independent review of complex, costly, or controversial 
project proposals. The budget also includes $2 million for a new, one-
time ``ex-post-facto'' economic analysis of completed projects, to 
assess whether Corps projects are delivering the benefits that were 
anticipated when they were planned. This study will help the Corps to 
see where it was right and where it was wrong, and to understand the 
reasons for its successes and failures in its process for estimating 
benefits, in order to improve future analyses. In addition, the budget 
contemplates realigning Corps planning expertise to ensure that this 
capability is used to best advantage. Concurrently, the Corps is 
improving planner training and streamlining and standardizing its 
business processes, and my office has established a project planning 
and review group to oversee project development.
    The budget includes $1 million to initiate a new study of long-term 
options for the operation and maintenance of existing low-use harbors 
and waterways. The study would characterize the low-use facilities and 
would include economic analyses supporting the options.
    Five programs within Civil Works were assessed during development 
of the fiscal year 2004 budget: the hydropower program; the flood 
damage reduction program; the inland waterway navigation program; the 
Flood Control and Coastal Emergencies program; and wetlands-related 
activities other than the Regulatory Program. In addition, the 
effectiveness and cost of wetlands and flood damage reduction 
activities were compared with other agencies. In response to the Flood 
Control and Coastal Emergencies program evaluation, the budget 
allocates significant funding to this program. After reviewing the 
evaluation of the flood damage reduction program, we increased funding 
for our two highest priority projects and identified them for the first 
time in the budget. The reviews also helped in developing the financing 
proposals for inland waterways and hydropower, described above.
    The Army Civil Works program is continuing its efforts to integrate 
strategic and performance planning with budgeting, which is part of the 
President's Management Agenda and is required by the Government 
Performance and Results Act. A draft Strategic Plan for the Army Civil 
Works program is being reviewed. In addition, draft performance plans 
for the Army Civil Works program are under review. After completion of 
Administration review, all of these plans will be transmitted to 
Congress.
    There are four other elements of the President's Management Agenda. 
For the human capital initiative, the Corps of Engineers has prepared 
and is carrying out a strategic human capital plan. The Corps is 
reviewing its current organization and management in an effort to 
improve the quality and objectivity of project planning work. For the 
financial management initiative, the Corps is working with the 
Department of Defense Inspector General to resolve audit issues and 
obtain an unqualified audit opinion on its financial statements for 
future fiscal years. For electronic government and information 
technology, the Corps has upgraded its capital planning and control 
processes and prepared business cases for most of its key systems. For 
competitive sourcing of commercial functions, the Corps has prepared a 
draft competition plan, which is under review. The Corps is also 
responding to the Army's ``third wave'' initiative supporting Army 
transformation, the war on terrorism, and the competitive sourcing 
initiative.
                         appropriation accounts
General Investigations
    The budget for the General Investigations program is $100 million. 
Within this amount, $10 million is to continue or complete 
preconstruction engineering and design of 19 projects. The funding 
levels proposed for this account--and the way that we have proposed to 
allocate that funding--are key elements for our strategy to address the 
construction backlog. They reflect an emphasis on completing policy-
consistent projects that are already budgeted in the Construction 
account, rather than continuing to plan, design, and initiate new work.
    The remaining funding would be used to continue policy-consistent 
reconnaissance and feasibility studies, coordination, technical 
assistance, and research and development, as well as to initiate 5 
reconnaissance studies and the independent review and ex post facto 
analysis studies described above. The budget includes funding for 5 new 
reconnaissance studies that exemplify the watershed-based approach to 
solving water problems and would enable the Corps to test holistic 
methods for planning sustainable watershed development. (After the 
fiscal year 2004 budget was released, the Congress provided funding to 
initiate one of the studies in fiscal year 2003.)
Construction
    The fiscal year 2004 budget for the Construction program is $1.35 
billion. Of that total, $110 million would be derived from the Inland 
Waterways Trust Fund to fund 50 percent of the costs of construction 
and major rehabilitation of inland waterway projects, and $7 million 
would be derived from the Harbor Maintenance Trust Fund to fund the 
Federal share of dredged material disposal facilities at operating 
coastal harbor projects. In addition, under the Administration's 
legislative proposal, $205 million would be derived from the Harbor 
Maintenance Trust Fund to fund the Federal share of construction costs 
for coastal harbor projects.
    With three exceptions, funding is included in this account only for 
projects that meet the following criteria: the project has been funded 
in this account in a previous budget request; physical construction of 
the project has started by fiscal year 2003; the project has been 
actively under physical construction in at least one of the last 3 
years; and the Executive Branch has completed a review and made a 
determination that the project supports priority missions and is 
consistent with established policies.
    The three exceptions include one project proposed in the fiscal 
year 2004 budget as a construction new start, the Chief Joseph Dam Gas 
Abatement Project, Washington, which is necessary in order to satisfy 
the requirements of Biological Opinions for the Columbia River Basin. 
(After the fiscal year 2004 budget was released, the Congress provided 
funding to initiate construction of this project in fiscal year 2003.) 
The other two exceptions involve preconstruction work at two projects, 
namely, design of the dam safety improvement project at Success Dam, 
California, and continuing analysis and coordination for the Delaware 
River Main Channel Deepening Project, New Jersey, Pennsylvania, and 
Delaware.
    In addition to funding the completion of 13 projects in fiscal year 
2004, the budget provides substantial funding for our eight highest 
priority projects. These high priority projects are the New York and 
New Jersey Harbor deepening project ($115 million); the Olmsted Locks 
and Dam, Illinois and Kentucky, project ($73 million); projects to 
restore the Florida Everglades ($145 million) and the side channels of 
the Upper Mississippi River system ($33 million); projects to provide 
flood damage reduction to urban areas, namely, the Sims Bayou, Houston, 
Texas, project ($12 million) and the West Bank and Vicinity, New 
Orleans, Louisiana, project ($35 million); and projects to meet 
environmental requirements in the Columbia River Basin ($98 million) 
and the Missouri River basin ($22 million). The Everglades work 
actually is comprised of three distinct projects, as is the Columbia 
River Basin work.
    The budget provides $80 million for planning, design, and 
construction of projects under the Continuing Authorities Program. 
These are small projects for flood damage reduction, navigation, 
shoreline protection, streambank protection, navigation project impact 
mitigation, clearing and snagging, aquatic ecosystem restoration, 
beneficial uses of dredged material, and project modifications for 
improvement of the environment.
    The continuing program for beneficial uses of dredged material is 
being expanded to encompass additional types of beneficial uses at 
operating projects. In addition to restoring aquatic resources pursuant 
to section 204 of the Water Resources Development Act (WRDA) of 1990, 
the program also would be used for shore protection with dredged 
material pursuant to section 145 of WRDA 76, as amended by section 933 
of WRDA 86, and for other beneficial uses with dredged material 
pursuant to section 207 of WRDA 96.
Flood Control, Mississippi River and Tributaries
    The budget includes $280 million for the Mississippi River and 
Tributaries program. The budget directs funding to the priority flood 
damage reduction projects on the mainstem of the Mississippi River and 
in the Atchafalaya River Basin, Louisiana. No funding is provided for 
studies or projects that represent non-traditional missions or are 
inconsistent with established policies. No funding is provided for new 
studies or projects.
    The budget includes funding for preconstruction engineering and 
design for the Morganza to the Gulf, Louisiana, project. This project 
numbers among the 22 projects program-wide that are funded for 
continuing preconstruction engineering and design.
Operation and Maintenance
    The budget provides funding for the Army Corps of Engineers to 
carry out its operation and maintenance responsibilities at Corps-
operated projects for the purposes of commercial navigation, flood 
damage reduction, recreation, natural resources management, and 
multiple purposes including hydroelectric power generation. The budget 
proposes that this account fund anti-terrorist facility protection 
across all of these purposes and at Civil Works projects and facilities 
normally funded from this and other accounts, as explained earlier.
    The overall budget for the Operation and Maintenance account is 
$1.939 billion. Of this amount, $600 million would be derived from the 
Harbor Maintenance Trust Fund for coastal harbor maintenance and $34 
million would be derived from Special Recreation User Fees. Under the 
Administration's legislative proposals, $146 million would be derived 
from the Inland Waterways Trust Fund to finance 25 to 50 percent of the 
operation and maintenance costs for the inland waterways, and $145 
million would be derived from direct funding by three Federal power 
marketing administrations to finance hydropower operation and 
maintenance costs. In addition to this funding, Bonneville Power 
Administration would provide $143 million to directly fund the costs of 
operating and maintaining hydropower facilities in the Pacific 
Northwest.
    The navigation maintenance portion of the budget continues the past 
policy of focusing resources on harbors and waterways that have high 
volumes of commercial traffic or that support Federal or subsistence 
usage. No funds are provided for purely recreational harbors, and the 
budget limits funding for shallow draft harbors and for low commercial-
use waterways. The budget provides: $620 million for deep draft harbors 
(harbors with authorized depths of greater than 14 feet); $40 million 
for shallow draft harbors; $311 million for inland waterways with 
commercial traffic of more than 1 billion ton-miles per year; and $71 
million for waterways with less commercial traffic, with priority given 
to those operation and maintenance activities that provide the highest 
return to the Nation.
    The new study of long-term options for low-use harbors and 
waterways reflects an effort to reach agreement on how to address the 
needs of these harbors and waterways.
Regulatory Program
    The budget for the Regulatory Program is $144 million. These funds 
would be used for permit evaluation, enforcement, oversight of 
mitigation efforts, administrative appeals, watershed studies, special 
area management plans, and environmental impact statements. This 
funding supports continued efforts to reduce the average review time 
for individual permit applications, to improve protection of aquatic 
resources, and to strengthen protection of regulated wetlands through 
watershed approaches.
Formerly Utilized Sites Remedial Action Program (FUSRAP)
    The Formerly Utilized Sites Remedial Action Program (FUSRAP) is an 
environmental cleanup program for sites contaminated as a result of the 
Nation's early efforts to develop atomic weapons. Congress transferred 
the program from the Department of Energy in fiscal year 1998. We are 
continuing to implement needed cleanups at contaminated sites. This 
year's budget is $140 million.
General Expenses
    Funding budgeted for the General Expenses program is $171 million. 
These funds would be used for executive direction and management 
activities of the Corps of Engineers headquarters, the Corps division 
offices, and related support organizations. Within the budgeted amount, 
$9 million is for activities funded for the first time from this 
account: $2 million is to compete commercial functions between the 
Federal government and private sources; and $7 million is to audit the 
Civil Works financial statements, a function formerly carried out by 
the Army Audit Agency using its own funding. After adjusting for these 
two items, the amount of our request is $8 million above the fiscal 
year 2003 enacted level. We would use the $8 million to finance 
increases in labor costs and efforts to improve planning and management 
capabilities.
Flood Control and Coastal Emergencies
    As discussed above, the budget includes $70 million for this 
account to ensure that the Corps has adequate funding available for 
emergency preparedness and response to actual emergency events.
                               conclusion
    I believe the President's fiscal year 2004 budget for the Army 
Civil Works program is balanced and will make productive contributions 
to the economic and environmental well-being of the Nation. The budget 
continues support to ongoing work, emphasizes primary missions, and 
applies resources to areas likely to have the greatest national 
benefit. Providing the requested funding for the Army Civil Works 
program is a wise investment in the Nation's future.
    Thank you.

 TABLE 1.--DEPARTMENT OF THE ARMY CORPS OF ENGINEERS--CIVIL WORKS FISCAL
                            YEAR 2004 BUDGET
------------------------------------------------------------------------
                                                             Amount
------------------------------------------------------------------------
Requested Funding:
    General Investigations............................     $100,000,000
    Construction......................................    1,350,000,000
    Operation and Maintenance.........................    1,939,000,000
    Regulatory Program................................      144,000,000
    Flood Control, Mississippi River and Tributaries..      280,000,000
    General Expenses..................................      171,000,000
    Flood Control and Coastal Emergencies.............       70,000,000
    Formerly Utilized Sites Remedial Action Program...      140,000,000
                                                       -----------------
      TOTAL...........................................    4,194,000,000
                                                       =================
Sources of Funding:
    General Fund......................................    2,947,000,000
    Harbor Maintenance Trust Fund.....................      812,000,000
        (O&M).........................................     (600,000,000)
        (Construction--Disposal Facilities)...........       (7,000,000)
        (Construction--Legislative Proposal)..........     (205,000,000)
    Inland Waterways Trust Fund.......................      256,000,000
        (Construction)................................     (110,000,000)
        (O&M--Legislative Proposal)...................     (146,000,000)
    Special Recreation User Fees--O&M.................       34,000,000
    Power Marketing Admin.--O&M Leg. Proposal.........      145,000,000
                                                       -----------------
      TOTAL...........................................    4,194,000,000
                                                       =================
Additional New Resources:
    Rivers and Harbors Contributed Funds..............      278,000,000
    Bonneville Power Administration...................      143,205,000
    Coastal Wetlands Restoration Trust Fund...........       57,680,000
    Permanent Appropriations..........................       15,605,000
                                                       -----------------
      TOTAL...........................................      494,490,000
                                                       =================
      Total Program Funding...........................    4,688,490,000
------------------------------------------------------------------------


                                        TABLE 2.--CONSTRUCTION, GENERAL\1\--FISCAL YEAR 2004 BUDGETED PROJECTS WITH BENEFIT-COST DATA SHOWN AT 7 PERCENT
                                                                                     [In thousands of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         7 PERCENT RATE
                                                            ------------------------------------------------------------------------               PRES BUD     NO INFL     NO INFL     NO INFL
DIV                           NAME                                                                                        NET BENE/  NO INFL TOT    FISCAL    FED BAL TO   TOTAL N-     BAL TO
                                                               AVG ANN     AVG ANN    7 PERCENT    AVG ANN     AVG ANN       ANN       FED COST    YEAR 2004   COMPLETE    FED COST      COMPL
                                                               REM BEN    REM COST    RB/RC\2\     CUR BEN    CUR COST     COST\3\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 LR INDIANA HARBOR (CONFINED DISPOSAL FACILITY), IN            21,669       5,500        3.10      21,669       6,987        2.10       40,000       5,700      18,837      38,000      24,691
 LR INDIANAPOLIS, WHITE RIVER (NORTH), IN                       3,445         704        4.89       3,445       1,349        1.55       12,857       2,600       5,865       4,286       1,366
 LR KENTUCKY LOCK AND DAM, TENNESSEE RIVER, KY                 66,509      26,753        2.49      66,509      41,741         .59      579,050      24,866     439,878  ..........  ..........
 LR LITTLE CALUMET RIVER, IN                                   10,074       5,130        1.96      18,578      11,722         .58      139,000       3,800      47,327      51,000      15,198
 LR LOCKS AND DAMS 2, 3 AND 4, MONONGAHELA RIVER, PA          157,204      60,486        2.60     157,204      82,303         .91      702,966      35,000     424,488  ..........  ..........
 LR MARMET LOCK, KANAWHA RIVER, WV                             66,109      11,400        5.80      66,109      18,900        2.50      324,706      52,154     186,764  ..........  ..........
 LR MCALPINE LOCKS AND DAM, OHIO RIVER, KY & IN                53,957      20,102        2.68      53,957      31,808         .70      324,000      26,100     209,304  ..........  ..........
 LR MCCOOK AND THORNTON RESERVOIRS, IL                        109,912      57,336        1.92     109,912      61,715         .78      572,000      18,000     499,294     164,000      47,064
 LR METROPOLITAN LOUISVILLE, BEARGRASS CREEK, KY                2,652         263       10.08       2,652         977        1.71        7,895       1,400       1,847       4,251         196
 LR METROPOLITAN LOUISVILLE, POND CREEK, KY                     4,527         480        9.43       4,763       2,349        1.03       13,414       2,500         641       5,772         889
 LR METROPOLITAN REGION OF CINCINNATI, DUCK CREEK, OH           3,821       2,376        1.61       4,198       3,681         .14       31,743       8,500      13,823       4,200         814
 LR MILL CREEK, OH                                             51,544      53,043         .97      52,550      82,743       -0.36      154,156       3,900      45,952     215,000     127,270
 LR OHIO RIVER GREENWAY PUBLIC ACCESS, IN                       7,401       3,082        2.40       7,401       3,761         .97       16,900       1,000      12,535      16,900      15,280
 LR OLMSTED LOCKS AND DAM, OHIO RIVER,  IL & KY               719,817      46,737       15.40     720,430     144,109        4.00    1,003,000      73,000     287,536  ..........  ..........
 LR ROBERT C BYRD LOCKS AND DAM, OHIO RIVER, WV & OH          307,716       2,164      142.20     307,716      18,686       15.47      380,626       2,500      11,916  ..........  ..........
 LR WEST COLUMBUS, OH                                          24,050       1,211       19.86      24,050      13,376         .80       96,937       1,800       3,330      36,200       3,800
 LR WINFIELD LOCKS AND DAM, KANAWHA RIVER,  WV                103,734       2,491       41.64     103,734       7,239       13.33      235,462       2,000       5,538  ..........  ..........
 MV CHAIN OF ROCKS CANAL, MISSISSIPPI RIVER, IL (DEF            2,647       1,000        2.18       2,647       1,213        1.18       30,861       2,300      21,309  ..........  ..........
     CORR)
 MV COMITE RIVER, LA                                           24,904      13,202        1.89      24,904      15,033         .66      103,000       2,000      85,639      42,000      18,392
 MV CROOKSTON, MN                                                 769          89        8.64       1,118         739         .51        6,830       1,043  ..........       3,670  ..........
 MV EAST ST LOUIS, IL                                          22,778         920       21.51      22,778       1,059       20.51       54,638         965      22,319      16,000       4,441
 MV GRAND FORKS, ND--EAST GRAND FORKS, MN                      32,627      18,322        1.78      32,627      32,400         .01      202,700      23,496      90,263     193,300      89,856
 MV INNER HARBOR NAVIGATION CANAL LOCK, LA                    110,800      54,317        2.04     110,800      60,115         .84      625,000       7,000     530,851      60,000      48,876
 MV J BENNETT JOHNSTON WATERWAY, LA                            53,351       7,213        7.40     133,284     137,854       -0.03    1,917,456      13,700     140,633      93,832      45,538
 MV LAKE PONTCHARTRAIN AND VICINITY, LA (HURRICANE             14,512       4,540        3.20      95,771      68,669         .39      515,000       3,000      72,353     200,000      42,038
     PROTECTION)
 MV LAROSE TO GOLDEN MEADOW, LA (HURRICANE PROTECTION)          1,453          69       21.06       4,146       2,172         .91       80,300         461       1,905      34,700       1,416
 MV LOVES PARK, IL                                                765         345        2.22       3,056       2,161         .41       23,625       5,785  ..........       8,669  ..........
 MV MERAMEC RIVER BASIN, VALLEY PARK LEVEE, MO                  2,773       1,001        2.54       2,773       1,091        1.54       44,966       2,000      23,504      11,233  ..........
 MV MISS RIVER BTWN THE OHIO AND MO RIVERS (REG WORKS),       261,809       7,225       21.42     261,809      12,225       20.42      257,038       1,700      50,462  ..........  ..........
     MO & IL
 MV MISSISSIPPI RIVER SHIP CHANNEL, GULF TO BATON ROUGE,      972,000      59,000       16.47   1,350,000     145,000        8.31      175,000         196     147,042     404,000     387,727
     LA
 MV NEW ORLEANS TO VENICE, LA (HURRICANE PROTECTION)            2,435       1,152        2.11      14,999      14,143         .06      174,000       2,000      22,844      70,000      27,282
 MV SHEYENNE RIVER, ND                                          6,412         253       25.34      22,684       2,375        8.55       35,900       3,367  ..........      13,300  ..........
 MV SOUTHEAST LOUISIANA, LA                                    54,877      14,738        3.72      54,877      17,957        2.06      508,000      16,500     157,869     172,000      59,909
 MV WEST BANK AND VICINITY, NEW ORLEANS, LA                    71,282       9,516        7.49      98,682      19,465        4.07      190,000      35,000      77,213     102,500      49,529
 NA AIWW BRIDGE AT GREAT BRIDGE, VA                             4,084       2,329        1.75       4,084       3,832         .07       37,243       9,706       9,217       8,875       4,524
 NA DELAWARE RIVER MAIN CHANNEL, NJ,  PA & DE                  24,659      22,000        1.01      24,659      24,393         .01      155,825         300     137,653      88,980      71,011
 NA NEW YORK AND NEW JERSEY HARBOR,  NY & NJ                  709,196     243,880        2.91     709,196     263,760        1.69    1,679,700     115,000   1,113,561   1,524,100   1,242,079
 NA PASSAIC RIVER PRESERVATION OF NATURAL STORAGE AREAS,        1,461       1,135        1.29       1,826       1,418         .29       19,500       1,000       8,159       1,700       1,700
     NJ
 NA RARITAN RIVER BASIN, GREEN BROOK SUB-BASIN, NJ             43,553      21,075        2.07      43,553      31,419         .39      304,400       6,488     249,873     102,500      82,409
 NA WYOMING VALLEY, PA (LEVEE RAISING)                         27,143       3,877        7.00      27,143      12,832        1.12      129,422      10,021      24,271      43,602       5,952
 NW BIG SIOUX RIVER, SIOUX FALLS, SD                            3,822       1,877        2.04       3,822       3,296         .16       30,869       6,000      13,280      10,404       2,238
 NW BLUE RIVER BASIN, KANSAS CITY, MO                           2,564       1,108        2.31       2,564       1,237        1.07       11,821       2,000       7,330       6,505         197
 NW BLUE RIVER CHANNEL, KANSAS CITY, MO                        16,697       3,062        5.45      43,519      14,981        1.90      215,724       6,000      22,506      32,500  ..........
 NW ELK CREEK LAKE, OR                                          3,606       4,689         .77       3,606      14,715       -0.75      179,400         500      67,188  ..........  ..........
 NW PERRY CREEK, IA                                             2,430       1,514        1.60       7,791       6,918         .13       58,638       2,200      17,658      38,232       3,051
 NW PIERRE, SD                                                  2,099       1,004        2.09       6,264       2,996        1.09       35,000       4,300       6,555  ..........  ..........
 NW WOOD RIVER, GRAND ISLAND, NE                                2,177          68       31.85       2,177       1,013        1.15        9,006       1,082  ..........       3,713  ..........
 PO KIKIAOLA SMALL BOAT HARBOR, KAUAI, HI                         631         172        3.67         631         453         .39        5,934       3,633         632         760          70
 PO MAALAEA HARBOR, MAUI, HI                                    2,407         740        3.25       2,407       1,025        1.35       14,212         191       9,565       1,589       1,570
 PO NOME HARBOR IMPROVEMENTS, AK                                3,608       3,000        1.20       3,608       3,098         .16       42,673       6,000      31,611       4,482       1,378
 PO ST PAUL HARBOR, AK                                          2,613       2,030        1.29       2,613       4,157       -0.37       47,944       3,826      19,962      10,501  ..........
 SA ARECIBO RIVER, PR                                           5,807       1,382        4.20       6,112       1,454        3.20       14,877       1,000       5,404      11,520       3,847
 SA BRUNSWICK HARBOR, GA                                        6,757       2,081        3.25       6,797       3,597         .89       55,200       4,500      36,974      23,700       9,792
 SA CANAVERAL HARBOR, FL                                        5,186       3,123        1.66       7,304       4,398         .66       85,301       2,000      47,054       4,968           8
 SA CHARLESTON HARBOR, SC (DEEPENING & WIDENING)               12,158       3,672        3.31      22,995      11,775         .95       98,200       5,000       4,556      40,100       5,043
 SA JACKSONVILLE HARBOR, FL                                     1,012       1,269         .80       3,080       2,255         .37       19,620       2,000       3,959      27,457       1,512
 SA MIAMI HARBOR CHANNEL, FL                                    6,497       4,706        1.38       8,779       6,358         .38       55,771       2,700      15,823      36,246      10,670
 SA MOBILE HARBOR, AL                                         105,308      65,587        1.61     105,308      64,337         .64      315,000       2,003     283,085     260,000     249,673
 SA OATES CREEK, RICHMOND COUNTY, GA (DEF CORR)                   190          62        3.06         190         167         .14       11,094         500  ..........       3,699  ..........
 SA PASCAGOULA HARBOR, MS                                       2,572         600        4.29       2,572       3,000       -0.14       37,678       2,989  ..........      19,000       1,698
 SA PORTUGUES AND BUCANA RIVERS, PR                             7,040       1,359        5.18      46,934       9,060        4.18      430,232       5,200      24,201     144,757      24,139
 SA RICHARD B RUSSELL DAM AND LAKE, GA & SC                     5,480         597        9.18     126,165      43,319        1.91      619,210       4,328       5,275       3,260       1,360
 SA RIO DE LA PLATA, PR                                         9,490       6,024        1.58      10,204       6,450         .58       58,713       1,100      50,697      33,148      13,145
 SA RIO PUERTO NUEVO, PR                                       45,686      18,208        2.51      60,915      24,277        1.51      293,383      16,500     185,878     101,813      40,243
 SA ROANOKE RIVER UPPER BASIN, HEADWATERS AREA, VA              4,632       2,760        1.68       4,632       3,843         .21       42,000       2,000      30,097      22,000      15,349
 SA WILMINGTON HARBOR, NC                                      14,468       6,124        2.36      39,292      26,532         .48      290,000       9,650     115,583     141,000      33,655
 SP ALAMOGORDO, NM                                              8,327       1,928        4.32       8,327       3,625        1.30       38,100       3,500      18,942      12,700       5,740
 SP AMERICAN RIVER WATERSHED (FOLSOM DAM MODIFICATIONS),       30,700      14,420        2.13      30,700      17,453         .76      119,700       4,000      95,883      64,400      51,517
     CA
 SP AMERICAN RIVER WATERSHED, CA                               42,300       6,890        6.14      42,300      18,439        1.29       90,100       4,000  ..........      29,990  ..........
 SP EL PASO, TX                                                 6,366       1,065        5.98      10,873      10,569         .03      122,800       2,800       1,538      39,690         295
 SP GUADALUPE RIVER, CA                                        25,785       5,829        4.42      25,785      14,808         .74      127,950      13,000      17,611      98,920      15,665
 SP KAWEAH RIVER, CA                                            3,954         692        5.71       3,954       3,638         .09       27,800       8,400  ..........      21,700  ..........
 SP MARYSVILLE/YUBA CITY LEVEE RECONSTRUCTION, CA              25,530          90      283.67      25,530       4,326        4.90       37,100         500         300      12,400  ..........
 SP MID-VALLEY AREA LEVEE RECONSTRUCTION,  CA                   4,126       1,662        2.48       4,126       2,487         .66       24,400         500       9,516       8,100       3,402
 SP NAPA RIVER, CA                                             15,761       7,992        1.97      15,761      15,347         .03      122,200       7,500      82,648     123,200      20,663
 SP OAKLAND HARBOR (50 FOOT PROJECT), CA                      185,000      23,012        8.04     185,000      23,580        6.85      133,300       7,000     108,594     129,600     107,305
 SP PETALUMA RIVER, CA                                            230         145        1.59       2,275       2,252         .01       20,100       2,000       1,742      11,700  ..........
 SP SANTA ANA RIVER MAINSTEM, CA                              113,409      28,016        4.05     114,822      89,367         .28      992,000      15,700     247,497     451,000     140,308
 SP SOUTH SACRAMENTO COUNTY STREAMS, CA                        20,266       4,532        4.47      20,266       5,405        2.75       45,600       2,100      40,023      24,700       9,230
 SP TROPICANA AND FLAMINGO WASHES, NV                          18,934       2,686        7.05      22,276      19,854         .12      212,900      23,300      17,518      75,100       6,540
 SP TULE RIVER, CA                                              2,112       1,728        1.22       2,112       1,970         .07       16,300       1,600      13,540       8,000       1,300
 SP UPPER SACRAMENTO AREA LEVEE RECONSTRUCTION, CA              1,300         174        7.47       1,300         883         .47        7,600       1,000       1,650      22,600  ..........
 SW ARKANSAS CITY, KS                                           7,980         482       16.56       7,980       2,402        2.32       23,477       2,600       2,192       7,892         589
 SW BRAYS BAYOU, HOUSTON, TX                                   73,514      25,687        2.86      88,892      26,885        2.31      284,479       4,700     262,268     160,720     126,719
 SW CHANNEL TO VICTORIA, TX                                     5,587         479       11.67       5,587       2,672        1.09       31,686       2,966  ..........       6,530  ..........
 SW HOUSTON-GALVESTON NAVIGATION CHANNELS, TX                  87,232      20,041        4.35      87,232      44,464         .96      433,988      18,726     225,720     148,210      70,251
 SW JOHNSON CREEK, UPPER TRINITY BASIN, ARLINGTON, TX           1,119         550        1.87       1,119         598         .87       18,800       2,200       2,187       8,240  ..........
 SW MONTGOMERY POINT LOCK AND DAM, AR                          20,035      14,000        1.10      20,068      18,145         .11      261,500      20,000      30,056  ..........  ..........
 SW NECHES RIVER AND TRIBUTARIES SALTWATER BARRIER, TX          8,559         401       21.34      22,647       4,567        3.96       43,080       4,108  ..........      14,360  ..........
 SW SIMS BAYOU, HOUSTON, TX                                   121,160       8,075       15.00     220,290      24,827        7.87      230,000      12,000      87,268     111,617      37,369
                                                          --------------------------------------------------------------------------------------------------------------------------------------
          TOTAL                                             5,264,654   1,093,850        4.81   6,271,796   2,028,045        2.09   18,447,576     789,250   7,473,381   6,307,293   3,434,778
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    NOTE: EC, EC 11-2-183, Page B-2-37 states: ``For beach erosion control projects where the initial fill has been completed and only periodic nourishment remains to be accomplished, enter:
      Not applicable because initial construction has been completed.'' This statement is used because the initial construction of the project is ``essentially complete'' and we are just
      ``maintaining'' it with the periodic renourishment. Benefit/cost data are also not required for Dam safety projects, Deficiency Correction projects, Major Rehabilitation or Environmental
      projects.
    \1\ Excludes MR&T projects.
    \2\ This column shows the Remaining benefit/Remaining Cost for each project calculated at a 7 percent discount rate.
    \3\ This column shows the Net Benefit-Cost ratio, i.e. the annual benefits less the annual costs divided by the annual costs, for each project calculated at a 7 percent discount rate.


    Mr. Brownlee. I want to take one more moment, sir. As most 
of you know, about a year ago, I was appointed as the Acting 
Assistant Secretary of the Army for Civil Works in addition to 
my duties as the Under Secretary of the Army. And I have to 
tell you I anticipated that with some dread when I heard it was 
coming, because this is probably the part of the Army that I 
knew the least about, and the issues were some in which I quite 
frankly did not have a strong interest.
    But after almost 1 year in this capacity, I just want to 
tell the committee that it has been an absolute pleasure for me 
to work on even these difficult and very important issues 
because of the opportunity to work with the people in the Corps 
of Engineers and in the Civil Works secretariat.
    I have over 40 years of uninterrupted military and 
government service, and I have never met people that are more 
dedicated and capable than these folks in the Corps of 
Engineers. They serve the Nation very, very well, both at home 
and abroad. I have seen the results of their efforts and I just 
could not appear here without telling you how very proud I am 
to represent them in some capacity, to tell you that the 
American people and you can take great pride in what they do. 
They serve the Army and the Nation exceedingly well, and so it 
is a pleasure for me and it is with a great deal of pride that 
I am here this morning.
    And with that, Mr. Chairman, I am here to report that the 
total Civil Works budget for fiscal year 2004 is $4.2 billion. 
This is approximately the same amount as the total Civil Works 
budget for 2003.
    The budget places priority on ongoing studies and projects, 
and the Corps' primary mission areas of commercial navigation, 
flood, and storm damage reduction, and aquatic ecosystem 
restoration. The budget emphasizes completing the ongoing 
construction projects that have completed the executive branch 
review process, and are economically justified, environmentally 
acceptable, technically sound, and consistent with cost-sharing 
policies.
    The budget provides sufficient funding for 13 projects that 
can be physically completed in fiscal year 2004, and for eight 
other ongoing projects that are high priorities of the 
administration as well as substantial funding for the flood 
protection projects on the main stem of the Mississippi River. 
Consistent with the focus on projects that already are under 
construction, the budget limits funding to plan, design or 
initiate new projects.
    However, the budget does provide funding for 22 ongoing 
design efforts that are estimated to provide substantial 
economic and environmental returns and that are nearing 
completion.
    The budget includes a number of studies and management 
initiatives that are designed to support the administration's 
priorities, to improve program effectiveness, and to improve 
the quality and objectivity of project planning and review.
    The budget includes funding for reconnaissance studies that 
exemplify the watershed-based approach to solving water 
problems. In addition, the budget includes $2 million for an 
analysis of whether completed Corps projects are delivering 
benefits as planned.
    Further, the budget includes $3 million to institute an 
independent review of proposed projects that are likely to be 
costly, controversial, or complex.
    The budget focuses navigation, operation and maintenance 
funding on harbors and waterways with high volumes of 
commercial traffic. The budget limits operations and 
maintenance funding for those shallow draft harbors and inland 
waterways that have little commercial use and includes $1 
million to study long-term options for operation and 
maintenance of those projects.
    The budget emphasizes anti-terrorist protection of Civil 
Works projects and facilities, and includes $104 million to 
improve the protection of facilities where the consequences of 
an attack would be great.
    The budget for the regulatory program will enable continued 
improvements in protection of the Nation's wetlands and in the 
efficiency of permit reviews and decision making. The budget 
provides $70 million for the Flood Control and Coastal 
Emergencies account. This amount will enable us to respond to 
major emergency and to finance most, if not all, recovery 
costs.
    The budget includes legislative proposals to expand the 
uses of the Inland Waterways Trust Fund and the Harbor 
Maintenance Trust Fund. The budget also includes a legislative 
proposal for Federal power marketing administrations to 
directly finance the specific operation and maintenance costs 
of Corps of Engineers hydropower facilities.
    The Civil Works program is separately accountable to the 
President for implementing the President's management agenda. 
We are making progress on improving performance planning, 
financial management, human capital planning, competition 
planning and E-government.
    In summary, I believe the fiscal year 2004 Civil Works 
budget is balanced in accordance with the Nation's priorities 
and will make productive contributions to the economic and 
environmental well-being of our Nation.
    I look forward to working with this subcommittee on these 
important issues and appreciate your continuing support. Thank 
you.
    Senator Cochran. Thank you, Mr. Secretary. General Flowers, 
do you have a statement?
    General Flowers. Yes, sir.

           STATEMENT OF LIEUTENANT GENERAL ROBERT B. FLOWERS

    General Flowers. Mr. Chairman and distinguished members of 
the subcommittee, I am again honored to be testifying before 
you, along with Under Secretary Brownlee on the President's 
fiscal year 2004 budget for the Army's Civil Works Program.
    Today, thanks to this subcommittee's strong support, the 
Civil Works program is balanced, responsive and highly 
productive. And I look forward to your continued partnership in 
this important program that is so broadly beneficial to the 
Nation.
    My complete statement covers more details on the fiscal 
year 2004 program, the backlog, future water challenges, 
transforming the Corps, our business management system, and the 
overall value of the Corps to the Nation's economy and its 
national defense. With your permission, I will summarize some 
of these major points.
    First, a word about the President's budget and the value of 
Civil Works to the Nation's economy and the environment: We 
will work aggressively to make the most efficient use possible 
of the fiscal year 2004 President's budget for the Army Corps 
of Engineers. The budget funds the critical water resources 
infrastructure that has improved the quality of our citizens' 
lives and provided a foundation for the economic growth and 
development of this country.
    Our projects for navigation, flood protection, ecosystem 
restoration, hydropower generation and recreation directly 
contribute to the national economic might. The stream of 
benefits realized is reduced transportation costs, avoided 
flood and storm damages and improvements in environmental value 
are considerable.
    Just a few numbers in which you may be interested: The 
navigation program you fund enables 2.4 billion tons of 
commerce to move on the navigable waterways. The U.S. 
Department of Transportation estimates that these cargo 
movements have created jobs for 13 million people.
    Another fact: Corps flood damage reduction structures save 
taxpayers $21 billion in damages every year in addition to the 
lives they save. And another: Private industry contractors 
carry out virtually all of our construction work and over 50 
percent of our civil, planning and engineering, money that goes 
directly into the economy.
    This budget also includes funding to support watershed 
studies. These studies will allow us to work collaboratively 
with many stakeholders. With the complexity of water problems 
today, we believe this is the direction we must take to develop 
the best, most comprehensive solutions.
    Moving now to our backlogs, we estimate it will cost more 
than $21 billion to complete the construction projects in the 
Construction, General, Program funded in the fiscal year 2004 
budget.
    On the maintenance backlog, we continue to be challenged as 
well. You can see from the numbers that I just cited on the 
value of Corps projects that our infrastructure is a critical 
element in a strong economy. Sustaining this level of service 
becomes more of a challenge, as our infrastructure ages.
    The funding required at the end of fiscal year 2004 to 
complete the high priority maintenance work in the Operation 
and Maintenance account is slightly over $1 billion. Now, that 
represents an increase of about $127 million over last year. I 
can assure that I will continue to do all that I can to make 
these programs as cost effective as possible.
    Next I would like to talk briefly about future water 
challenges and a few thoughts about a need for a national water 
policy. Last fall, the American Water Resources Association 
sponsored a seminar on the need for a more comprehensive water 
policy in the Nation. Conflicting demands for water are 
increasing across the country and exist in almost every major 
watershed.
    Solutions to these complex problems will not be easy 
without significant changes in our evolving national water 
policy. Development of such policy will, in turn, require a 
collaboration of many government organizations at all levels.
    You have my assurance that the Corps stands ready to assist 
you and the administration in this effort.
    Turning now to the issue of Corps transformation: There are 
many interested in transforming the Corps, inside and outside 
of the organization. Some may have the larger goal of changes 
in current water policy in mind. Others may want us to operate 
more efficiently and effectively. We are listening to all of 
these good ideas. And I have met with individuals, industry 
groups and interest groups to hear what they have to say.
    I have issued communications principles to ensure that all 
within the Corps are practicing open, effective, and timely 
two-way communication with the entire community of water 
resources interests.
    And let me assure you, I am committed to working with you 
and all who are interested and to do all in my power to 
transform the Corps to meet the Nation's needs.
    And finally, a subject dear to my heart, the value of the 
Civil Works program to national defense: All of you can be 
proud that the Civil Works program is a valuable asset in 
support of the National Security Strategy in many ways. For 
instance, we have a trained engineering workforce, with world-
class expertise, capable of responding to a variety of 
situations across the spectrum of national defense. In fact, 
skills developed in managing Corps projects transfer to most 
tactical engineering-related operations.
    As an example, to date, 250 civilian members of our 
byproduct Civil Works Program team have volunteered for 
deployment in support of Operation Enduring Freedom, providing 
engineering, construction, and real estate support. They wear 
uniforms like those of active duty military personnel and, by 
civilian standards, live under spartan conditions. 
Nevertheless, they are inspired by knowledge that they are 
participating in an important mission.

                          PREPARED STATEMENTS

    In summary, the Corps is committed to staying at the 
leading edge in providing service to the Nation. And I truly 
appreciate your continued support to this end.
    Thank you, sir, and members of the committee. This 
concludes my statement.
    [The statements follow:]
       Prepared Statement of Lieutenant General Robert B. Flowers
                              introduction
    Mr. Chairman and Distinguished Members of the Subcommittee: I am 
honored to be testifying before your subcommittee today, along with the 
Acting Assistant Secretary of the Army for Civil Works, the Honorable 
Les Brownlee, on the President's Fiscal Year 2004 Budget for the United 
States Army Corps of Engineers' Civil Works Program.
    My statement covers the following 6 topics:
  --Summary of Fiscal Year 2004 Program Budget,
  --Civil Works Program Backlogs,
  --Future Water Challenges,
  --Civil Works Program Transformation,
  --Need for a More Robust Business Management System, and
  --Other Thoughts.
               summary of fiscal year 2004 program budget
Introduction
    This is a good budget. New funding for the Civil Works Program, 
including the Direct and Reimbursed programs, is expected to approach 
$5.410 billion.
    As shown in Table 1, Direct Program funding, including 
discretionary and mandatory funding appropriated directly to the Corps, 
totals $4.688 billion. Discretionary funding, including amounts 
ultimately replaced by mandatory funding, totals $4.194 billion; 
additional mandatory funding totals $494 million.
    Reimbursed Program funding is projected to be $722 million.
Direct Program
    The proposed budget reflects the Administration's commitment to 
continued sound development and management of the Nation's water and 
related land resources. It provides for continued efficient operation 
of the Nation's navigation, flood protection, and other water resource 
management infrastructure, fair regulation of the Nation's wetlands, 
and restoration of the Nation's important environmental resources, such 
as the Florida Everglades.
    The budget provides for continued funding of nearly all policy-
consistent studies and projects underway. It also provides for funding 
of 5 new reconnaissance studies under the General Investigations (GI) 
program.
Reimbursed Program
    Through the Interagency and Intergovernmental Support Program we 
help non-DOD Federal agencies, State, and other countries with timely, 
cost-effective implementation of their programs, while maintaining and 
enhancing capabilities for execution of our Civil and Military Program 
missions. These customers rely on our extensive capabilities, 
experience, and successful track record. The work is principally 
technical oversight and management of engineering, environmental, and 
construction contracts performed by private sector firms, and is fully 
funded by the customers.
    Currently, we provide reimbursable support for about 60 other 
Federal agencies and several State and local governments. Total 
reimbursement for such work in fiscal year 2004 is projected to be $722 
million. The largest share--nearly $165 million--is expected from the 
Environmental Protection Agency (EPA) for cleanup of wastes at numerous 
sites under its Superfund program. Ninety percent of Reimbursed Program 
funding is provided by other Federal agencies.
Staffing
    Total staffing for the Civil Works Program for fiscal year 2004 is 
24,800 FTEs, unchanged from fiscal year 2003. Of the total, 23,700 FTEs 
are for the Direct Program and 1,100 FTEs are for the Reimbursed 
Program. Total staffing is allocated 90.6 percent to districts, 4.9 
percent to laboratories and other separate field operating agencies, 
2.7 percent to division offices, and 1.8 percent to headquarters.
                      civil works program backlogs
Introduction
    In the broadest sense, ``backlog'' is unfunded work. For the Civil 
Works Program, it is defined more specifically, as the Federal share of 
unfunded continuing and future work at some point in time, e.g., the 
beginning of some funding period, such as fiscal year 2004. This 
definition can be further variously qualified. Such continuing and 
future work could include, for example, only work that is currently 
programmed on projects now actively under physical construction, while 
excluding such work where a project has not yet begun physical 
construction or where physical construction has been suspended for more 
than a year.
Construction Program
    At the end of fiscal year 2004, it will cost more than $21 billion 
to complete the construction projects of the Construction, General, 
Program funded in the fiscal year 2004 budget, which represents 
essentially no change from last year. The fiscal year 2004 budget 
focuses resources on these projects as part of a comprehensive strategy 
that would deliver benefits more quickly to the many Americans who rely 
on worthy projects already underway, while increasing the net return 
from the Nation's investment in the Civil Works program.
    If one were to add the costs of other conceivable work on 
construction projects not supported in the budget; on proposed projects 
that are in the planning stage or undergoing pre-construction 
engineering and design, and potential projects that already have 
advocates but are not yet officially on the drawing board, the total 
costs would mount quickly.
Maintenance Program
    Water and related land resource management facilities of the Civil 
Works Program are vast. As stewards of this infrastructure, we are 
challenged to ensure that it continues to provide an appropriate level 
of service to the nation. Sustaining such service, and the resultant 
flows of benefits, through proper operation and maintenance projects, 
is becoming increasingly more difficult because the costs of these 
efforts are growing as our infrastructure ages.
    To facilitate sensible budgeting, the maintenance backlog is 
prioritized into two parts--high and lower priority work. The high 
priority work includes maintenance would ensure attainment of 
performance goals--specifically, providing continued levels of 
service--in the budget year. Delay in accomplishment of this work could 
result in more extensive and costly repairs or an increased risk of 
falling short of performance goals. The lower priority work is less 
urgent. It includes routine maintenance, major repairs, replacement of 
outdated or worn facilities, management improvement studies, and 
correction of environmental deficiencies.
    At the end of fiscal year 2004, it will cost more than $1 billion 
to complete the high priority maintenance work of the Operation and 
Maintenance, General, Program funded in the fiscal year 2004 budget, 
which represents an increase of $127 million over last year. More than 
half of this work is for navigation facilities, which consists largely 
of dredging and repair of structures such as locks, dams, breakwaters, 
and jetties. The balance of the high priority backlog in the Operation 
and Maintenance account is for flood damage reduction, recreation, and 
environmental stewardship, and hydropower generation facilities. It 
consists of work such as spillway repairs, seepage control, embankment 
toe protection, access road and recreation facility repairs, and 
environmental compliance actions.
    In our effort to reduce the maintenance backlog, we are looking 
closely at how we determine the appropriate level of service and are 
searching for ways to reduce costs and thereby accomplish more with 
available resources.
                        future water challenges
    The Nation is facing important water and related land resources 
management challenges with potentially serious implications. I would 
like to offer the following observations and interpretations:
  --As the world's climate changes, the prospect of changing hydrology 
        and water distribution and, in turn, environmental and 
        socioeconomic conditions, requires us to do a better job of 
        anticipating the need for changes in water and related land 
        resources management facilities, systems, and practices, and to 
        improve our methods for effecting such changes.
  --As global markets expand, international commerce will demand more 
        efficient domestic ports and harbors, and improved vessel and 
        intermodal cargo handling facilities.
  --With many properties and major populations located in the Nation's 
        floodplains, flooding will continue to be of concern. Moreover, 
        if current trends continue, flood-prone lands and natural flood 
        management systems will be compromised, and the threat of flood 
        damage will increase.
  --Ongoing migration of the Nation's population to coastal plains and 
        coasts, and attendant property development, will increase risks 
        of loss from coastal storms and hurricanes.
  --The ongoing migration to coastal plains and coasts will put 
        increasing pressure on coastal habitat, especially wetlands, 
        and other fish and wildlife ecosystems.
  --Through Water Resources Development Acts of 1996 and 1999 (WRDA 96 
        and WRDA 99), the American public placed the health of natural 
        ecosystems in the forefront of the Corps of Engineers' 
        priorities. These acts, providing additional authorities to the 
        Corps for aquatic ecosystem restoration, wetlands management, 
        and nonstructural floodplain management.
  --As the Nation's water and related land management infrastructure 
        ages, it must be rehabilitated, modified, replaced, or removed.
  --As the Nation's population grows, there will be growing conflicts 
        among multiple interests within watersheds wanting to use 
        available water and related lands for diverse needs.
  --The American public has a strong and growing interest in downsizing 
        the Federal Government and, in turn, its workforce. In light of 
        this, ongoing outsourcing and privatizing for accomplishment of 
        government work, including engineering, will increase. An 
        implication of this is that the nonfederal sector, including 
        state and private interests, will have to share greater 
        responsibility in water and related land resources management.
Policy for Complex Solutions
    Our current and future water resources challenges are complex, 
involving competing and conflicting demands on use of the Nation's 
limited water and related land resources. They require, and should lead 
to, significant further changes in our evolving national policy. 
Development of such policy will require collaboration of many 
government organizations, at all levels, working for the collective 
good of the Nation.
                   civil works program transformation
    Throughout its long and distinguished history, the Civil Works 
Program has continually changed in response to then-relevant factors, 
including advances in science, methods, and processes, changing public 
values and priorities, and laws. For our program to remain a viable 
contributor to national welfare, we must remain sensitive to such 
factors, and continue to reorient, rescope, and refocus the program in 
light of them. To that end, I'm committed to reforming the Civil Works 
Program to meet the Nation's current water and related land resource 
management needs.
    Advising me in my effort to reform the Civil Works Program is the 
newly formed Corps Reform Network, comprising all parties interested in 
improving our program. On 9 February 2003 the Steering Committee for 
the Corps Reform Network met at Corps headquarters in Washington, D.C. 
to further the effort.
    Let me tell you about some of the major steps we've already taken:
  --Last year I issued the Corps' Environmental Operating Principles--a 
        clear commitment to accomplishing our work in environmentally 
        sustainable ways--with the express purpose of instilling the 
        principles as individual values in all members of the Corps 
        team.
  --We've developed a rigorous training curriculum to improve our 
        planning capability. This will ensure that the best science is 
        applied in project development and that our planners will 
        integrate economics and ecology in developing Corps projects. 
        We're cooperating with major universities and have begun to 
        sponsor graduate education in water resources planning. We've 
        re-instituted our very successful Planning Associates Program.
          Our Fiscal Year 2004 Budget for the Research and Development 
        (R&D) Program includes funding to improve economic models; one 
        of our principal efforts will be to develop the Navigation 
        Economic Technologies program, focusing on economic methods and 
        tools for navigation evaluations designed to address, update, 
        and improve specific models, and to address modeling issues 
        raised by the Corps and others. We need to make substantial 
        modeling advances to support decision making on proposed major 
        investments.
  --We've redoubled our efforts to engage Federal, State, and local 
        agencies, stakeholders, and the public in meaningful dialogue.
  --The Corps and ASA (CW) have allocated additional resources to 
        improve our internal review capability, and are considering 
        other measures to further improve such capability.
    Let me also tell you about the major steps we'll be taking in the 
months ahead:
  --A report of the National Academy of Science (NAS) came out strongly 
        in support of an independent review process. We have proposed 
        $3 million in our fiscal year 2004 budget to initiate selected 
        independent reviews.
  --We have proposed an ex-post-facto study of a sample of Corps 
        projects in order to determine how well the projects are 
        delivering anticipated benefits and to apply lessons learned to 
        improve our current planning process. The fiscal year 2004 
        Budget includes $2 million for this important effort.
  --We'll be implementing every appropriate recommendation from the NAS 
        study on planning methodologies that Congress requested in WRDA 
        2000.
  --We'll be working with the Administration and Congress to establish 
        one or more national centers of expertise, staffed with some of 
        our best engineers, scientists, and economists, that will be 
        responsible for studies of projects that are likely to be 
        costly, complex, or controversial.
    We're committed to change that leads to open and transparent 
modernization of the Civil Works Program for the 21st Century. To this 
end, we're committed to continuing the dialogue with you and the Corps 
Reform Network Steering Committee. Additionally, I have issued 
communication principles to ensure open, effective, and timely two-way 
communication with the entire community of water resources interests. 
We know well that we must continue to listen and communicate 
effectively in order to remain relevant.
           need for a more robust business management system
Introduction
    We have a reputation as the world's premier public engineering 
organization, which we aim to keep. Our challenge, to this end, is to 
``stay at the leading edge'' in service to the Army, Federal 
Government, and Nation. The degree to which we will succeed will depend 
largely upon improved business operations. To enable providing service 
of highest relevance, we must improve our operations for more 
expeditious and productive performance. In recognition of this, I have 
been engaged, throughout my tenure as Chief, in an effort, initiated by 
my predecessor, to reengineer the organizations and business operations 
of the Corps of Engineers Civil Works and Military Programs. In that 
effort we have selected the project management way of doing business, 
or ``modus operandi,'' as the basis for developing a business 
management system and attendant organizations and operations. 
Accordingly, we have come to call our effort the Project Management 
Business Process (PMBP) Initiative.
Project Management Business Process Initiative
            Rationale for Selection
    Our philosophy is that everything we do is a project, and every 
employee is a member of some one or more project teams. Selection of 
the project management modus operandi as the basis for developing a 
business management system is consistent with this philosophy. 
Furthermore, the Corps has used project management principles and 
methods in accomplishment of much of its business throughout its 
existence, providing seamless, flexible, efficient, and effective 
service for its customers. Applying this highly successful model to all 
of our business was eminently logical.
            Purpose
    In order that our 41 districts, 8 laboratories, 2 centers, and 8 
divisions to work together as one United States Army Corps of Engineers 
(UCSACE), we must establish common business practices that transcend 
organizational and geographic boundaries. Accordingly, the purpose of 
our PMBP Initiative is to develop, implement, and sustain a set of 
modern, standardized business processes, based on industry's best 
business practices, and an automated information system (AIS) to 
facilitate use of the PMBP throughout USACE.
            Implementation
    The PMBP Initiative focuses on the business relationships between 
and among people, including customers and stakeholders; process, and 
communication. To create and sustain the PMBP we must examine and 
define, to the PMBP system, how we do our work. In the process, we are 
transforming ourselves into a customer-focused, team-based, learning 
organization. Implementation of PMBP will be accomplished in four 
steps, described below, under the aegis of subject matter experts from 
all functions and echelons of the Corps.
            Policy and Doctrine
    We started this initiative with development of the Engineer 
Regulation ER 5-1-11, entitled ``USACE Business Process,'' to set forth 
policy and doctrine on how we will do business. It outlines goals, 
objectives, and strategy for using teams to accomplish projects, with 
customers as members of such teams. The regulation outlines seven major 
imperatives which apply to all work of all the Corps, specifically, 
that
  --for any project there is one team and one project manager,
  --plan for success and keep commitments,
  --the project delivery team is responsible for project success,
  --measure quality with the goals and expectations in the Project 
        Management Business Process (PMBP),
  --manage all work with the PMBP Manual, using corporate automated 
        information systems,
  --build effective communications into all activities, and
  --use best practices and seek continuous improvement.
    This regulation is the foundation for the PMBP system. It 
emphasizes transformation of the Corps team into project-focused teams 
sharing resources Corps-wide, as necessary, to deliver quality projects 
on schedule.
            Business Process Manual
    The PMBP Manual provides guidance for achieving our policy and 
doctrine. It establishes standard business processes for Corps-wide 
application that:
  --ensure consistency in program and project execution,
  --focus on meeting customer expectations,
  --set parameters for means to measure progress across the entire 
        organization, and
  --enhance our ability to function both regionally and virtually with 
        efficient management of diverse resources.
    These standard business processes are used to accomplish project 
delivery and provide services. They enable sharing workforce resources 
throughout the Corps to complete projects. If a project delivery team 
needs someone with a particular skill to accomplish work on its 
project, it can borrow service of whomever may be available with that 
skill in any Corps office. The processes enable effective management of 
projects in all lines of business in our Civil Works and Military 
Programs. The processes are open for continuous improvement, giving all 
team members opportunity to change them for the better. This will lead 
to addressment of concerns of project managers, technical experts, and 
customers to assure improvements in quality, project performance, and 
customer satisfaction.
            Automated Information System
    Management of projects in accordance with the PMBP will be 
facilitated through use of ``P2''--an automated information system. 
This system, expanding upon and replacing PROMIS, will be used by the 
Corps team for project delivery in all lines of work. It comprises 
commercial-off-the-shelf (COTS) software configured with templates of 
our standard business processes to assist project delivery teams in 
managing their projects. The manufactures of this software--Oracle, 
Primavera, and Project Partners--are assisting the Corps in configuring 
the software to provide the templates.
    P2 software employs state-of-the-art technology embracing program 
and project management best-practices. It will become the principal 
tool of Corps project and technical managers in collecting, 
manipulating and storing program and project data. It will provide a 
single source of all project-related information for all programs and 
projects managed by field commands, and will interface with other 
modernized systems to assure single-source data entry. It will enable 
streamlined project and resource management, affording wider 
availability and Web interfaces. And, finally, because of lower costs 
to maintain and upgrade COTS software in future years, P2 will be more 
cost-effective than PROMIS.
            PMBP Training
    We have developed a training curriculum to promote PBBP as our new 
way of conducting business within the Corps and to guide individuals 
and organizations in the progressive development of skills for using 
PMBP. The curriculum promotes cultural change through individual self-
paced compact-disk courses followed by small group discussions on the 
courses. Each individual covers the material and shares his/her 
interpretation with others in facilitated small group discussions. This 
process promotes common understanding of PMBP, its purpose, the roles 
of individuals, and the means to develop projects though teamwork.
            Summary
    In summary, the PMBP system, including P2, is being implemented 
Corps-wide to manage all Corps projects more efficiently and 
effectively. Supporting policy and doctrine, definitions of our 
business processes, and curriculum are in now in place Corps-wide. The 
P2 part of the system will be completed and fully tested by the end of 
fiscal year 2003; however, to avoid disruption of fiscal year 2003 
financial closeout, we won't deploy P2 until mid-October. Once fully 
deployed, the PMBP system will greatly enhance our ability to better 
support the Army, other Federal agencies, and the Nation.
                             other thoughts
The National Welfare
    Water resources management infrastructure has improved the quality 
of our citizens' lives and provided a foundation for the economic 
growth and development of this country. Our systems for navigation, 
flood and storm damage reduction projects, and efforts to restore 
aquatic ecosystems contribute to our national welfare. The stream of 
benefits, realized as reduced transportation costs, avoided flood and 
storm damages, and improvements in environmental value can be 
considerable.
Research and Development
    Civil Works Program research and development provides the Nation 
with innovative engineering products, some of which can have 
applications in both civil and military infrastructure spheres. By 
creating products that improve the efficiency and competitiveness of 
the Nation's engineering and construction industry and providing more 
cost-effective ways to operate and maintain infrastructure, Civil Works 
Program research and development contributes to the national economy.
The National Defense
    The Civil Works Program is a valuable asset in support of the 
National Security Strategy in that it provides a way to maintain a 
trained engineering workforce, with world-class expertise, capable of 
responding to a variety of situations across the spectrum of national 
defense. This force is familiar with the Army culture and responsive to 
the chain of command. Skills developed in managing large water and land 
resource management projects transfer to most tactical engineering-
related operations. As a byproduct, Army Engineer officers assigned to 
the Civil Works Program receive valuable training, in contracting and 
managing large projects.
    Additionally, the Civil Works Program has provided, and continues 
to provide water and related land resources infrastructure critical to 
national defense. Likewise, it has accomplished and continues to 
accomplish research and development that support our homeland security 
and war-fighting capability.
Homeland Security
    The Corps is also a key member of the Federal Response Plan team 
with proven experience in support of FEMA's response to both natural 
disasters and events such as World Trade Center disaster (9/11).
    Following 9/11 we completed 306 security reviews and assessments of 
our inventory of locks, dams, hydropower projects and other facilities 
to determine vulnerability to terrorist threat and potential 
consequences of such an attack. We improved our security engineering 
capability and identified and prioritized critical infrastructure. 
Utilizing supplemental appropriations provided in fiscal year 2002 
(Public Law 107-117, $139M), we have initiated the design and 
implementation of security improvements on 85 of our current list of 
306 critical facilities. We have also initiated security improvements 
at administrative facilities to reduce risks to our employees.
    One hundred four million dollars of the Operations and Maintenance 
funds provided in this budget are targeted for facility security. We 
will direct funding to those priority projects at which there is 
potential for catastrophic consequences resulting in loss of lives or 
economic consequences of greater than $200 million, and continue 
security improvements at our administrative facilities. The 
vulnerability assessments produce a recommended system of improvements 
targeted to reduce risks associated with potential threats to 
facilities. Elements of the proposed systems can include cameras, 
lighting, fencing, structure hardening, and access control devices 
designed to improve detection and delay at each facility.
Support to War-fighting Efforts
    When the Army goes to war, personnel of the Civil Works Program 
provide vital information to the battlefield. Their knowledge of beach 
dynamics helps determine the sites for shore landings. Their expertise 
in soil mechanics determines the best routes for armored vehicles. 
Their experience in work on winter navigation helps the Army negotiate 
frozen rivers. And commanders at all levels make use of topographic 
products and satellite based navigation systems developed by the Corps.
                               conclusion
    The President's fiscal year 2004 Budget for the Civil Works Program 
is a good one. However, we must continue to find ways to reduce our 
costs and shift more of those remaining to direct beneficiaries of our 
services. Meanwhile, we will do our very best to execute the Civil 
Works Program for maximum benefit to the Nation.
    Under both our Civil Works and Military Programs, we are committed 
to staying at the leading edge in service to the Nation. In support of 
that, we are working with others to transform our Civil Works Program. 
We're committed to change that leads to open and transparent 
modernization of the Civil Works Program for the 21st Century. We also 
are strengthening our business management capability for best 
performance of both programs Corp-wide.
    Thank you, Mr. Chairman and Members of the Committee. This 
concludes my statement.
                                 ______
                                 
         Prepared Statement of Major General Robert H. Griffin
    Mr. Chairman and members of the Subcommittee, I am honored to 
testify before you as Director of Civil Works.
    I would like to note some highlights of the fiscal year 2004 budget 
for Remaining Items, which include the Army Corps of Engineers (Corps) 
nationwide programs and activities. These include the General Expenses 
appropriation, which provides for executive direction and management of 
the Civil Works program at the Corps Headquarters and the Division 
Offices.
       activities under the general investigations appropriation
Special Studies
    National Shoreline.--The budget includes the special study for 
fiscal year 2004. The National Shoreline study is an interagency effort 
to determine the extent and cause of shoreline erosion on all the 
coasts of the United States and to assess the economic and 
environmental impacts of that erosion. The study will analyze the 
appropriate levels of Federal and non-Federal participation and the 
advisability of using a systems approach to sediment management for 
linking the management of all projects in the coastal zone so as to 
conserve and efficiently manage the flow of sediment within littoral 
systems.
    Ex Post Facto.--The budget also includes the special study effort 
for fiscal year 2004, Ex Post Facto Benefit-Cost Studies of 15 to 25 
completed projects. The purpose of this study is to estimate benefit to 
cost ratios for projects as they were built and as the actual project 
outputs and services were delivered.
    Independent Review.--The activities of this program are to design 
and implement a review process that assures the proper level of review 
in accordance with the scope and complexity of the studies; to identify 
and secure a pool of highly qualified experts in each area of analysis 
to conduct the reviews; to facilitate the review; and to facilitate the 
resolution of issues and concerns identified during the review process.
Coordination with Other Federal Agencies, States, and Non-Federal 
        Interests
    The budget for Coordination with Other Federal Agencies, States, 
and Non-Federal Interests is $10.9 million. Following is a comparison 
of the fiscal year 2003 appropriation and the fiscal year 2004 budget 
for activities under this program.

------------------------------------------------------------------------
                                                            Fiscal Year
                        Activity                            2004 Budget
------------------------------------------------------------------------
Planning Assistance to States...........................      $6,000,000
Special Investigations..................................       2,200,000
Gulf of Mexico Program..................................         100,000
Chesapeake Bay Program..................................         100,000
Pacific Northwest Forest Case Study.....................         100,000
Interagency Water Resources Development.................       1,100,000
Interagency and International Support...................         150,000
Inventory of Dams.......................................         300,000
National Estuary Program................................         100,000
North American Waterfowl Management Plan................         100,000
Estuary Habitat Restoration Program.....................         100,000
Coordination with Other Water Resources.................         300,000
CALFED..................................................         100,000
Lake Tahoe..............................................         100,000
------------------------------------------------------------------------

    Estuary Programs.--The budget is $100,000 to continue cooperation 
with Federal and State agencies in the U.S. Environmental Protection 
Agency's National Estuary Program. In addition, the budget is $100,000 
for the Estuary Habitat Restoration Program. Funds for this initiative 
would be utilized to support the interagency council established in the 
Estuary Restoration Act of 2000. The council has responsibilities to 
develop a national strategy for restoration of estuary habitat and 
soliciting, reviewing and evaluating project proposals.
    Planning Assistance to States.--The budget of $6 million is a major 
portion of the Coordination with Other Federal Agencies, States, and 
Non-Federal Interests program. The fiscal year 2004 budget would enable 
the Corps to provide much needed planning and technical assistance for 
a variety of water resource efforts to States, territories, and 
Federally recognized Indian Tribes. The assistance is in the form of 50 
percent Federal, 50 percent non-Federal cost-shared reconnaissance 
level studies which provide information and guidance to help the non-
Federal sponsors become more active and effective working partners with 
the Federal government in resolving water resource problems. The 
studies may address a wide variety of water resource issues including 
environmental conservation/restoration, wetlands evaluation, flood 
damage reduction, coastal zone management, and dam safety. In fiscal 
year 2001, 160 studies were performed for 43 States, as well as seven 
studies for Federally-recognized Indian tribes.
    Special Investigations.--Another major portion of the fiscal year 
2004 budget is $2.2 million for Special Investigations. This program 
provides for the increasing interests in Corps capabilities and the 
continued growth in requests for investigations of nominal scope. The 
activities of this program include: special investigations and reports 
of nominal scope prepared pursuant to Congressional and other requests 
from outside the Corps of Engineers for information relative to 
projects or activities which have no funds; review of reports and 
environmental impact statements of other agencies; and review of 
applications referred to us by the Federal Energy Regulatory Commission 
for permits or licenses for non-Federal hydropower developments at, or 
affecting, Corps water resource projects.
    Interagency Water Resources Development.--The budget is $1.1 
million to conduct district activities, not otherwise funded, which 
require coordination effort with non-Federal interests. These 
activities include items such as meeting with City, County, and State 
officials to help solve water resources problems or to determine 
whether Corps programs are available and may be used to address the 
problems. This budget also provides $200,000 for two American Heritage 
River Navigators who are supported by the Corps of Engineers. These 
River Navigators provide direct support to the Community Partners for 
the New River, which flows through NC, VA, and WV; and for the Upper 
Mississippi River above St. Louis, MO.
    Gulf of Mexico Program.--The budget of $100,000 allows the Corps to 
continue involvement in this U.S. Environmental Protection Agency 
(EPA)-initiated program, which blends programs and resources of 
Federal, State, and local governments with the resources and 
commitments of business, industry, citizens groups and academia. The 
Gulf of Mexico Program is formulating and implementing creative 
solutions to economic and environmental issues with Gulf-wide and 
national implications. Hypoxia/nutrient enrichment and nonindigenous 
species are focus areas, which are linked to authorized Corps missions 
in the five-State program area.
    Chesapeake Bay Program.--The budget of $100,000 enables the Corps 
to continue participation in the EPA-initiated interagency program for 
the protection and restoration of the bay's natural resources. These 
natural resources have tremendous environmental and economic 
significance to the northeast region and to the Nation.
    Pacific Northwest Forest Case Study.--The budget of $100,000 is for 
the Corps to continue participation in the interagency program 
initiated by the White House's Council of Environmental Quality for 
ecosystem management of the public lands in the Pacific Northwest 
within the range of the Northern Spotted Owl.
    Interagency and International Support.--The $150,000 budget allows 
the Corps of Engineers to participate with other Federal agencies and 
international organizations to address problems of national 
significance to the United States. The Corps of Engineers has widely 
recognized expertise and experience in water resources, infrastructure 
planning and development, and environmental protection and restoration. 
In fiscal year 2002 and 2003, program funding included support to the 
State Department on Middle East and African infrastructure and water 
issues, the World Water Council, and the National Park Service and 
Environmental Protection Agency on homeland security.
    Inventory of Dams.--The $300,000 budget is for the continued 
maintenance and publication of the National Dam Inventory. This ongoing 
inventory maintenance and publishing effort is a coordinated effort 
involving data for the Federal and non-Federal Dam Safety community in 
cooperation with the Interagency Committee of Dam Safety. This 
inventory is now required for use by the Director of Federal Emergency 
Management Agency (FEMA) and the National Dam Safety Review Board in 
the allocation of dam safety program assistance funds to the various 
States.
    CALFED.--The budget of $100,000 allows the Corps to continue to 
play a role in the CALFED Bay-Delta process in fiscal year 2004. The 
CALFED Bay-Delta Program is a three-phased solution process for the 
development of a long-term comprehensive plan that will restore 
ecological health and improve water management for beneficial uses of 
the Bay-Delta system. This program is a joint effort between local land 
management agencies, the State of California, and the Federal 
Government.
    Lake Tahoe.--The budget of $100,000 is to allow the Corps to 
continue the coordination efforts to protect the natural, recreational 
and ecological resources in the Lake Tahoe Region associated with the 
Presidential Executive Order ``Federal Actions in the Lake Tahoe 
Region''.
    The budget is $300,000 for Coordination with Other Water Resource 
Agencies, including the Department of Agriculture and Regional Planning 
Commissions and Committees, and $100,000 to continue cooperation with 
Federal and State agencies and non-Federal interests in support of the 
North America Waterfowl Management Plan administered by the U.S. Fish 
and Wildlife Service.
Collection and Study of Basic Data
    The fiscal year 2004 budget for Collection and Study of Basic Data 
activities is $13.25 million. Following is a comparison of the fiscal 
year 2003 appropriation and the fiscal year 2004 budget for activities 
under this program:

------------------------------------------------------------------------
                                                            Fiscal Year
                        Activity                            2004 Budget
------------------------------------------------------------------------
Flood Plain Management Services.........................      $7,500,000
Stream Gaging (U.S. Geological Survey)..................         500,000
Precipitation Studies (National Weather Service)........         300,000
International Water Studies.............................         400,000
Hydrologic Studies......................................         400,000
Scientific and Technical Information Centers............         100,000
Coastal Field Data Collection...........................       2,500,000
Transportation Systems..................................         500,000
Environmental Data Studies..............................         100,000
Remote Sensing/Geographic Information System Support....         200,000
Automated Information System Support--Tri-Service CADD/          450,000
 GIS Technology Center..................................
Flood Damage Data.......................................         300,000
------------------------------------------------------------------------

    Flood Plain Management Services.--The largest portion of the 
Collection and Study of Basic Data program fiscal year 2004 budget is 
$7.5 million for the Flood Plain Management Services program. This 
program continues to be one of the most prevalent non-project services 
that the Corps provides for Federally recognized Indian Tribes, States, 
and local governments. By working together with State, local, and 
tribal land management decision makers, we are able to alert them to 
various flood hazards, promote prudent use of the flood plains, and 
help mitigate future losses to life and property. The active 
involvement of land management decision makers is the key to sound 
flood plain management in the United States. Significant flood events 
over the past several years have raised public awareness and increased 
the demand for information and assistance for mitigating flood losses. 
The funding will provide flood plain management services to State, 
regional, local governments, Indian Tribes, and other non-Federal 
public agencies who, in turn, invest their own funds to avoid flood 
hazards and make good use of the flood plains. This not only mitigates 
future losses to life and property but also reduces the need for costly 
Federal flood control works as well as the demand for other Federal, 
State, and local services such as providing major disaster assistance 
before, during, and after floods. Under this program, we also 
participate with the FEMA, the National Weather Service, and local 
governments in conducting critical pre-disaster hurricane evacuation 
and preparedness studies for mobilizing local community responsiveness 
to natural disasters in high hazard coastal areas of States and 
counties along the Atlantic Ocean and the Gulf of Mexico.
    Coastal Field Data Collection.--The fiscal year 2004 budget for 
this activity is $2.5 million to systematically acquire and assemble 
long-term baseline data for coastal regions. These data are necessary 
for adequate assessment of technical, economic, and environmental 
feasibility for a variety of Corps projects, including projects for 
coastal navigation, storm damage reduction, and mitigation of harbor 
entrance impacts on adjacent shores. Cost-effective mission 
accomplishment requires long-term and system/regional data that 
encompass winds, waves, currents, water levels, bottom configuration, 
sediment characteristics, and geomorphology. With 800 navigation 
projects to maintain and repair (25 percent are more than 50 years 
old), the costs attributable to having no data or poor data would be 
significant. Data to be collected either are unavailable in existing 
archives, are of uncertain or poor quality, or are too sparsely 
distributed temporally and/or spatially to have statistical value. The 
required data are regional in nature and not properly chargeable to 
authorized projects. It also takes many years of data to establish a 
statistically significant baseline to use in project studies. The value 
of program data and project-related data is maximized through the use 
of Corps-wide standards, routine updating of available data, 
utilization of a centralized data library on the world wide web, and 
dissemination over the Internet.
    Automated Information System Support--Tri-Service CADD/GIS 
Technology Center.--The fiscal year 2004 budget of $450,000 for the 
Tri-Service CADD/GIS Technology Center represents the Civil Works share 
of the total $3.341 million required to operate and maintain this 
important center of expertise. The bulk of the remainder of the total 
requirement is provided by OMA, the Navy, the Air Force, and the 
Marines, in accordance with a 1992 agreement, establishing a Tri-
Service center in order to minimize duplication of effort of the 
services. All phases of Corps work, including planning, real estate, 
design, construction, operations, maintenance and readiness benefit 
from CADD/GIS technologies.
    Scientific and Technical Information Centers.--Public Law 99-802, 
Federal Technology Transfer Act of 1986, requires technology transfer 
from Federal agencies to the private sector. The fiscal year 2004 
budget will be utilized to acquire, examine, evaluate, summarize, and 
disseminate newly published scientific and technical information 
generated within the Corps and other activities within the United 
States and abroad.
    Flood Damage Data Collection.--The fiscal year 2004 budget includes 
$300,000 to continue a program to improve the technical accuracy and 
quality of flood damage data including the relationship of flood 
characteristics to property damage. This program facilitates the timely 
collection of data when a damaging event occurs and the development of 
a national flood damage database to support local, State and Federal 
studies and research. Additionally, the program currently is developing 
generic flood damage and property valuation relationships that could be 
used Corps-wide. This will result in shorter, less-costly flood damage 
reduction studies.
Research and Development
    The fiscal year 2004 budget for Research and Development (R&D) 
under General Investigations is $22 million. The Civil Works R&D 
program is formulated to directly support the established business 
programs and strategic directions of the Civil Works Program including: 
Flood Damage Reduction, Inland and Coastal Navigation, Environment 
Restoration, Hydropower, Emergency Management, Water Supply and 
Regulatory. The Civil Works R&D requirements are primarily user driven 
and the effort is essentially a problem-solving process by which the 
Corps systematically examines new ideas, approaches, and techniques, 
with a view toward improving the efficiency of its planning, design, 
construction, operations and maintenance activities.
    Results of this R&D effort are directly incorporated into practice 
within the Civil Works Program through the Civil Works Guidance 
Maintenance Program involving revisions or additions to Engineer 
Regulations, Engineer Manuals, Technical Guidance Manuals, Engineer 
Technical Letters, or Guide Specifications. Numerous other means of 
technology transfer are also used such as formal training courses, 
workshops, INTERNET and technical publications. The Corps Civil Works 
R&D Program continues to provide practical end products and a high 
return on investment for the Corps and the Nation.
    In order to most effectively use the limited R&D resources and to 
avoid unnecessary duplication of research effort, the Civil Works R&D 
Program maintains aggressive external technical exchange and technology 
transfer programs with other Federal agencies and State and local 
governments including the TVA, Bureau of Reclamation, Bonneville Power 
Administration, Western Power Administration, the Soil Conservation 
Service, EPA, the Fish and Wildlife Service, NOAA, USGS, DOT, the Navy. 
The Corps also participates extensively with the Transportation 
Research Board, the Water Science and Technology Board, the National 
Research Council, the National Oceanographic Partnership Program, and 
the Federal Acid Mine Drainage Technology Institution in coordinating 
and leveraging research activities.
    The strategic emphases of the proposed fiscal year 2004 GI R&D 
program include:
  --Regional Sediment Management (RSM)
  --Systems-Wide Modeling, Assessment & Restoration Technologies 
        (SMART)
  --Technologies and Operational Innovations for Urban Watershed 
        Networks (TOWNS)
  --Common Delivery Framework (CDF)
  --Navigation Economic Technologies (NETS)
    Improved sediment management at navigation and flood damage 
reduction projects offers tremendous potential for future project cost 
reduction. Research in this area is focused on sedimentation prediction 
and control techniques, optimizing channel depths and dimensions 
including more cost-effective deep-draft channel design criteria to 
safely and efficiently accommodate future international shipping 
requirements, reduced dredging costs, increased navigation channel 
safety and reliability, and increased options and opportunities for 
beneficial uses of dredged sediment. Close coordination will be 
essential between this research area and the SMART research program 
discussed below.
    The Systems-Wide Modeling, Assessment & Restoration Technologies 
(SMART) Research Program addresses the Corps water resources needs at 
the system/watershed level. The objective of this research effort is to 
design state-of-the-science, user-oriented methods and procedures to 
restore and manage natural resources with application toward the total 
ecosystem/watershed. Research is also focused on environmental 
restoration technologies for a wide range of water resources management 
needs. The focus of this research enables the Corps to meet the legal 
requirements of the National Environmental Policy Act (NEPA) and the 
Endangered Species Act (ESA), while supporting critical technology 
needs of the major civil works business programs of Environmental 
Restoration, Navigation, and Flood Damage Reduction.
    The Technologies and Operational Innovations for Urban Watershed 
Networks (TOWNS) research will include the following major thrust 
areas: integrated decision support tools and forecasting methodologies 
for use in flood damage reduction that incorporate changing urban 
settings, climate changes and extreme events; technologies for 
sustainable urban flood damage reduction (structural and non-
structural); real-time surveys and system monitoring for improved 
condition assessment; and expedient and cost-effective flood fighting 
and related emergency operations.
    The objective of the Common Delivery Framework (CDF) research is to 
develop a new framework approach to managing software guidance, 
capabilities and resources for model/application developers in a 
consistent and corporate context that enables the Corps to reduce costs 
for developing and applying science and technology (S&T) products. The 
initial work will investigate geospatial S&T development in the areas 
of information security, metadata, interoperability, enterprise GIS, 
visualization, and informatics.
    The objective of the Navigation Economic Technologies (NETS) 
research program is to enhance and standardize evaluation tools and 
methods for shallow and deep draft navigation project life-cycle 
analysis. The NETS R&D program will develop peer-reviewed procedures 
and tools that will be used throughout the Corps by concentrating on 
the following areas: (a) expanded and improved capabilities to forecast 
navigation traffic in ports and on waterways; (b) improved tools and 
approaches to evaluate and perform calculations of transportation 
economic benefits and costs; (c) integration of tools and approaches 
for systems evaluation and management; (d) improved capabilities to 
integrate economic, environmental, and other factors for navigation 
system investment and management; (e) procedures for integrating 
uncertain variables within the economic evaluation of navigation; (f) 
extension of benefit evaluation to include congestion, air quality and 
other externalities; and (g) improved methods and data support for all 
modes of transportation of commodities from production site to ultimate 
consumption.
    Research and Development Cross-Cut.--The conference report, House 
Report number 102-177, accompanying the fiscal year 1992 Energy and 
Water Development Appropriations Act stated the conferees' concern with 
the trend of spreading research related programs throughout several 
appropriation accounts in the Civil Works budget, and directed the 
Corps to work with the committees to address this issue. In response to 
this interest by the committees, the following table has been developed 
to provide a consolidated display of all Civil Works research and 
development activities for which there is funding in the fiscal year 
2004 budget.

------------------------------------------------------------------------
                                                            Fiscal Year
                  Account and Activity                      2004 Budget
------------------------------------------------------------------------
GENERAL INVESTIGATIONS:
    Research and Development............................     $22,000,000
CONSTRUCTION, GENERAL:
    Aquatic Plant Control...............................       3,000,000
    Shoreline Erosion Control Development and                  6,000,000
     Demonstration Program..............................
OPERATION & MAINTENANCE, GENERAL:
    Coastal Inlet Research..............................       2,750,000
    Dredging Operations & Environmental Research........       6,755,000
    Aquatic Nuisance Control Research (formerly Zebra            725,000
     Mussel Control)....................................
                                                         ---------------
      GRAND TOTAL.......................................      35,230,000
------------------------------------------------------------------------

        activities under the construction, general appropriation
Continuing Authorities
    The fiscal year 2004 budget for the nine Continuing Authorities 
funded under Construction, General is $64.5 million. This is a decrease 
of $13.5 million from the fiscal year 2003 budget. The budget covers 
funding of planning, design, and construction to continue ongoing 
projects that provide solutions to flood control and emergency 
streambank erosion problems under the Section 205 and Section 14 
programs, navigation problems under the Section 107 program, shoreline 
damage problems under the Section 103 and Section 111 programs, 
clearing and snagging problems under the Section 208 program, and 
environmental problems under Sections 204/207/933. Under our Continuing 
Authorities Program, projects are accomplished expeditiously and result 
in a high level of customer satisfaction. Continuing Authorities 
projects continue to be an important segment of our total water 
resources infrastructure investment program. No funds are requested for 
new starts.
Inland Waterways Users Board
    Funds are budgeted for fiscal year 2004 in the amount of $230,000 
for the Inland Waterways Users Board activity. Section 302 of WRDA 86 
created this 11-member advisory board of inland waterway users and 
shippers to make recommendations to the Secretary of the Army and the 
Congress regarding construction and rehabilitation priorities and 
spending levels for commercial waterway improvements. The Board members 
were initially appointed in late Spring of 1987. The Board has held 43 
meetings since it was created. The Board's recommendations are a 
valuable addition to our program and budget development process. We 
appreciate the contribution of the Board's chairman and its members to 
the efficient management and modernization of our inland waterways. We 
believe the Board provides an important advisory function to both the 
Secretary of the Army and the Congress.
Shoreline Erosion Control Development and Demonstration Program
    The fiscal year 2004 budget includes $6,000,000 to plan, design, 
construct, and monitor projects to demonstrate and evaluate new 
shoreline protection technologies. To date, over $10,000,000 has been 
used to develop program goals, establish criteria for selecting 
technologies and techniques to be tested, select sites and initiate 
construction of the first demonstration site at Cape May Point, New 
Jersey. The techniques developed under this program are expected to 
yield up to $150,000,000 of savings in future budgets by reducing 
erosion and/or lengthening the time between renourishments.
Dam Safety and Seepage/Stability Correction Program
    Funds are budgeted for fiscal year 2004 in the amount of $8 million 
to continue ongoing Dam Safety and Seepage/Stability projects that were 
approved prior to fiscal year 2004. This is an increase of $3 million 
from the fiscal year 2003 budget. The Dam Safety and Seepage/Stability 
Correction Program provides for modification of completed Corps of 
Engineers dam projects. While no Corps dams are in imminent danger of 
failure, some may have a higher dam-safety risk than originally 
anticipated based on new data or the likelihood of extremely large 
floods and seismic events. Seepage problems at Corps' dams are usually 
related to increased reservoir levels above the previous pool of record 
at a project. Static instability generally involves movement that 
starts at a slow rate and could result in massive displacement of large 
volumes of material if not corrected. Dam modification work is 
proceeding under existing authorities on projects where cost-effective 
risk reduction measures have been identified and approved.
Aquatic Plant Control Program
    The fiscal year 2004 budget includes funds in the amount of $3 
million for the Aquatic Plant Control Program authorized by Section 104 
of the Rivers and Harbors Act of 1958, as amended. This is the same as 
the fiscal year 2003 budget. These funds will be used to continue 
research efforts for aquatic plant control technologies to support 
operation and maintenance of Corps Water Resources projects. Primary 
research efforts are focused on the non-indigenous submersed species, 
hydrilla and Eurasian watermilfoil, with emphasis on development of 
biological control agents.
Dredged Material Disposal Facilities Program
    Funds in the amount of $7 million are budgeted for fiscal year 2004 
for ongoing projects in the Dredged Material Disposal Facilities 
Program. This is a decrease of $2 million from the fiscal year 2003 
budget. Section 101 of WRDA 86, as amended by Section 201 of WRDA 96, 
established consistent cost sharing for construction of dredged 
material disposal facilities associated with Federal navigation 
projects, including disposal facilities for Federal project 
maintenance. These funds will be used for the Federal share of 
construction of applicable dredged material disposal facilities 
required for maintenance of existing projects or fee payments to 
private entities for the use of privately owned dredged material 
disposal facilities if such a facility is the least cost alternative to 
dispose of dredged material. All Federal costs for dredged material 
disposal facilities associated with project maintenance will be 
financed from the Harbor Maintenance Trust Fund.
Employees' Compensation
    The fiscal year 2004 budget includes $19.13 million for transfer to 
the Department of Labor to repay the Employees' Compensation Fund for 
costs charged during the period July 1, 2000 through June 30, 2002 and 
for investigation of fraudulent claims for workers compensation 
benefits. This is a decrease from the fiscal year 2003 budget. The 
transfer to the Department of Labor is for payment of benefits and 
claims due to injury or death of persons under the jurisdiction of the 
Corps of Engineers civil functions.
     activities under the operation and maintenance, general (o&m) 
                             appropriation
Aquatic Nuisance Control Research (Formerly Zebra Mussel Research 
        Program)
    The Corps Fiscal Year 2004 Operation and Maintenance, General, 
appropriation budget includes $725,000 for the Aquatic Nuisance Control 
Research Program which is a redefinition of the previously funded Zebra 
Mussel Research Program (ZMRP). The program now addresses all invasive 
species except for aquatic plants. Invasive species cost the public 
over $137 billion annually. Authorized by the Nonindigenous Aquatic 
Nuisance Prevention and Control Act of 1990 (Public Law 101-646) this 
effort includes the only Federally funded R&D program directed at 
control of zebra mussels and their effects on public facilities. The 
development of strategies to apply control methods involves engineering 
design, operations, and maintenance of facilities and structures. 
Control strategies are being developed for (a) navigation structures; 
(b) hydropower and other utilities; (c) vessels and dredges; and (d) 
water treatment, irrigation, and other control structures.
    Proposed activities for fiscal year 2004 include expansion of as 
many as possible of the technologies developed under the ZMRP to 
address all invasive species. This will include continued research 
efforts to examine a number of different technologies other than pulse 
power to eradicate zebra mussels from structures and research on new 
coatings to evaluate their ability to stop the settlement of zebra 
mussels and other invasive species on various surfaces. Research 
efforts will examine how current ballast water regulations can be 
modified to reduce the potential for introductions of aquatic nuisance 
species and the Aquatic Nuisance Species Information System will be 
expanded into a WEB-based system, and invasive species engineering 
guides will be incorporated into the system. The mechanisms that allow 
invasive species to disperse through the Nation's waterways will 
continue to be examined or determined. Investigations will also be 
conducted to identify proactive procedures that will assist in limiting 
new distributions. Scientists will visit projects where mosquitoes are 
a problem to develop abatement programs and meet with local community 
representatives to discus control technologies.
    In cooperation with State and Federal agencies, scientists will 
investigate methods to control invasion and of snakehead fish in Corps 
Reservoirs and eradication methods once they are there. In addition, a 
comprehensive database will be developed on zebra mussel densities, 
molluscivore (fish that consume mussels) densities and growth, water 
quality, and other pertinent habitat attributes. Information from 
database will be used to construct models to predict the effects of 
molluscivores on zebra mussel infestations and subsequent changes in 
habitat quality. These models will quantify the beneficial aspects of 
predation on zebra mussels, assist in impact prediction, and aid in 
allocation of control efforts, and the formulation of control 
strategies.
Automated Budget System
    The Civil Works Operation and Maintenance Automated Budget System 
(ABS), is an automated system used to enable Districts and Divisions to 
prepare, review and submit their Operations And Maintenance programs 
consistent with policy guidelines and priorities. The program is 
continuously evaluated for effectiveness to identify areas that require 
change in order to meet the needs of the overall Civil Works Operations 
and Maintenance program. It provides extraction of standard reports to 
support Division and Headquarters review and development of the Civil 
Works O&M program recommendation. ABS reports provide cost breakouts by 
business process, benefit codes, States, field units, navigation fee 
codes, joint cost percentages and numerous other groupings to support 
analysis, distribution, updates and performance monitoring. This system 
is available to all managers at all Corps of Engineer levels who have 
Operation and Maintenance management responsibilities. The fiscal year 
2004 Budget includes $285,000 for this item.
Coastal Inlets Research Program
    The fiscal year 2004 budget includes $2.75 million to fund the 
Coastal Inlets Research Program to increase Corps capabilities to cost-
effectively design and maintain the over 150 inlet projects, which 
comprise the bulk of coastal O&M expenditures. Because of their complex 
nature, the behavior of inlets is poorly understood. This has resulted 
in the Corps spending a large portion of its O&M allocations to 
maintain inlet projects. The Coastal Inlets Research Program studies 
functional aspects of inlets such as their short- and long-term 
behavior and their response to waves, tides, currents, and engineering 
modifications, given their regional geologic and oceanographic setting. 
As inlet behavior and the consequences of navigation projects are 
becoming better understood, sophisticated tools for management of 
inlets for navigation projects, such as models and empirical 
relationships, are becoming available. These new tools are leading to 
more efficient, cost-effective designs that have been shown to reduce 
O&M requirements and, consequently, costs.
    With our fiscal year 2004 allocations for this program we will 
begin a major R&D effort to implement state-of-the art predictive 
formulas for sediment transport under waves and currents based on 
models developed previously in this program; collect data and validate 
the Inlet Modeling System, scour model, and morphology change models at 
deep-draft channels and collect data and model channel and bypassing 
processes at sites of opportunity in collaboration with Corps 
Districts; perform physical and numerical modeling studies on 
innovative jetty and channel-control designs to reduce dredging costs, 
improve bypassing, and improve navigation reliability at inlet entrance 
channels; begin creation of web-based Navigation Channel Resource 
Center to house data on inlet channel surveys, performance, and 
dredging which will serve as a resource for all analytical work in the 
Coastal Inlets Research Program and provide the Corps with a central 
location for channel data; continue adding to the inlets database 
encompassing all Federally maintained and major non-Federal inlets; 
extend the long-term morphology modeling system newly developed in the 
Coastal Inlets Research Program to include the adjacent beaches, 
navigation channel, and flood shoal together with the ebb shoal and 
validate and release the model to the public; acquire field data at 
inlet jetties to understand the beach and jetty interaction through rip 
currents, developing a quantitative predictive method for rip current 
sediment transport and; develop educational materials about coastal 
processes, inlet processes, and dredging for the public and schools at 
all levels.
Cultural Resources (NAGPRA/Curation)
    The fiscal year 2004 budget includes $1.545 million to fund the 
Cultural Resources (NAGPRA/Curation) Program. Enacted on 16 November 
1990, the Native American Graves Protection and Repatriation Act 
(NAGPRA) is a complex act that addresses the recovery, treatment, and 
repatriation of Native American and Native Hawaiian cultural items by 
Federal agencies and museums. As defined by the Act, cultural items are 
human remains, associated funerary objects, unassociated funerary 
objects, sacred objects, and objects of cultural patrimony. In fiscal 
year 1994, the Corps of Engineers began the process of inventorying 
human remains and associated funerary objects and completing summaries 
as mandated by the legislation. In addition, the Corps is responsible 
for curation of cultural resource materials collected from its flood 
control projects. These collections are extensive and are located at a 
variety of curation facilities across the Nation. The costs of the 
program are to accomplish NAGPRA work and to fund centralized curation 
support to the districts. Curation of these materials, which have the 
largest volume among all Federal agencies responsible for this 
activity, is required by a number of public laws.
    In fiscal year 2004 the Corps will continue the process of 
inventorying Native American and Native Hawaiian human remains and 
associated funerary objects and complete summaries of unassociated 
funerary objects, sacred objects, and objects of cultural patrimony as 
mandated by the legislation. Information will be made available to 
interested individuals and groups through notices in the Federal 
Register. Districts will continue to be engaged in formal consultation 
with tribes and organizations for the legislated purpose of 
repatriating cultural objects for which there are legitimate claims. We 
will continue in the pivotal role of assisting in the development and 
implementation of an agency-wide, long-term plan for the curation of 
Corps archeological collections (heritage assets). We will continue to 
fulfill our charter activities to include an inventory of all DOD and 
Corps heritage assets and participate in the development of standards 
and guidelines for archeological collection rehabilitation. Work will 
continue on the development and implementation of final guidelines and 
procedures for field collection of archeological materials and the 
long-term treatment of those collections. Finally, leadership will be 
provided in the development of a training curriculum on the treatment 
of heritage assets and working in consultation with all stakeholders, 
take initial steps to make this training available to appropriate 
managers and decision makers.
Dredge Wheeler Ready Reserve
    The fiscal year 2004 budget includes $8 million to cover the cost 
of keeping the dredge WHEELER fully operational in fiscal year 2003 
while in Ready Reserve status in accordance with Section 237 of the 
Water Resources Development Act of 1996 (WRDA 96). Section 237 contains 
a provision requiring the Corps hopper dredge to be placed in a ready 
reserve status. The section requires that no individual project funds 
may be used to fund the dredge in its ready reserve status unless the 
dredge is specifically used in conjunction with a project. In fiscal 
year 1998, the WHEELER was placed in a ready reserve status as required 
by WRDA 96. The hopper dredge WHEELER, in a ready reserve status, is 
required to be able to perform emergency dredging work, but may not be 
assigned any scheduled hopper dredging work. The dredge may be placed 
in an active status in order to perform work that private industry 
fails to submit a responsive or responsible bid for advertised 
dredging, or where industry has failed to perform under an existing 
contract. In light of this criteria, the WHEELER is being kept at the 
dock, with sufficient crew to respond to any unforeseen requirement 
within 72 hours, and be able to work for approximately 3 weeks. The 
dredge is being maintained in a fully operational state and 
periodically will perform routine dredging operations to test equipment 
and keep the crew trained and prepared. In all but one year since put 
into ready reserve, the WHEELER was called out of ready reserve status 
to perform urgent dredging to assist industry dredges in restoring 
navigation channels and waterways.
Dredging Data and Lock Performance Monitoring System
    The Dredging Data and Lock Performance Monitoring System budget of 
$1.18 million supports a continuing nationwide collection and analysis 
program of dredging data essential for the Corps efficient and 
effective management of the Nation's deep and shallow draft navigation 
projects. These efforts are necessary to provide data for efficient 
management of Congressionally authorized navigation projects, as well 
as to respond to specific public laws, including Public Law 96-269 
(Minimum Dredge Fleet) and Public Law 100-656 (Small Business Set-
Aside).
    Data include dredging costs and quantities, equipment used, and 
disposal site documentation. This data facilitates nationwide and 
regional analysis and management for Corps performed and contracted 
dredging for both channel deepening and maintenance categories of work. 
The program also supports assessments on the technological changes of 
vessels within the world fleet, which is necessary for estimating the 
Nation's future maintenance dredging requirements. Up-to-date 
information on world fleets, commodity flows, vessel routing through 
Corps channels and assessment of underkeel clearances all contribute to 
the identification of U.S. channels with the greatest safety and 
piloting problems. The lock monitoring provides managers at 230 lock 
sites and their regional and national offices with nationally 
consistent operational and management data. Collectively, these data 
systems support continuing evaluation of local conditions and 
performance measures throughout the navigation system and, in-turn, 
facilitate nationwide control and critical management decisions. These 
data are critical for effectively monitoring and executing the overall 
navigation program.
Dredging Operations and Environmental Research Program (DOER)
    The fiscal year 2004 budget includes $6.755 million for the 
Dredging Operations and Environmental Research Program (DOER). The DOER 
program is an extremely important effort that combines engineering, 
operational and environmental components of waterway management to 
address issues impacting our ability to maintain a safe, reliable, 
environmentally sustainable, and economically efficient navigation 
system. The DOER Program is an integral and highly beneficial component 
of the Corps navigation dredging and environmental protection missions. 
Dredging and disposal must be accomplished within a climate of 
increased dredging workload, fewer placement sites, environmental 
constraints, and decreasing fiscal and manpower resources. Balancing 
environmental protection with critical economic needs while 
accomplishing dredging activities is a major challenge. Major features 
of DOER include, innovative technologies research, environmental 
resource protection, dredged material management, and (4) risk 
research.
    As part of these features in fiscal year 2004, the DOER program 
will: (1) Transfer technology to a wide body of stakeholders that 
addresses operational, economic, and environmental components of the 
Corps dredging program in full coordination and cooperation with other 
appropriate agencies and offices such as: Environmental Protection 
Agency, National Marine Fisheries Service, U.S. Fish and Wildlife 
Service, American Association of Port Authorities (AAPA) and State 
natural resource managers. Aggressive technology transfer through 
multiple media and rapid technology application ensures that research 
products are integrated into decision making at Corps projects and made 
available to port authorities and other navigation project 
stakeholders.; (2) Identify, evaluate and develop innovative tools, 
databases and software, equipment, and technology to improve the 
design, operation, and management of Corps maintained navigation 
projects. It will address problematic environmental resource issues, 
such as environmental windows or threatened and endangered species, 
using a combination of innovative engineering and scientific 
approaches; (3) Develop dredged material handling, transport, and 
placement options which are operationally efficient, environmentally 
sound and cost effective and; (4) Apply a comparative risk-based 
framework in the assessment and management of contaminated dredged 
material and to develop logical decision support tools that quantify 
uncertainty and facilitate efficient decision making.
Dredging Operations Technical Support (DOTS) Program
    The fiscal year 2004 budget includes $1.545 million for 
continuation of the Dredging Operations Technical Support (DOTS) 
Program. The DOTS program fosters the one-door-to-the-Corps concept 
through providing comprehensive and interdisciplinary technology 
transfer, technology application, and necessary engineering, 
operational and environmental training of all stakeholders for all 
Corps navigation dredging projects. DOTS houses the Corps' technology 
and information database and is managed from a centralized program to 
maximize cost effectiveness and implement National policies, laws, and 
complex technical requirements on a consistent basis. The DOTS is fully 
accessible through the Internet and has received thousands of visits 
from navigation stakeholders. The DOTS Program is a storehouse focusing 
on application of state-of-the-art technology and research results to 
field problems. Emerging scientific approaches sometimes cause 
uncertainty in administration of the Corps navigation dredging program. 
As such, DOTS provides a consistent technology base and ready response, 
and training on technical issues through a readily accessible 
technology transfer capability and generic technology application to 
other projects with similar problems. Short-term work efforts to solve 
generic Corps-wide technical problems for maintaining navigable 
waterways are major features of the DOTS Program. Technology transfer 
of new and emerging techniques for application at Corps and stakeholder 
navigation maintenance projects is an important DOTS activity. In 
response to new research results and continuing staff reductions the 
DOTS program will continue to expand to provide technology transfer to 
all O&M navigation projects and be fully responsive to stakeholder 
needs.
    Special emphasis is placed on transfer of technology developed by 
the Corps and others to include proven international technology that 
deal with maintenance and management of navigation structures and 
navigable waterways. Typical technology transfer and training includes 
management of contaminated dredged material, application of innovative 
risk-based technologies to contaminated dredged material, maintenance 
of coastal inlets and adjacent shorelines, shoreline stabilization and 
river training activities, assessment and management protocols for 
beneficial uses of dredged material, channel realignments, protection 
of endangered species, equipment selection, rational application of 
dredging windows, lock and dam maintenance needs, channel and harbor 
maintenance activities and ship simulation activities.
    A key feature of the program includes effective annual face-to-face 
and internet on-line training of Corps staff, navigation stakeholders, 
and others who have regulatory authority over Corps navigation 
maintenance activities on the latest environmental and engineering 
techniques associated with maintaining navigable waterways. The program 
also supports joint Corps and United States Environmental Protection 
Agency activities dealing with environmental aspects of the national 
navigation program.
Earthquake Hazards Reduction Program for Buildings and Lifelines
    The Earthquake Hazards Reduction Program is included in the fiscal 
year 2004 budget in the amount of $300,000 to respond to the 
requirements of Public Law 101-614, National Earthquake Hazards 
Reduction Program (NEHRP) and Executive Order (EO) 12941, Seismic 
Safety of Existing Federal Buildings. The objective of Public Law 101-
614 is to establish and initiate for buildings and lifelines a 
systematic approach to reducing loss of life, injuries, and economic 
costs resulting from earthquakes in the United States. The EO directs 
all Federal departments and agencies to develop an inventory of their 
owned and leased buildings and an estimate of the cost of mitigating 
unacceptable seismic risks in their buildings. Lifelines are defined as 
public works and utility systems.
    We are legally responsible to develop a plan to mitigate these 
vulnerabilities. In addition, FEMA is pursuing the possibility of 
requiring agencies to develop mitigation plans for their deficient 
buildings. The funds requested will be used to help finalize the 
details of the Corps mitigation plan and provide the tools for 
implementation of the program, provide assistance to districts in the 
development of mitigation concepts and designs, provide support to 
Corps Headquarters in oversight and management of the mitigation 
program, provide technical support to Corps HQ, maintain technical 
seismic expertise, develop guidance for additional lifeline systems not 
previously covered in commercially available standards or existing 
Corps guidance, develop guidance for operations personnel, develop a 
mitigation plan for the Corps lifelines, and update and maintain the 
database. The development and updating of guidance for the seismic 
evaluation and risk mitigation of lifeline facilities will continue as 
well.
Facility Protection
    On 11 September 2001, our Nation suffered a loss of unimaginable 
proportions, with terror attacks in New York, Washington and the skies 
over rural Pennsylvania. These events have emphasized the resolve of 
terrorists to weaken our Nation by inflicting massive casualties and 
destroying vital elements of our infrastructure. The scope of Corps of 
Engineers water resources assets considered highly vulnerable to future 
terrorist attacks include 75 hydroelectric power projects, 383 major 
lakes and reservoirs with 376 million annual visitors, 8,500 miles of 
levees, 276 locks, 4,340 recreation areas, 11.7 million acres of public 
land, 25,000 miles of commercially navigational channels, 926 shallow 
and deep draft harbors, and $1.2 billion in research and development 
facilities.
    In response to the attacks of September 11, 2001, the Corps 
compiled a list of critical public assets in accordance with 
Presidential Decision Directive number 63. In 2001, the Corps initiated 
vulnerability assessments (RAM-D) of critical water resources 
infrastructure to determine vulnerability to terrorist attacks. A clear 
need exists for improved security and protection at vital Corps water 
resources and administrative facilities supporting our missions. The 
protection of Corps critical infrastructures incorporates the elements 
of detection, protection, and response. The Corps is addressing these 
elements by increasing surveillance and awareness and initiating crime 
watch programs, continuing implementation of protection measures and 
coordinating the response by local law enforcement support and local 
guard forces. The assessments of Corps facilities have identified key 
research areas, including waterborne threats, rapid recovery and 
emergency response, vulnerability and damage assessment tools, 
structural hardening.
    The Corps will complete implementation of facility protection 
standards at Mississippi River and Tributaries facilities, and will 
continue Force Protection Standards for Corps Offices, interfacing with 
other Federal, State and local government offices and private industry, 
and will continue ongoing research efforts funded in fiscal year 2004.
    The fiscal year 2004 budget includes $13 million to continue the 
Corps of Engineers Civil Works Facility Protection effort, including 
continuation of existing security levels and maintaining guard 
positions and electronic monitoring systems at critical facilities.
Great Lakes Sediment Transport Modeling
    The Great Lakes Sediment Transport Modeling Program is included in 
the fiscal year 2004 budget in the amount of $1.0 million. Section 
516(e) of the Water Resources Development Act of 1996 authorizes 
development of sediment transport models for tributaries to the Great 
Lakes that discharge to Federal navigation channels or Areas of Concern 
(AOCs). The Great Lakes Sediment Transport Modeling program is intended 
to use sediment transport models to target areas for preventive 
measures to control sediment movement to navigation projects and AOCs. 
These models are being developed to assist State and local resource 
agencies evaluating alternatives for soil conservation and nonpoint 
source pollution prevention in the tributary watersheds. The ultimate 
goal is to support State and local measures that will reduce the 
loading of sediments and pollutants to navigation channels and AOCs, 
and thereby reduce the costs for navigation maintenance and sediment 
remediation.
    Fiscal year 2004 funds will be used to complete development of 
models at four tributaries (Genesee River, New York; Black River, Ohio; 
St. Joseph River, Michigan; and, Burns Waterway, Indiana), initiate 
model development at four tributaries (St. Louis River, Minnesota/
Wisconsin; Oswego River, New York; Cuyahoga River, Ohio, and; River 
Raisin, Michigan), and conduct scoping and coordination for future 
model development at the next set of priority tributaries (Eighteen 
Mile Creek, New York; East River, Wisconsin; Grand River, Michigan; 
Sandusky River, Ohio). State and local partners will use models 
developed under this program to reduce loadings of sediments and 
contaminants to Great Lakes tributaries, thereby reducing future 
dredging requirements at Federal navigation channels and promoting the 
restoration of beneficial uses at Great Lakes Areas of Concern.
Harbor Maintenance Fee Data Collection
    Public Law 103-182 authorizes up to $5 million to be used annually 
for the administration of the Harbor Maintenance Trust Fund. The Corps 
fiscal year 2004 budget includes $675,000 for this activity. The Corps 
is required to collect data on domestic and foreign shippers of 
waterborne commerce subject to the Harbor Maintenance Tax (HMT) and 
provide it to Customs for enforcement. Analysis of HMT revenues and 
transfers is required to validate the adequacy of the HMTF in light of 
the uncertainty over the legal and international challenges to the HMT, 
and to document the operation of the trust fund in the Annual Report to 
Congress. Analysis of waterborne commerce shipments and vessel movement 
data is also needed to respond to legal questions to the HMT; to 
analyze alternative funding options; and to assess the economic and 
competitiveness impacts of other potential funding sources. Therefore 
the Corps requires a portion of the administrative funding. The recent 
transfer of the Foreign Waterborne Transportation Statistics Program to 
the Corps requires the data processing system to be expanded to include 
validation of users engaged in foreign trade, in addition to domestic 
users. The budgeted amount will be needed in fiscal year 2004 to 
operate and enhance the system to analyze, enforce, collect and 
validate harbor usage information required by the Customs Service for 
auditing HMT collections.
Inland Waterway Navigation Charts
    The fiscal year 2004 budget includes $4,120,000 for Inland Waterway 
Navigation Charts. In 1994, a barge on the inland water struck a bridge 
pier in poor visibility caused an AMTRAK derailment accident near 
Mobile, Alabama. Consequently, the National Transportation Safety Board 
recommended that the Chief of Engineers begin to promote use of 
electronic charts for safety of navigation on inland waterways. The 
first part of that recommendation was to extend the coastal 
Differential Global Positioning System (DGPS) into the inland 
waterways. That work is now about 90 percent complete. The second part 
is this effort to provide accurate and current electronic navigation 
chart (ENC) data necessary to allow the commercial system to be used to 
improve safety and efficiency. The American Waterway Operators have 
also stated a need for consistent Corps channel data for inland 
waterway electronic charts, and the recent Marine Transportation System 
study recommended that electronic chart coverage be extended into 
inland waterways and the addition of hydrographic survey information. 
National Oceanographic Atmospheric Administration (NOAA) is also 
developing ENC products for their coastal charts, which require use of 
source data--including Corps channel information. The Water Resources 
Development Act, 2000, Section 558, requires Corps of Engineers 
districts to provide digital hydrographic survey data to the NOAA in an 
agreed upon format not later than 60 days after completion of a survey. 
The U.S. Coast Guard also has plans for implementation of vessel 
traffic systems (VTS) in New Orleans and other areas and merging of its 
Aids to Navigation into the ENC datasets provided by other Federal 
agencies such as the Corps and NOAA is necessary. VTS data could be 
extremely useful to vessels using the waterway, although an electronic 
chart is needed for display of the information.
    This effort provides ENC for all inland waterways and other Federal 
navigation channels maintained by the Corps of Engineers to be used by 
commercial Electronic Chart Systems (ECS), which, when combined with 
the existing DGPS, will improve the safety and efficiency of marine 
navigation in both inland and coastal waterways of the United States. 
On inland waterways, the Corps will collect more accurate survey and 
mapping data than is currently on its paper charts. Accuracies of about 
2 meters are necessary to match the positional accuracy of the DGPS 
signal, which when combined in the commercial ECS will greatly improve 
the safety and efficiency of navigation. This will allow safe 
navigation through bridge openings during fog and other bad weather 
conditions as well as during heavy traffic situations.
    As part of this program, the Corps coordinated standards and 
requirements with the National Oceanic and Atmospheric Administration 
(NOAA), U.S. Coast Guard, American Waterway Operators (AWO), the Inland 
Waterways User Board (IWUB); developed initial IENCs for most of the 
Mississippi River, and all of the Ohio, Black Warrior, Tombigbee, and 
Red Rivers; developed the plans, procedures and guidelines necessary 
for standardization of inland waterway chart data products; developed 
the internet web site for data dissemination; began new highly accurate 
baseline surveys on the inland waterways of features needed in the IENC 
data; and began coastal product development in two districts.
    The Corps will continue coordination of standards and requirements 
with the National Oceanic and Atmospheric Administration (NOAA), U.S. 
Coast Guard, American Waterway Operators (AWO), and the Inland 
Waterways Users Board (IWUB); complete IENCs for most of the 
Mississippi River and all of the Ohio, Black Warrior, Tombigbee, and 
Red Rivers; begin update program for completed IENCs; complete coastal 
product development in two districts and begin development in new 
districts; and continue baseline surveys of waterway features.
Long Term Option Assessement for Low Use Navigation
    Operation and Maintenance funds for navigation are increasingly 
constrained, necessitating project prioritization and the consideration 
of long-term management strategies. The Budget continues to give 
priority to maintaining inland waterway segments and coastal harbors 
that have utilization, while also funding the operation and maintenance 
of shallow draft harbors that support commercial or subsistence fishing 
or Federal Government activities. This study will identify data needs 
and methodologies to assess lower use inland waterways and harbors, 
examine the level of continued Federal interest in these projects, and 
provide an assessment of possible long-term management options for 
projects with diminishing NED benefits. Such options will include 
transfer to another public or private entity, privatization, 
divestiture, and alternate O&M funding mechanisms.
Monitoring of Completed Navigation Projects
    The fiscal year 2004 budget includes $1.750 million for the 
Monitoring of Completed Navigation Projects (MCNP). This continuing 
program monitors project performance, evaluates the performance against 
pre-construction projections, and transfers the lessons learned into 
guidance for Districts. Sediment transport patterns, water depths, 
currents, waves, flushing characteristics, tidal stages, and other 
hydrodynamic phenomena together with associated environmental impacts 
are changed by the construction of navigation projects. Information 
gained from monitoring navigation projects, including the magnitude and 
rate of these changes, is required to verify design expectations, 
determine benefits, and evaluate operational and maintenance 
efficiencies. Information collected from monitored navigation projects 
will be used by the local Districts to improve project performance. 
Additionally, this information will be collected and analyzed on a 
national basis to document successful designs, disseminate lessons 
learned on projects with problems, and provide upgraded field guidance 
that will help reduce life-cycle costs on a national scale.
National Dam Safety Program (NDSP)
    The National Dam Safety Program Act (Public Law 92-367 as amended) 
designates FEMA as lead agency in all efforts to enhance national dam 
safety. The National Dam Safety Program is coordinated through the 
Interagency Committee of Dam Safety (ICODS). The Chief, Engineering 
Division, Directorate of Civil Works, represents the Department of 
Defense as a member of ICODS. The Corps and FEMA signed a Memorandum of 
Understanding for the purpose of establishing responsibilities for 
management and administration assistance in the implementation of the 
National Dam Safety Program. FEMA acting through ICODS will provide 
support in development of Federal guidelines for dam safety, promotion 
of public awareness programs, publications, training materials, the 
National Performance of Dams Program, and workshops. The budget 
includes $45,000 to continue this participation in fiscal year 2004.
National Dam Security Program
    The budget includes $30,000 for the National Dam Security program 
in fiscal year 2004. The Interagency Committee on Dam Safety (ICODS) 
has recognized terrorism as one of the major threats to dams in the 
United States. Of all the agency members of ICODS, the Department of 
Defense acting through the Corps has the most unique and in depth 
knowledge in the area of antiterrorism program development and 
execution. This program uses the Army's experience in antiterrorism 
planning and building design as the basis for developing a program for 
safeguarding Corps dams and for export to the other Federal agencies 
through ICODS. Training under this program is designed for the dam 
operator and field manager in order to improve their awareness of the 
potential threat and to establish lines of communications to minimize 
damage if and when a threat is received. The program also provides for 
the exchange of information on threats received and the establishment 
of a database to review trends in the pattern of threats. The Corps and 
other Federal agencies established a task group to study the extent of 
the problem of internal terrorism against dams and other natural 
resource facilities and to determine the proper level of security 
awareness required for these facilities.
National Emergency Preparedness Program (NEPP)
    The fiscal year 2004 budget of $6 million will enable the Corps of 
Engineers to be prepared to accomplish its continuity of operations and 
continuity of government responsibilities during national/regional 
crises. This entails support of civil government through coordinated 
execution of Federal agency plans and the planning/conducting of 
exercises to test readiness to provide such support. This includes 
responsibility for development of comprehensive national level 
preparedness plans and guidance for response to all regional/national 
emergencies, whether caused by natural phenomena or acts of man, plans 
for response(s) to acts of terrorism, and the local preparedness 
necessary to support Corps continuity of operations. The Corps provides 
engineering and construction support to State and local governments in 
response to catastrophic natural/technological disasters. Rapid 
response to disasters of a regional/national magnitude requires that 
extensive pre-emergency planning and preparedness activities be 
conducted to assure the availability of a work force capable of 
shifting from routine missions to crisis operations and the 
organizational command and control structure(s) necessary to provide a 
coordinated and comprehensive response in the critical early stages of 
a catastrophic disaster.
    The fiscal year 2004 program will provide for continuing the 
implementation of the National Emergency Preparedness Program. The 
fiscal year 2004 program will continue the process of catastrophic 
disaster planning and exercising to enable the Corps to rapidly respond 
to a broad spectrum of emergencies, with emphasis on natural disaster 
and terrorists events that have regional and national implications. An 
effort will be made to satisfy increasing demands on the program to 
support multi-agency (Federal, State, and local government) requests to 
exercise plans focusing on regional catastrophic natural and man made 
disasters. Increasingly, Federal, State and local agencies are looking 
to the Corps to take the lead in this area.
National Lewis and Clark Commemoration Coordinator
    With a fiscal year 2004 Budget of $310,000, we plan to continue 
coordination of all Corps of Engineer activities relating to Lewis and 
Clark Commemoration. The bicentennial commemoration of the Lewis and 
Clark Expedition will begin in 2003 and will continue through 2006. A 
National Bicentennial Council has been established, and Federal, State, 
Tribal, and local governmental entities are planning the roles they 
will play in the commemoration. By virtue of its role as administrator 
of large stretches of public land along the trail route and of the Army 
heritage of exploring and mapping of the western United States, the 
Corps will play a significant leadership role in the observance of the 
Bicentennial. The nature of this event will involve large numbers of 
the public traveling through numerous Corps local jurisdictions. The 
Lewis and Clark Coordinator is responsible for ensuring consistent 
agency wide information on safety, traversing navigation structures 
(locks), historic facts, and the geographic location of the 
Expedition's route. The Coordinator is also responsible for a 
consistent agency position in coordination activities with the large 
number of States, local communities and tribes planning local events 
either on or in close proximity to Corps projects.
    These funds with provide the means to develop partnerships, 
maintain contacts (BIA and Tribal government designees, State 
Governor's committees, state recreation and tourism departments), 
improve facilities and interpretation and to implement plans for 
Bicentennial activities by coordinating with commercial entities and 
volunteer efforts.
Performance Based Budgeting Support Program (PBBSP)
    The Government Performance and Results Act of 1993 (GPRA) requires 
that the Corps, implement performance based budgeting for the Civil 
Works Operation and Maintenance, General Program. The Performance Based 
Budgeting Support Program (PBBSP) addresses this requirement by seeking 
new methods for linking performance to annual budget requests and for 
analyzing the potential economic impact of budget requests on business 
processes.
    With an fiscal year 2004 budget of $815,000, efforts will center on 
further refinement of corporate performance principles and program and 
project level performance measures that focus on anticipated 
performance and output at different levels of funding, in accordance 
with the revised finance and accounting cost codes that now align with 
the five O&M business processes--navigation, hydropower, flood damage 
reduction, recreation and environmental stewardship. These 
measurements, at different organizational levels, provide the 
analytical basis to make adjustments in priorities both at the program 
and project levels concerning efficiency of facilities or services. 
Comparison of measurements among projects at all levels helps focus 
management attention on corrections of program or project deficiencies.
Protecting, Clearing and Straightening Channels
    Section 3 of the 1945 River and Harbor Act (as amended by Section 
915(g) of the 1986 Water Resources Development Act) provides continuing 
authority for limited emergency clearing of navigation channels not 
specifically authorized by Congress. A limit per project is not 
specified; however, in any given year, a maximum of $1,000,000 may be 
used nationwide. Work pursuant to this authority is undertaken as 
emergency measures to clear or remove unreasonable obstructions to 
navigation in navigable portions of rivers, harbors and other waterways 
of the United States, or tributaries thereof, in order to provide 
existing traffic with immediate and significant benefit. The fiscal 
year 2004 budget of $50,000 is an estimate based on historical 
experience. If actual requirements are more than estimated, funds will 
be reprogrammed to meet demonstrated needs.
Recreation Management Support Program (RMSP)
    The fiscal year 2004 budget for the Recreation Management Support 
Program (RMSP) is $1.545 million. This program supports the Corps 
recreation business program by funding activities of the Recreation 
Leadership Advisory Team (RLAT).
    The RLAT is composed of representatives from the division, district 
and project levels of the Corps natural resources management program. 
It meets on a regular basis and provides input, advice and support to 
the Corps strategic planning activities for the recreation business 
program. The RMSP, under the leadership of the RLAT, serves to identify 
Corps national recreation program priorities and address those 
priorities through valid management studies, management support, and 
information transfer.
    In fiscal year 2004, the RMSP will study the benefits of 
recreation, meeting the outdoor recreation needs of various ethnic 
groups, and customer satisfaction with Corps operated recreation sites 
and facilities. It will track recreation trends and support various 
tools to provide information to local managers to assist in operating 
the recreation program at their projects. Information obtained through 
RMSP and RLAT activities is critical to the Corps recreation business 
program strategic planning.
Regional Sediment Management Demonstration Program
    Authorized by Section 516 of WRDA 96, the Regional Sediment 
Management Demonstration Program (RSM) is included in our fiscal year 
2004 budget amount of $1.545 million. The goal of this program is to 
demonstrate that, by managing our O&M navigation channel maintenance 
dredging, construction of shore protection projects and environmental 
restoration and beneficial uses of dredged material in tandem, we can 
reduce the total costs of all the projects within a given coastal 
system and ultimately increase the economic and environmental benefits 
throughout the Nation's coastal navigation system.
    Our accomplishments to date include completion of a 3-year RSM 
demonstration projects with an estimated cost savings of $9.4 Mill at 
Mobile District. A demonstration at East Pass was completed in fiscal 
year 2002 with collaboration with the United States Air Force. Many 
more demonstration projects are underway. The cooperation among Federal 
agencies and the collaboration among the three levels of government 
have been the greatest accomplishments to date.
Reliability Models Program for Major Rehabilitation
    Our fiscal year 2004 budget includes $675,000 for the Reliability 
Models Program For Major Rehabilitation. The purpose of this program is 
to respond to yearly needs of Districts and Divisions, which are 
preparing Major Rehabilitation reports for the upcoming fiscal year. 
The objective is to provide reliability models for project features or 
components that are being considered for Major Rehabilitation, or to 
provide procedures to consider the impact of various chemical, 
environmental or physical processes in a reliability analysis.
    The fiscal year 2004 funds will be used to prepare reliability 
models and collect data for reliability analyses anticipated to be 
required by several Districts. Reliability models and/or data are 
anticipated to be needed for the following: Completion of a reliability 
model for seepage through embankment dams and levees will continue; 
Completion of a screening level tool for the districts to use to 
prioritize major rehabilitation and dam safety projects; Evaluation of 
data collected on performance of dam gates, to determine performance 
modes and verify load cycles used in reliability analyses, and 
electrical/mechanical systems model for locks and dams. Provide 
reliability analysis procedures for selected hydropower equipment. It 
is also anticipated that two rehabilitation workshops would be 
conducted. The makeup of these units is subject to the needs of the 
respective Districts and Divisions.
    In prior year, reliability models and other analytical tools have 
been provided in support of Major Rehabilitation reports on numerous 
navigation and hydropower projects. In addition, 18 rehabilitation 
workshops have been conducted in the last 10 years to provide 
assistance to the Districts as they prepare their reports. These 
workshops offer guidance in conducting reliability and risk analyses, 
and provide the opportunity for interdisciplinary teams from the 
Districts to discuss their particular project with HQUSACE and other 
Districts personnel.
Removal of Sunken Vessels
    Removal of sunken vessels, or other similar obstructions, is 
governed by Sections 15, 19, and 20 of the River and Harbor Act of 
1899, as amended. Primary responsibility for removal belongs to the 
owner, operator, or lessee. If the obstruction is a hazard to 
navigation and removal is not undertaken promptly and diligently, the 
Corps may obtain a court judgement requiring removal, or remove the 
wreck and seek reimbursement for the full cost of removal and disposal. 
Determinations of hazards to navigation and Federal marking and removal 
actions are coordinated with the Coast Guard in accordance with a 
memorandum of understanding between the two agencies dated 16 October 
1985. Removal procedures are outlined in 33 CFR 245. The fiscal year 
2004 budget includes $500,000 for this program. If removal requirements 
are more than estimated, funds will be reprogrammed to meet actual 
needs.
Water Operations Technical Support (WOTS) Program
    The Corps fiscal year 2004 budget includes $725,000 for the Water 
Operations Technical Support (WOTS) Program. The WOTS Program provides 
effective environmental and water quality engineering technology to 
address a wide range of water resource management problems at Corps 
reservoir and waterway projects, and in the river systems affected by 
project operations nationwide. WOTS provides technical support to the 
Corps' mission related project responsibilities, with special emphasis 
on the transfer of technology. The program ensures that the 
technologies developed by the Corps and other Federal agencies are 
current and readily available to all Corps field offices. The effective 
use of technologies is secured through rapid direct technical 
assistance; field demonstrations; specialty workshops; publication of 
information exchange bulletins, technical notes, executive notes, 
technical reports, miscellaneous papers, instruction reports, videos, 
meetings, seminars; and briefings at field offices.
    Since its inception in fiscal year 1985, WOTS has provided 
environmental and water quality technological solutions to over 1,3000 
problems identified at projects from every Corps District. The program 
annually publishes and distributes numerous copies of manuals, 
bulletins, notes, and reports. WOTS annually conducts specialty 
workshops, training personnel on the latest environmental and water 
quality management techniques. In fiscal year 2003, the WOTS program 
successfully responded to 80 direct technical assistance requests from 
31 Corps Districts, conducted six technology demonstration efforts to 
verify management strategies and techniques, four training workshops on 
environmental and water quality management techniques, and prepared 12 
technical publications for distribution to the field.
Waterborne Commerce Statistics
    The Corps of Engineers serves as the Federal Central Collection 
Agency, and is the sole U.S. Government source, for U.S. domestic and 
foreign waterborne commerce and vessel statistics in conformance with 
the River and Harbor Act of 1922 as amended. Activities supporting this 
national statistics mission include: (a) collecting and reporting of 
water transportation statistical data; (b) automated systems 
development and operation, processing, compiling, and publishing 
statistical data and information on waterborne commerce and vessels 
moving on the internal U.S. waterways, the Great Lakes, and through all 
U.S. ocean channels and ports; and (c) compiling and publishing the 
official U.S. documentation of U.S. vessels engaged in commerce, and 
their principal trades and zones of operation. The data provide 
essential information for navigation project investment analyses, 
including accurate benefit-cost analyses; for annual funding 
prioritization for operation and maintenance of existing projects; for 
computation of performance measures; for input into the U.S. National 
Accounts; and for regulatory and emergency management decisions. The 
budget includes $4.745 million for fiscal year 2004.
Activities Under the Regulatory Program Appropriation
    The fiscal year 2004 budget amount of $144 million is comparable to 
the fiscal year 2003 request, which was also $144 million. With the 
requested funds, the Corps will continue to work toward reducing the 
average review time for standard permits to 120 days. Standard permits 
are the most complex and controversial of the Corps permit actions and 
involve significant aquatic resources and large-scale projects with 
major economic impacts. Standard permits generally involve intense 
coordination efforts between the applicant and other Federal/State 
agencies over difficult issues that may include endangered species, 
historic properties, and water quality issues. While they only account 
for approximately 5 percent of all permit actions, standard permits 
demand a enormous resource commitment. Since fiscal year 2001, the 
average review time for standard permits has increased from 150 days to 
160 days. We are working diligently to reduce processing times on these 
and less complex permit actions to reduce overall processing time. 
Challenges to permit decisions are also increasing, resulting in more 
documentation for the project manager on every permit. The Corps 
administrative appeals program, however, is giving applicants the 
ability to challenge regulatory decisions without resorting to 
litigation.
    Overall, the Corps is continuing to do an impressive job managing 
its permit workload. Out of 82,000 permit actions, including standard 
permits, 88 percent were handled within 60 days in fiscal year 2002. 
This is largely due to continued emphasis and improvements to the 
nationwide permit program. In January 2002, the Corps issued revisions 
to its nationwide permit program. These changes not only increased 
environmental protection for activities authorized through nationwide 
permits, but also streamlined the approval process for some activities. 
Although we are generally maintaining review times for these actions, 
authorization requirements for nationwide permits are becoming more 
complex than in the past and many nationwide permits now may involve 
mitigation. In addition to permit decisions, in fiscal year 2002 the 
Corps made almost 70,000 jurisdictional determinations, many of these 
for single-family homeowners. This was an all time high. Many such 
determinations are not associated with specific permits as the public 
makes requests to learn if they are subject to Federal jurisdiction.
    One area we are working to improve is the inspection of completed 
permit actions and mitigation projects to ensure compliance with permit 
conditions and mitigation requirements. A 2001 report on wetland losses 
by the National Research Council of the National Academy of Sciences 
concluded that the Corps needed to improve its oversight of wetlands 
compensatory mitigation activities.
    In December 2002, the Corps issued a Regulatory Guidance letter 
(RGL) and initiated implementation of a National Wetlands Mitigation 
Action Plan. The RGL and mitigation action plan were developed with the 
Environmental Protection Agency and other Federal partners. The 
mitigation action plan complements the RGL and is intended to be 
complete within three years. It is designed to address outstanding 
concerns and to improve compensatory mitigation associated with wetland 
impacts of projects permitted under the Clean Water Act. The RGL and 
mitigation plan emphasize wetlands functions and a more holistic 
watershed approach in determining impacts and mitigation. This effort 
will involve considerable resources both at headquarters and the 
districts as the Corps and EPA work to complete the plan within three 
years.
    The Regulatory Program is effectively implementing the watershed 
approach to evaluate impacts and ensure effective compensatory 
mitigation. Additional resources will be devoted to studies of 
watersheds and similar sensitive environmental areas. Wherever 
comprehensive reviews of individual watersheds can be undertaken, the 
Corps is better able to manage and predict direct, indirect, and 
cumulative impacts of proposed projects. This leads to better and more 
rapid evaluation of future permit applications that will result in 
expedited permit processing and potential workload reductions.
    As a follow-on to the mitigation plan, the Corps Regulatory Program 
will be instituting a new database system designed to track additional 
permit and mitigation statistics, as well as introduce a system for the 
general public to submit and track permit applications on-line. The 
system will supplement the Corps program to provide more information to 
the public through the Internet regarding the Regulatory Program and 
permit actions. This system has been designed to improve regulatory 
business processes and will be installed in the first district in 
August of 2003.
    In January 2003, the Corps and EPA issued an advance notice of 
proposed rulemaking to develop regulations focusing on isolated waters. 
A 2002 Supreme Court decision (SWANCC) limiting Corps authority in 
intra-State, non-navigable waters created a need to better clarify 
Corps jurisdiction in these waters. Both public and Federal uncertainty 
in wetland policy has resulted in more Corps time being devoted to 
jurisdictional determinations. Development of policy and jurisdiction 
definitions will be a substantial work effort that is expected to carry 
into 2004. It will include public input, data collection, and 
evaluation by Corps districts, especially those with large areas of 
isolated waters.
      activities under the flood control and coastal emergencies 
                             appropriation
    The Corps continues to provide leadership in response to natural 
disasters and, therefore, must maintain a preparedness program that 
meets the needs of the Nation. In order to execute an effective fiscal 
year 2004 continued response-planning program and all-hazards 
preparedness activities in support of the Federal Response Plan, funds 
in the amount of $70 million are requested.
    The Corps responsibility for emergency response requires that its 
engineering, construction, and emergency operations capabilities be 
maintained. When a disaster strikes, people's lives, livelihood and 
property are at stake. Therefore, the level of funding requested is the 
minimum sufficient to support an organization capable of responding to 
all natural disasters: hurricanes, floods, earthquakes, and other 
disasters, such as contaminated public water supplies.
    In addition to the preparedness program, the account funds 
emergency activities in response to natural disasters, as authorized by 
Public Law 84-99. Since we cannot predict the timing and magnitude of 
disasters, emergency transfers may be made from other flood control 
related appropriations amounts and supplemental appropriations will be 
requested when the need arises.
    Activities under this appropriation include: the review and 
updating of response plans to maintain readiness; training to ensure 
our capability to respond under adverse circumstances; procurement and 
pre-positioning of critical equipment and supplies such as sandbags and 
pumps, which are not likely to be available during initial stages of a 
response; periodic exercises to test and evaluate plans, personnel and 
adequacy of training; emergency facilities needed for rapid, effective 
response to disaster areas; inspection of non-Federal flood control 
projects to ensure their viability to provide flood protection; 
emergency operations (flood response and post-flood response); 
emergency repair and restoration of flood control works which are 
threatened, damaged or destroyed by flood; emergency protection of 
existing Federal hurricane and shore protection works; the repair or 
restoration of Federal hurricane or shore protective structures damaged 
or destroyed by wind, wave or water action of other than ordinary 
nature; preventive work performed prior to unusual flooding that poses 
a threat to life or property; providing emergency supplies of clean 
water to any locality confronted with a source of contaminated water 
causing or likely to cause a substantial threat to public health and 
welfare; and provision of water supplies to drought-distressed areas by 
reimbursable well drilling or transportation of water at Federal cost.
    Work continues on comprehensive interagency response planning 
activities. These activities support, under the Stafford Act, the 
Federal Response Plan by providing engineering and construction support 
following major disasters such as flooding in South Central Texas, and 
Virginia/West Virginia; Typhoons Chataan and Pongsona in the Western 
Pacific Ocean; Arizona wildfires; Tropical Storm Isidore, Louisiana; 
and Hurricane Lili, Louisiana. Mission assignments in support of FEMA's 
disaster response and recovery activities have included: emergency 
debris removal; temporary housing; emergency water; restoration of 
infrastructure; temporary power; construction management; and other 
support which uses Corps engineering, contracting, and construction 
expertise.
 activities under the formerly utilized sites remedial action program 
                                (fusrap)
    The Corps has completed remediation at 4 sites, 2 of which were 
transferred to the Department of Energy for long-term stewardship 
activities per the 1999 memorandum of understanding between the two 
agencies, issued 6 records of decision, and completed 6 interim removal 
actions through the end of fiscal year 2002. The Corps expects to issue 
2 records of decision and an Action Memorandum for one new removal 
action in fiscal year 2003, and issue 6 records of decision in fiscal 
year 2004 and complete two removal actions. The FUSRAP budget for 
fiscal year 2004 will fund work at 21 sites in the States of 
Connecticut, Iowa, Maryland, Massachusetts, Missouri, New Jersey, New 
York, Ohio and Pennsylvania.
          activities under the general expenses appropriation
    The General Expenses (GE) appropriation supports the executive 
direction and management (ED&M) functions of the overall Civil Works 
program performed by the Corps Headquarters and the regional Division 
Offices. The primary purpose of the GE account is to provide definitive 
policy guidance, program management, regional and national interface, 
and quality assurance and oversight for all Corps activities toward 
execution of a comprehensive Civil Works program. The fiscal year 2004 
budget for the GE account is $171 million, approximately 3.9 percent of 
the Corps budget. This supports a projected staffing level of 1,095 
full time equivalents (FTE).
    The fiscal year 2004 program of $171 million consists of 
approximately 70 percent labor, 10 percent fixed costs such as rent, 
utilities, communications, and the Plant Replacement and Improvement 
Program (PRIP) paybacks, 6 percent for such discretionary costs, as 
travel, training, supplies, and equipment and 12 percent for other 
Civil Works programmatic type contracts, such as P2/PMBP, Planning 
Capability Improvement Program, Workforce Planning, implementation of 
Competitive Sourcing, CFO audit of civil works financial statements, E-
government initiative for outgrants and leasing requests, USACE 
University, Leadership Development and the CWD-IM Support/Information 
Assurance Program.
    In fiscal year 2002, the Corps completed a 5-year draw down of the 
strength in the GE account. The Corps downsizing efforts reflected 
reductions realized through focusing on appropriate roles and missions, 
elimination of duplication of effort, reducing the number of regional 
division offices from 11 to 8, and continual process reviews to achieve 
additional savings through efficiencies. Overall, this realized a 
savings of 256 FTE or a 19 percent reduction. The staffing for the 
Headquarters will be 420 FTE in fiscal year 2004. This staffing level 
is the same as fiscal year 2003 and makes up less than 2 percent of the 
total Civil Works workforce.
    In fiscal year 2004, the average size of a division office will be 
76 FTE performing ED&M. This is up by one from 75 FTE in fiscal year 
2002 due to the civilianization of the Provost Marshall positions. The 
size of the Pacific Ocean Division office is 20 ED&M FTE based on the 
size of its Civil Works workload. The regional division offices make up 
less than 3 percent of the total Civil Works workforce with a staffing 
level of 553 FTE.
    The GE account also funds staffing at the Humphreys Engineer Center 
Support Activity (HECSA), which provides administrative support to the 
Headquarters and the Humphreys Engineer Center at Ft. Belvoir; the 
Institute for Water Resources, which provides water resource support 
functions, such as conducting and managing national studies, special 
studies, data collection and distribution, and technical support to 
other Corps offices on water resource management matters; the Engineer 
Research and Development Center (ERDC), which provides support to the 
Coastal Engineering Research Board (CERB); and the Corps of Engineers 
Financial Center, which provides centralized finance and accounting 
activities Corps-wide. These activities represent 122 FTE.
                plant placement and improvement program
    The fiscal year 2004 Plant Replacement and Improvement Program 
(PRIP) obligations under the Revolving Fund for items designed to 
improve productivity, increase efficiency, modernize, improve the Corps 
equipment and operational capabilities, and increase safety are 
estimated at $84.1 million. This amount includes estimated fiscal year 
2004 obligations of $33.6 million for 13 new major items and $33.4 
million for 42 continuing major items. Major items are those assets 
costing more than $700,000.
                           support for others
    In fiscal year 2004, the Corps will provide reimbursable 
engineering, environmental remediation, construction management, 
emergency response and other technical support to more than 60 Federal 
agencies. The estimated dollar value of the Corps efforts is $900 
million. The program size depends on several factors: the requesting 
agency's appropriation (which often is not known until after the fiscal 
year has begun), the requesting agency's final decisions on how their 
program will be executed, and the number, nature and magnitude of 
national and international emergencies which the Corps will be 
requested to respond.
                               conclusion
    This concludes the detailed statement of Major General Robert H. 
Griffin on Remaining Items of the fiscal year 2004 Civil Works Budget.

    Senator Cochran. Thank you very much, General Flowers. 
General Griffin, do you have a statement?
    General Griffin. No, sir.
    Senator Cochran. Let me, again, welcome you to the 
committee hearing. We appreciate your attendance.
    And as I say, I am pinch hitting for Senator Domenici, and 
he has not only a full statement on the subject before us 
today, but a number of questions, which I will submit at this 
point and which have to be answered by our witnesses.
    For my part, let me remind you that one of the most 
important projects the Corps has under its jurisdiction is the 
Mississippi River and Tributaries Project. I was reminded of 
that earlier this year--or maybe it was last year. I went to 
Enid Dam in the northern part of our State and spoke at the 
50th anniversary of the construction of one of the large 
projects that is a part of that project.
    Not only is there a levy system that contains the 
Mississippi River that was authorized by Congress as a result 
of the huge devastation caused by the flood of 1927, but a 
number of other spinoff projects all along the trail of the--
the length of the river have been authorized and funded by 
Congress to try to help protect the lives and property of 
people who live in the lower Mississippi River Valley.
    And by and large, it has been an enormously successful 
undertaking although very costly, and it has taken a long time 
to complete the project. As a matter of fact there are still 
some parts of that project that have not yet been completed. 
Some are still in the design phase and planning phase. Others 
are still under construction.
    I would like for you to take a minute for me and let me 
know what your reaction is to the budget submission as it 
relates to the Mississippi River and Tributaries Project, and 
in particular the protection of the main stem levy system. A 
lot of work is being done, I know, along the river.
    I have reviewed some of the projects in my State, Issaquena 
County, and in Sharkey County in particular this year to see 
how work is being done, the environmental sensitivity of some 
of the work, the effort to take advantage of new technologies 
and the like.
    Could you assess for me what your view is of how that work 
is proceeding? And is this budget submission sufficient to see 
that that is continued so that the purpose for the original 
authorization of that project is met?
    General Flowers. Sir, let me begin. The President's fiscal 
year 2004 budget provides $280 million for the MR&T. And that 
money is sufficient to take care of projects on the main stem 
of the Mississippi.
    It is a very tough year with the global war on terrorism, 
and some pretty tough calls have to be made, and I think this 
was probably one of those tough calls. We have--as a former 
president of the Mississippi River Commission, I understand the 
great concern that you have, sir, and we will do everything we 
can to make whatever money is afforded to us as effective as 
possible in protecting the valley. And I do not know if Mr.----
    Mr. Brownlee. Mr. Chairman, I would add that the flood 
protection along the main stem Mississippi River, as I 
understand, is a priority of the administration and has 
received funding in accordance with that priority, so it was 
recognized within the administration as a priority.
    Senator Cochran. Thank you. There have been a number of 
suggestions for reforms in the way projects are planned and the 
construction process as approved. In looking at some of these 
suggestions, it makes me wonder whether these are really 
attempts to delay the planning and construction of projects in 
the Civil Works budget of the Corps of Engineers.
    I think the ultimate result is going to be that those 
projects that are approved and undertaken are going to be a lot 
more costly than they would have been otherwise.
    What are your observations about these proposals? Do you 
have any views about the proposals that we ought to take 
seriously, and those that we might view with some skepticism? 
What is the Corps' position on the reforms that are being 
suggested?
    Mr. Brownlee. Mr. Chairman, if I might just comment for a 
moment on the intent of these measures, and then I will let 
others who know more detail about the actual impact of it raise 
that.
    But the intent, of course, was to focus the funding, which 
is modest, in accordance with the other priorities the Nation 
faces to try to complete work on those projects that are 
ongoing; to reduce the number of projects that are being 
designed so as not to build up a backlog of projects that are 
designed that we cannot afford to proceed with construction; 
and, therefore, to try to get the highest payoff by getting 
projects completed instead of spreading the money over so many 
projects that they all move forward just a little bit. That was 
the intent of the program. And I will defer to General Flowers 
for----
    Senator Cochran. Thank you, sir.
    General Flowers. Sir, the Corps' planning process is one 
that has been recognized by such bodies as the National Academy 
of Sciences as a very sound one. And we have prided ourselves 
on a very--on a process that has always been very open and very 
public.
    Now, having said that, it is also a process that takes a 
lot of time and at times costs a lot of money. And so we are 
looking for ways to transform the Corps to provide better 
service to the Nation. And we have listened to a lot of input 
on ways to do that, and on many we are already taking action. 
We are within the Corps instituting a new project, management 
business process that will go across the organization that will 
hopefully make us more efficient.
    We are becoming a learning organization so that we will 
take advantage of all of our experiences, both good and bad. We 
have established some environmental operating principles which 
speak to sustainable development, to always take those into 
consideration, and communications principles for being a much 
more open and communicative agency.
    And I would say specifically to the Civil Works program, 
that we are working very hard to improve our planning 
capability. And with us in the room today are four members of 
our first new class of planning associates. They have been in 
Washington this week. If you would, just please raise your 
hands.
    They are here--one from each of our Corps divisions, and 
they represent our planning associates program and will, at the 
conclusion of their program, receive Masters' in water 
resources planning. We have been working very hard to 
reestablish and strengthen that capability.
    We are sponsoring the navigation economic modeling 
symposium in April, I believe, to look at the status of the 
science of economics and prediction. We are working with a 
strategic plan, and our Civil Works are way ahead. And that has 
been broadly circulated, talked about.
    We have done some independent project review internally to 
the organization. We have funded it. We have asked firms with 
national recognition to come in and review some of the work 
that we have done as a way of checking our work.
    We have asked for funds in the fiscal year 2004 budget to 
conduct a look-back study to determine, on projects that have 
already been completed, if they are delivering the benefits 
that we had calculated they should derive.
    And we have asked for funding to $3 million in the fiscal 
year 2004 budget to conduct an independent review of some of 
our projects. And so I think we have heard what people have 
said, and we are working to make the organization--or transform 
the organization into an organization that will provide better 
service to the Nation.
    Does that mean we are finished? No. We look forward to 
working with this committee, with the Congress, with the 
stakeholders, and with all who have provided input to do a 
better job.
    Senator Cochran. Thank you, General.
    Thank you, Mr. Secretary.
    Senator Craig.
    Senator Craig. Thank you very much, Mr. Chairman.
    I guess I have one question, General. It is more of an 
elaborate-if-you-would-please. Did I hear you talk about the 
``need for a national water policy'' or ``a national water 
policy''?
    General Flowers. Sir, what we see as--what I have seen as I 
have traveled around the country are growing debates on the 
uses to which we can put a very precious resource. And my 
belief is that in this 21st Century, water will become what to 
the 20th Century oil was.
    And so I think as a way to resolve these competing 
interests, there is a need to dialogue about what will be 
important to the Nation as we move to the future, and I--there 
was a very important event last September. One of the members 
of the committee came and spoke on the need for--and we had a 
very healthy debate on the seminar with interests representing 
the spectrum.
    And I think we concluded that there were probably about 18 
uses that you could put water to that were beneficial, but 
oftentimes in competition with each other. And so there 
probably needs to be a debate leading to hopefully some 
consensus on how we should move forward.
    I do know that in the areas in which we are involved that 
would be very helpful if we could take a more holistic approach 
to water issues. And what I am suggesting, sir, would be a 
watershed wide approach that would, I think, enable the 
Congress and the agencies that provide input to make sounder 
recommendations on how to take care of those precious 
resources.
    Senator Craig. Well, I thank you for that observation. I 
think those of us who grew up in the arid West understand the 
criticality of water.
    We also understand who ought to control it and who ought to 
manage it. West of the Mississippi we have something called the 
Western Water Law that this Congress determined a long time ago 
ought to be the prerogative of the State and State governments 
and State capitals.
    And, of course, you have worked cooperatively over the 
years with that relationship and understanding. East of the 
Mississippi they have just always had a lot, never worried too 
much. Actually, they worried more about managing too much than 
not enough. And, of course, we have seen that change here just 
in this area where we have just gone through a drought.
    I do not disagree with you about the finite resource we are 
dealing with and its character and how it will be seen and how 
it must be handled in the future, but I would suggest that 
caution be directed at actions you might take or efforts you 
might want to stimulate as it relates to who calls the shots. 
It is a national debate, and that is valuable. But if Western 
States are considered secondary in that debate and not primary, 
you are going to have difficulty.
    I do not want this capital city to determine the allocation 
of that resource for my State. That is the job of my capital 
city. And that is the way it will stay as long as I serve.
    Clearly, we must understand the value of the region and all 
of those of us participating, but we have formed river 
commissions before. We have formed a consortium amongst our 
States that live in the arid West to effectively manage. And at 
times the Federal Government has, in part, stepped in as an 
arbiter. But all I can suggest to you in this impending 
debate--and it will be there. My guess is it will not reach its 
peak until you and I are long gone.
    I am simply going to have to remain and will be, for 
obvious reasons, a pretty outspoken advocate that that debate 
occur at least for the West, the Pacific Northwest, in Olympia, 
Washington, or Boise, Idaho, or Salem, Oregon, and not in 
Washington, DC. Thank you.
    General Flowers. Yes, sir.
    Senator Craig. Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.
    General Flowers, the 2003 check-in date for the Columbia/
Snake River biological opinion is fast approaching and some 
have questioned whether the Federal caucus is adequately 
implementing that biological opinion.
    As I look at your Corps budget, it seems to contain a 
commitment to that effort, the Columbia estuaries, a new start 
in fiscal year 2003 and included in the budget upcoming, 2004.
    The Columbia River fish mitigation program was short of 
full funding in the 2003 appropriation bill, but the budget is 
$95 million in the 2004 budget. And significantly, thanks to 
the efforts of this committee, the subcommittee jump-started 
the Chief Joseph Dam gas abatement project by including funding 
in 2003, and I trust will do more in 2004.
    Can you just take a minute and give me your view on how the 
Corps is doing in meeting its obligations for the biological 
opinion, and is there more that we can be doing?
    General Flowers. Ma'am, I think we are working very hard at 
meeting all of the aspects of the Bi-Op. And I think as you 
stated, the budget for fiscal year 2004 reflects a commitment 
to do just that. So within the organization, we see ourselves 
meeting all of the requirements of the biological opinion, and 
we will continue working.
    Senator Murray. Is there more that we can be doing?
    General Flowers. I do not know what that would be, ma'am. I 
think you are doing a great job.
    Senator Murray. Well, I will keep pushing the committee.
    General Flowers. All right.
    Senator Murray. Well, thank you. Let me ask you about the 
John Day Lock and Dam. As you know, we have significant 
problems there, and both upstream and downstream locks are 
experiencing problems that are causing navigation of the locks 
to take twice as long. The dam is experiencing leakage under 
the foundation. And I guess I am kind of surprised that we are 
facing an operation and maintenance issue of this scale, and 
that it really appears to be unexpected.
    So I would like to understand: Were we, in fact, unaware of 
the deteriorating condition of that lock and dam? And what is 
the outlook for repairs?
    General Flowers. Let me defer that to General Griffin, 
please.
    General Griffin. Senator Murray, General Griffin.
    We have--the seepage--first, I will address the dam in 
general. It was built in the 1960's. It was built on fractured 
rock, and because of that you get seepage, and over time there 
has been increased seepage.
    So we were not surprised by this. We are surprised by the 
amount of increased seepage, so we--ma'am, we were not 
surprised by that. You know, there are really two issues there, 
as I know you are aware. One is a monolith that leaks is part 
of this foundation issue. And on the monolith itself, that was 
built in the 1960's. Repairs to the monolith will be complete 
in September 2003. That will be done at a cost of $3.8 million.
    The lock itself have--the failure to the gate itself, John 
Day Gate, the preliminary analysis, as we have not completed 
our review, but it is a cable operated gate, as you know, with 
a counterweight and what happened is we believe there was a 
binding there and the cable snapped.
    As a result of that, we have extended lockages by an hour 
and 10 minutes. The good news is, ma'am, that even though the 
lock gate failed, we were able to bring in a floating bulkhead 
and resume operations the next day. And so that we expect to 
award in April. It is going to cost $3.7 million. We will have 
that fixed by the end of June.
    And so I know one of the other concerns was: Will we have 
to shut the lock down in order to repair the monolith? And the 
answer is no. We will have to go to 12-hours-on/12-hours-off 
for 7 weeks, but we will not close the system during those 
repairs.
    Senator Murray. Okay. Thank you very much.
    General Griffin. Yes, ma'am. Yes.
    Senator Murray. I appreciate that. And, you know, John Day 
is just one example in the Northwest of a significant backlog 
of O & M funding needs. You have got the jetties at the mouth 
of the Columbia and Coos Bay is edging towards failure as well.
    And it seems like every lock and dam on the Columbia and 
Snake system could use an increase of O & M funding right now. 
And I know we have this funding shortfall for O & M, and it 
makes it hard to move forward on new start projects like the 
deepening of the Columbia River channel, which my ports feel is 
really essential for ports, farmers, and exporters as we 
compete in a global market.
    So when I talk to people in the Northwest, they tell me 
that they are concerned that O & M funding is being undercut 
because we are having to address the security needs at the 
Corps facilities.
    General, if you could, just talk to us about the security 
budget. Is it inadequate? Is it taking money from O & M? Is 
that a concern, and how do we address that?
    General Flowers. Well, this year in fiscal year 2004, we 
intend to take $104 million to put in place projects to better 
secure our critical infrastructure, and that does come out of 
our O & M account.
    Senator Murray. That comes out of the O & M. So it is a 
concern?
    General Flowers. Yes, ma'am.
    Senator Murray. And that will impact our ability to do a 
lot of our current O & M needs, as well as any new starts?
    General Flowers. There will be an impact, and based on the 
2004 budget that is proposed, our backlog of high priority 
maintenance will exceed $1 billion.
    Senator Murray. Well, I think that is a real concern for 
this committee that we need to be aware of.
    Senator Cochran. Thank you, Senator.
    Senator Murray. Thank you, Mr. Chairman.
    Senator Cochran. Senator Dorgan.
    Senator Dorgan. General, let me talk about a couple of 
things. And, Assistant Secretary, welcome to all of you.
    The Grand Forks flood control project, which I know you are 
involved in, the flood that virtually everyone remembers that 
caused the evacuation of the entire city of Grand Forks 
precipitated the requirement to build a new flood control 
project.
    The President's budget recommends a cut of nearly $10 
million. We appropriated $35 million in the omnibus bill this 
year. The President recommends $23.4 million. Will that keep us 
on schedule to complete this flood control project by the end 
of 2004, or will it throw us off schedule?
    General Flowers. Sir, this budget, the 2004 budget reflects 
fully funded projects that can be completed in fiscal year 
2004, and keeping eight other high priority projects on a most 
efficient schedule. The remainder of the projects will be 
continued, but their duration will have to be stretched out, 
and this is one of those projects. Yes, sir.
    Senator Dorgan. You are aware that FEMA will be remapping 
there and creating the new flood plain, and when that happens 
before the completion of the flood control project, 90 percent 
of the people living in both of those cities on both sides of 
the river, Grand Forks and East Grand Forks, will be required 
to spend $10 million to $15 million in the interim for flood 
insurance. The expectation was to try to move to complete this 
project concurrent with the remapping so that we did not have 
that problem.
    You are saying that the President's recommendation slides 
the completion date of this project at this point, huh?
    General Flowers. Yes, sir.
    Senator Dorgan. And how far does it slide it?
    General Flowers. Sir, we will have to take that for the 
record, if we could. But I believe it to be about 6 months to a 
year.
    [The information follows:]

    With $23 million for fiscal year 2004 and a similar amount for out-
years, the project would stretch out to fiscal year 2008. With a total 
appropriation of $60 million in both fiscal year 2004 and fiscal year 
2005, critical features could be substantially completed by December 
2005, and with follow-on appropriations of $1,811,000 in fiscal year 
2006 the project would be physically completed by June 2006.

    Senator Dorgan. Well, that is a major disappointment, 
obviously, to the people of Grand Forks. I think it is the only 
significant size city that was completely evacuated since the 
Civil War in this country. It was quite a sight to see.
    The Congress provided enormous help to the region as a 
result of that dramatic Red River Valley flooding, which I 
think was a 400- or 500-year flood. But the need to complete 
this flood control project is urgent, and I am really 
disappointed to see the President's recommendation. We will 
try, of course, to build some of that back, which is, I am 
sure, going to be very difficult.
    Let me ask you about the Devils Lake issue. That is a flood 
that has come and stayed, and you have announced a--the need 
for an outlet, and that a potential wet cycle and the 
devastation of having the water cascade naturally from the east 
side of the lake when it reaches that overflow area would 
produce pretty dramatic results downstream. And we have to stop 
that. And so you have announced the need for an outlet. You 
have actually announced a preferred outlet, is that correct?
    General Flowers. Yes, sir. We have released a final 
environmental impact statement with the constructed outlet as 
the preferred alternative. And that will be going out shortly 
for comment.
    The--in my time as chief of engineers, and in probably my 
time as an engineer, this was one of the most difficult 
problems that I have been associated with, in that Devils Lake 
is a closed basin and depends on essentially evaporation to 
remove whatever water collects inside that closed basin. And we 
know that geologically about every 800 to 1,200 years that 
basin will overtop and spill into the Sheyenne River, or the 
Red River of the North.
    And we have been maintaining data for about an 80-or-so-
year period. And so we really do not know where we stand in 
that geologic cycle. We do not know whether we are close to the 
800- or 1,200-year time when it may overtop. And what we have 
seen in the last few years has really pushed us out of the 
predictive--our ability to really predict what might happen.
    And so by choosing that as a preferred alternative, I was 
reflecting my recommendation that the Nation not accept the 
risk associated with ignoring this and using the more standard 
modeling that we do for river-type basins. And so that is why I 
announced this as a preferred alternative. It was a very tough 
call, but that is it, sir.
    Senator Dorgan. Will it be your request to fund this as 
soon as you go through the comment period? Because you have 
outlined a preferred alternative and the consequences of not 
doing something at this point, will it be your determination to 
recommend and request funding in the next budget cycle?
    General Flowers. Sir, following--pending the EIS responding 
to comments, et cetera, and once a record of decision is made, 
if that decision is to do an outlet, then we would probably 
move forward, yes, sir.
    Senator Dorgan. The budget request also zeros out the 
Breckenridge Flood Control monies, which stops the Wahpeton 
project, and Grafton Flood Control. Those are relatively small 
projects, but what would the anticipation be with zero funding? 
The project would just come to a halt?
    General Flowers. Sir, if the project is in preliminary 
design, it would be suspended until money becomes available. If 
it is a project that has not been begun, then one of the 
decisions made in formulating the 2004 budget was to not 
include any new starts in the budget.
    Senator Dorgan. Well, let me just say that I think the 
budget request is a huge disappointment in a number of areas. 
We are dramatically underfunded. Some key projects that must 
move forward were not funded appropriately. And you indicated 
that the budget will focus on finishing ongoing projects, but 
the fact is that has not been the case in several of our 
circumstances, but I want to work with you.
    Let me ask one additional question, if I might, with 
respect to the master manual, which at least the staff of 
Senator Bond would be disappointed if I did not ask, I am sure. 
That was a 6-month project that has now at the end of 12 years 
produced a preferred alternative, the exact details of which, I 
think, are still at this point not public. Is that correct?
    General Flowers. Yes, sir.
    Senator Dorgan. There is a preferred alternative that is 
bouncing somewhere between yourself, The White House, and CEQ 
and others. I had General Fastabend before the committee last 
year. And, you know, he made an appointment to see me on May 
23rd--I think it was May 23rd--the Corps was going to announce 
the preferred alternative the next day. And so he was coming to 
alert us to what the preferred alternative was going to be.
    That meeting was then cancelled, and in a subsequent 
hearing I said to General Fastabend, I am sorry, ``Could you 
tell me what it was you were going to tell me, because clearly 
you had a preferred alternative? You were going to disclose it. 
Can you tell me what it was you were going to disclose but did 
not disclose?''
    And the answer was, ``No, I am under orders not to do 
that.''
    I said, ``Whose orders?''
    He said, ``General Flowers' orders.''
    General Flowers. Oh.
    Senator Dorgan. So would you tell us what General Fastabend 
was going to tell us but could not tell us as a result of your 
orders, General Flowers?
    General Flowers. Sir, if I could, I would defer to the 
Under Secretary for this.
    Mr. Brownlee. Sir, most Under Secretaries probably become 
very good troubleshooters. I may have become a very good 
troublemaker in some respects. But I had just been appointed as 
the Acting Assistant Secretary of the Army for Civil Works when 
General Fastabend brought this matter to my attention. As I was 
briefed on it--and I admit to no long history of knowledge of 
these matters, but as I was briefed on it, it seemed to me 
that--clearly as you know better than I do, these are very 
complex, sensitive issues. There are differing sides. It does 
not seem to cut politically. It seems to cut regionally.
    Senator Dorgan. That is correct.
    Mr. Brownlee. There are also matters, very important 
matters dealing with endangered species that have to be dealt 
with, and it was my decision. I ordered General Fastabend to 
cease engines, to not take this outside the administration 
until I had an opportunity to, A, learn more about it; and B, I 
have to admit that it appeared to me that the process we were 
following could have turned into one that was adversarial even 
within the administration. And the 18 years I had spent working 
on the staff here in this body told me that the best way to 
address these kinds of issues is to get well informed, well 
intentioned people around a table and see if we cannot work 
something out.
    So my direction to him was that we would work 
collaboratively within the administration to see if we could 
reach some positions that would more adequately satisfy these 
very varying interests.
    I have to admit to you that this has gone on longer than I 
ever anticipated, but I also want to report to you that I think 
we are right on the verge of entering formal consultation--
reinstating that formal consultation with the Fish and Wildlife 
Service, and hopefully we can proceed.
    It certainly is not my intent and it has never been my 
intent to delay this as long as it has been. This actually 
happened in the April, May time period. I never dreamed I would 
be here saying, ``We are not there yet.''
    But as you know very well, it involves very complex issues. 
The drought has not helped things one bit. It has made it even 
more difficult. I just want to tell you, sir, it is my intent 
that the Army will continue to work this problem--but General 
Fastabend was doing exactly what I told him to do.
    So at this point in time, I just have to tell you that it 
is my hope--I had hoped that by yesterday, we would be back in 
formal consultation with the Fish and Wildlife Service. 
Unfortunately, I got a call last night. It may be delayed a day 
or two, but we are that close, I think, to reinstating formal 
consultation with the Fish and Wildlife Service.
    Senator Dorgan. Mr. Chairman, I perhaps have exhausted more 
than my time. May I make an observation about that, however?
    Senator Cochran. Of course.
    Senator Dorgan. This is approximately another 1-year delay 
on top of 11 previous. It is not the end of the world, but are 
you willing to set a time-line, like another 12 years or so?
    Because what will happen to us----
    Mr. Brownlee. Yes, sir.
    Senator Dorgan [continuing]. Is another assistant secretary 
will come in and say, ``You know something? This is 
controversial. And, General, I know you are working on this, 
but pull back.'' And so, you know, your grandchildren will be 
here and testifying on these things.
    We need to make progress. The fact is this river is 
critically important to the upstream and downstream States. It 
has become a kind of a Hatfield/McCoy situation, but somebody 
needs to step in and say, ``Look. Here is the best way to 
manage this river, recognizing all of the interests of all of 
the people that have an interest in this river.'' And it is not 
going to happen by delay, and it certainly is not going to 
happen by preventing us from knowing what the Corps has been 
doing. And they were at a point where they had a preferred 
alternative, and I would very much like to know what it is.
    Mr. Brownlee. Yes, I understand.
    Senator Dorgan. Can you tell me what it is?
    Mr. Brownlee. Sir, I would not know the detail adequately 
to describe it to you here at this point. I can tell----
    Senator Dorgan. Well, could you tell the General to do it 
then? Because he knows.
    Mr. Brownlee. My understanding is it has been kind of 
kicked around out there for awhile, but if I could, Senator, I 
just want to say that I do not disagree with any of the points 
you have made. I had hoped to appear before you to report a lot 
more progress than I am reporting now. There is another nominee 
for this particular position who I understand has already 
appeared in one hearing before the Senate, maybe at another 
one. But I did not feel that I could let that go forward 
knowing as little as I knew about it. I apologize for that. 
That is my problem and not yours.
    I think that while there is not a lot of apparent progress 
that I can put before you today, I think there has been some, 
and hopefully we can reach the kind of solution that will 
benefit the interests or balance the interest, at least, on 
both ends of this river.
    Senator Dorgan. Mr. Assistant Secretary, thank you.
    Senator Cochran. Senator Bennett.
    Senator Bennett. I have no questions for this panel.
    Senator Cochran. Thank you very much, gentlemen. We 
appreciate your attendance at this hearing.
    Senator Craig. Mr. Chairman?
    Senator Cochran. Senator Craig.
    Senator Craig. One last comment: Both the Senators from 
North Dakota and I are co-chairs of an important caucus here on 
the Hill, and the Army Corps is a major player. And we began an 
episode that started 200 years ago to celebrate it last month.
    General, you have got $310,000 in the budget for the Lewis 
and Clark Bicentennial. And you do play a major role in that. I 
believe that was a military activity and an Army activity some 
200 years ago.
    General Flowers. It was, sir.
    Senator Craig. Is that adequate funding?
    General Flowers. Sir, I think given all of the competing 
interests for the very scarce resources that the taxpayers 
have, it is probably sound. We have been trying to put as much 
of our O & M budget as we can toward preparing our portion of 
the Lewis and Clark Trail for or to receive visitors during the 
Bicentennial.
    Senator Craig. Yes.
    General Flowers. And I can provide to you and your staff a 
by-project listing of where we intend to invest money over the 
next couple of years.
    [The information follows:]

 CORPS OF ENGINEERS--OVERALL CAPABILITY FOR LEWIS AND CLARK PROJECTS AS
                              OF MARCH 2003
------------------------------------------------------------------------
                         Project                            Total Cost
------------------------------------------------------------------------
Hannibal Lock and Dam, WV...............................        $229,500
Lake Ashtabula, ND......................................         400,000
Mississippi River from Missouri River to Minneapolis....         475,000
Mississippi River from Ohio River to Missouri River.....       1,013,000
Clinton Lake, KS........................................          30,000
Perry Lake, KS..........................................         967,000
Fort Peck, MT...........................................       2,594,000
Garrison, ND............................................       4,808,000
Gavins Point, SD and NE.................................       7,396,000
Oahe, SD and ND.........................................         465,000
Dworshak Dam, ID........................................         738,000
Ice Harbor, WA..........................................       1,280,000
Little Goose, WA........................................          50,000
Lower Granite, WA.......................................         265,000
McNary, OR..............................................         601,000
Mill Creek, WA..........................................         150,000
Bonneville, WA and OR...................................       2,793,000
Dalles, WA and OR.......................................         184,000
John Day, WA and OR.....................................       1,403,000
Albeni Falls, WA........................................          65,000
Lake Washington Ship Canal, WA..........................          15,000
Mud Mountain Dam, WA....................................          15,000
Chief Joseph Dam, WA....................................          15,000
Libby Dam, WA...........................................          15,000
National Coordinator and Events.........................         310,000
                                                         ---------------
      TOTAL.............................................      26,276,500
------------------------------------------------------------------------


    Senator Craig. Well, I would like to see that. It is a 
short-lived project, but it is certainly one worthy of this 
country, and one to be celebrated. And we want to see it go 
forward for all of the public to enjoy. Thank you very much.
    Mr. Chairman, thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Cochran. Thank you, Senator.
    Thank you all, gentlemen, for your cooperation with the 
committee and being here today and presenting the budget 
request for the U.S. Army Corps of Engineers.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted by Senator Pete V. Domenici
                    constraining corps construction
    Question. One of the items the Corps' budget reduces significantly 
is the Preconstruction, Engineering, and Design, or PED-phase projects. 
In last year's enacted appropriation, the Congress funded approximately 
80 projects in this phase. The PED phase is the last stage before 
construction. The administration is proposing to cut that number to 
about 18.
    Can you, General Flowers or Undersecretary Brownlee tell the 
committee the practical effect this has for these projects?
    Mr. Brownlee. The reduction in the number of PED's is an important 
element of our budget proposal. It is not due to any limitation on 
planning or design funds. Rather, until the large backlog of ongoing 
construction projects is reduced we need to reduce the number of 
projects that we design and initiate. The Fiscal Year 2004 Budget 
continues much important ongoing planning, PED and research work but 
does put on hold many continuing PED activities that had been ongoing 
in previous years. The Fiscal Year 2004 Budget includes five new 
reconnaissance studies and provides significant funding for priority 
ongoing planning, research and PED work. Until the large backlog of 
ongoing construction projects is reduced we need to reduce the number 
of projects that we design and initiate.
    Question. Would this budget, if enacted, force the Federal 
Government to terminate contracts?
    Mr. Brownlee. No PED contracts would be terminated as a result of 
this budget. The PED activities would be in a pause status, not 
terminating, and as such could be continued when funds become 
available.
    Question. Is there funding included in your budget to cover the 
contract termination costs associated with this decreased PED activity?
    Mr. Brownlee. Since no PED contracts would be terminated, there is 
no termination costs associated with this decreased PED activity and no 
funds for termination would be needed.
                      transformation of the corps
    Question. The Congress and the administration are always seeking 
new ways to do things more efficiently, more effectively, and less 
costly. As always, we see continuous negative news reports about the 
Corps. I would like to commend you, General Flowers, for undertaking 
this effort to transform the Corps.
    Commonly, constituents complain about the permitting process, or 
that the construction process takes too long with a large project 
averaging from 10 to 15 years, depending on the size. Can you tell this 
committee what the Corps is doing internally to transform itself into a 
more productive agency?
    General Flowers. We are doing a number of things to transform 
ourselves into a more productive agency. First, we are strengthening 
the Planning Program. We're cooperating with major universities and 
have established a planner training and development plan, to include 
core curriculum, a new Planning Associates Program, and the Masters in 
Water Resources Planning. We are also moving forward with a Planning 
Leadership Development and looking at our structure with a focus on 
establishing centers of Specialized Planning Expertise needed for the 
21st Century. We are also looking to modernize planning processes, 
tools and models as well as our environmental benefit evaluation and 
formulation. We have developed and are now working on specific 
procedures to implement the Environmental Operating Principles to 
assist field planners in formulating environmentally sustainable civil 
works projects. Having more effective planning practices will lead to 
better studies, which will lead to better reports and a more efficient 
study process.
    We must improve our operations for more expeditious and productive 
performance. In recognition of this, I have been engaged, throughout my 
tenure as Chief, in an effort, initiated by my predecessor, to 
reengineer the organizations and business operations of the Corps of 
Engineers. In that effort we have selected the project management way 
of doing business as the basis for developing a business management 
system and attendant organizations and operations. This system, called 
PMBP, including an automated information system (AIS) to go along with 
it, is being implemented Corps-wide to manage all Corps projects more 
efficiently and effectively. Supporting policy and doctrine, 
definitions of our business processes, and curriculum are in now in 
place Corps-wide. Deployment of the AIS is scheduled to begin in mid-
October and once fully deployed, the PMBP system will greatly enhance 
our ability to better support the Army, other Federal agencies, and the 
Nation.
    As to our permitting process, we will have available by August 1, 
2003, an electronic application and comment form tied to the 
implementation of our new permit tracking system. Most Districts are 
currently publishing their Public Notices on the web and are moving 
toward electronic notification procedures. Other plans include the 
hiring of additional personnel to reduce process time for the large 
number of standard permits and general permits; continuing to encourage 
pre-application coordination allowing potential applicants to work out 
issues before submission of an application and allocation of additional 
resources to studies of watershed approaches to the permit process. The 
latter allows better prediction of future permit impacts in sensitive 
areas so permit review can be expedited for standard permits as well as 
other permit actions.
    Question. It is my understanding that the Corps has undertaken an 
examination of its processes, what is the most remarkable thing you 
have found?
    General Flowers. In examining the processes that are leading to the 
transformation of the Corps I have found it remarkable how powerful a 
concept ``working in teams'' can be. Through teams, we are able to 
exchange information, ideas, and concepts, which lead to solutions 
coming from a synergy that is simply not present when working in the 
traditional ``stovepipe'' method.
    Question. Did you seek out the views of any affected parties 
outside the Corps, its customers and critics?
    General Flowers. Yes, I have. Among those is the Corps Reform 
Network, comprising all parties interested in improving our program. We 
have also redoubled our efforts to engage Federal, State, and local 
agencies, stakeholders, and the public in meaningful dialogue on what 
the Corps should look like in the future. Additionally, I have issued 
communication principles to ensure open, effective, and timely two-way 
communication with the entire community of water resources interests. 
We know well that we must continue to listen and communicate 
effectively in order to remain relevant.
    Question. What are ways the Congress can assist the Corps to become 
better at its job?
    General Flowers. Senator I would seek any and all advice and 
guidance that the Congress can provide as to what you would like to see 
out of your Corps of Engineers. We have heard what the people we have 
spoken with have said, and we are working to transform the organization 
into a one that will provide better service to the Nation. We look 
forward to continue to working with the Congress as well as 
stakeholders and all who have provided input, so we can all do a better 
job.
           inland waterway and harbor maintenance trust funds
    Question. The administration's budget proposes to change the use of 
both the Inland Waterway Trust Fund and the Harbor Maintenance Trust 
Fund. As the author of the Inland Waterway Trust Fund, I am concerned 
about the impact of the proposal to utilize these funds for Operation 
and Maintenance projects and to utilize the Harbor Maintenance Trust 
Fund, strictly an O&M account, for construction projects.
    If the Congress was to enact these two trust fund changes, General 
Flowers, what is the effect?
    General Flowers. The commercial interests that use the inland 
waterways system are paying a portion of the costs of capital 
improvements. However, the costs of operation and maintenance, which 
are substantial, have continued to be borne entirely by the general 
taxpayers.
    The budget proposed to begin using some of the diesel fuel receipts 
to finance a portion of the inland waterways system's operation and 
maintenance costs. The administration has recommended using $146 
million for this proposal in fiscal year 2004, which would cover about 
38 percent of the estimated operation and maintenance costs. The 
remaining costs would continue to be financed through general tax 
revenues. Under the budget proposal, those who benefit commercially 
from past Federal investments in the inland waterways navigation system 
would pay a fair share of all of the system's costs--for the 
construction and major rehabilitation of projects, as well as their 
operation and maintenance.
    The budget includes a similar proposal for coastal ports and 
channels. Some users of certain U.S. ports now pay a tax in proportion 
to the value of their imports. Treasury deposits these receipts, along 
with tolls collected on the St. Lawrence Seaway, into the Harbor 
Maintenance Trust Fund. Until now, Congress has used this Fund to 
finance the cost of operating and maintaining these waterways. The 
budget proposes to expand it use to include the Federal costs of the 
Army Corps of Engineers work on coastal port and channel construction. 
The administration has recommended using $205 million for this purpose 
in fiscal year 2004.
    Question. Wouldn't the two trust funds be essentially diluted if we 
expand their scope?
    General Flowers. Under both proposals, those who benefit 
commercially from Federal investments in navigation would pay a fair 
share of all navigation system costs--for the construction and major 
rehabilitation of projects, as well as their operations and 
maintenance. Since the funds would still be used for navigation, we do 
not view the funds as being diluted.
    Question. Can you tell this committee, if Congress enacted these 
proposals today, at the current rate of spending, when would the trust 
funds be insolvent?
    General Flowers. At the current rate of collections and outlays, 
the Inland Waterway Trust Fund could run out of funds by the end of 
fiscal year 2006. Within this time frame, however, Congress and the 
administration should be able to reach agreement on the best way to 
allocate responsibility for future inland waterways operation and 
maintenance costs.
    The Harbor Maintenance Trust Fund balance would continue to grow, 
but more slowly, so long as annual outlays remain about the same and 
the fund continues to receive harbor maintenance tax payments as 
projected.
    Question. What decisions would we have to make if these two funds 
became insolvent?
    General Flowers. The draw down of the fund will be affected by many 
variables, including economic conditions and funding decisions. At the 
current rate of collections and outlays, the Harbor Maintenance Trust 
Fund would continue to show positive balances for many years. The 
situation with the Inland Waterways Trust Fund is not as favorable; it 
could run out of funds by the end of fiscal year 2006. Within this time 
frame, however, Congress and the administration should be able to reach 
agreement on the best way to allocate responsibility for future inland 
waterways operation and maintenance costs.
    power marketing administrations (pma's) direct spending proposal
    Question. The administration has included for the second year, a 
proposal to allow for direct spending by the PMA's of Operations and 
Maintenance work. Bonneville already has this authority, and I believe 
we need to pursue all of our options, however, I think we need to gain 
a better understanding of the effect of this proposal.
    How would the Corps budget be affected if we enacted this proposal?
    Mr. Brownlee. Enactment of a direct funding authorization together 
with the completion of necessary inter-agency Memoranda of Agreements, 
would reduce the need to provide annual appropriations for hydropower 
operation and maintenance (O&M) activities. The power customers are 
willing to spend more on maintenance activities than Congress has 
appropriated in recent years. We would apply the extra funds to 
hydropower maintenance. This will improve the reliability of the power 
that we provide by reducing the incidence and duration of unscheduled 
equipment outages.
    Question. What assurances do we have that the Corps would be 
credited those funds which would be directly funded? How do we know 
that the Corps gets the direct savings instead of those going to the 
General Fund of the Treasury?
    Mr. Brownlee. If the administration's proposal were enacted, we 
would execute the Memoranda of Agreement and begin direct funding in 
fiscal year 2004.
    Question. One important concern I have is that if this proposal 
were enacted, it appears that the costs for operations and maintenance 
would just be passed on to the ratepayer without any oversight, either 
by the administration or Congress. Is this true?
    Mr. Brownlee. Under the administration's direct funding proposal, 
every year all work and costs associated with a given Federal 
hydropower facility would continue to be documented and submitted to 
the PMA's. In the case of Bonneville, projected system costs are 
submitted to the administration and identified in the President's 
budget. Additionally, Congress requires a 3-year progress report on the 
direct funding with Bonneville, which was completed and submitted in 
December 2002. Thus the administration and Congress both will continue 
to provide oversight of the use of funds.
    Only costs associated with the production of electricity would be 
passed on to the rate payer under this proposal, consistent with the 
``beneficiary pays'' principle. Costs for other project benefits such 
as navigation and flood control would continue to be covered with 
annual appropriations. For multipurpose projects, the joint costs 
allocated to hydropower would continue to be funded through annual 
appropriations.
    Every year all work and costs associated with a given Federal 
hydropower facility must be documented and submitted to the PMA's. 
These costs are also submitted to the Federal Energy Regulatory 
Commission in evaluation of rates nationwide. The PMA's and the Corps 
use this information to develop 5-year work plans for projecting future 
costs. In the case of Bonneville, these projected system costs are 
submitted to the administration and identified in the President's 
budget. Additionally, Congress required a 3-year progress report on the 
direct funding with Bonneville, which was completed and submitted in 
December 2002.
    Question. How has Bonneville done under this authority? What's the 
biggest complaint?
    General Flowers. Through a strategy based on increased funding of 
Corps hydropower facilities in the northwest, the region has 
experienced a more stable power supply, additional generation of 
electricity, and increased revenues. Breakdowns have decreased from 5.5 
percent to 2.7 percent over the past 3 years under direct funding 
authority.
    Question. Can you tell us what benefits the Government and the 
Corps has gained with Bonneville having its own authority?
    General Flowers. One of the key management tools in efficiently 
maintaining a hydropower facility is the ability to address maintenance 
before a problem becomes larger. Direct funding achieves this objective 
by providing a way to make additional funds available for maintenance. 
In addition, direct funding has provided the flexibility to fund 
critical maintenance as it is identified, rather than having to attempt 
to forecast priorities as part of the budget cycle. This regional 
system approach creates more reliable and improved system performance 
in a region that 70 percent of the power needs are provided by the 
hydropower system. Consequently, the closer partnership between 
Bonneville and the Corps has led to an overall Performance Measurement 
Management System--where system performance drives investment 
decisions.
                        alamogordo flood control
    Question. There have been questions raised about the level of flood 
protection afforded to the residents of Alamogordo by the Alamogordo 
flood protection project. In particular, there have been indications 
that the project will not allow citizens within the area to be 
protected by the project, to get out of the need to pay for FEMA flood 
insurance. Could you please update the Committee on the status of the 
Alamogordo project and the level of flood protection that will be 
provided to the citizens of the area?
    General Flowers. The project consists of three diversion channels, 
South Channel, McKinley Channel, and North Channel. Construction of 
South Channel was initiated in late 2000. The project is designed to 
divert the 1 percent or 100-year flow from storms originating in the 
Sacramento Mountains safely through or around the City. Upon project 
completion, approximately 75 percent of currently flood-prone 
structures will be removed from the 100-year floodplain and will no 
longer be required to maintain flood insurance. Even with these 
improvements, some residual flooding will occur from storms occurring 
directly over the City. The local sponsor is currently considering the 
need for additional protection.
    Question. When will this project be ready to proceed to 
construction and what is the estimated time for completion?
    General Flowers. Phase I of the South Channel was initiated in 
December 2000 and completed in June 2002. Remaining phases of the South 
Channel will be initiated this spring, followed by McKinley Channel and 
North Channel. The schedule will depend upon the availability of 
funding and other factors. Subject to the usual qualifications on 
capability, we could compete the project by September 2009.
                         emergency supplemental
    Question. Are there any Civil Works requirements for the 
supplemental, either in terms of emergency or terrorism needs that the 
Congress needs to consider?
    Mr. Brownlee. Sir, at this time we expect to be able to address the 
priority emergency and terrorism needs without supplemental funding.
    Question. Within the fiscal year 2003 appropriation, are there 
sufficient funds to cover your terrorism related expenses?
    Mr. Brownlee. Senator, the Fiscal Year 2003 President's Budget for 
facility protection required $65 million, but the appropriation was $35 
million. This amount will be sufficient to pay for guards, provided 
that we do not enter a heightened alert status for an extended period.
    Question. From an economic security standpoint, is there anything 
that would make sense for the Congress to include in the Supplemental 
on behalf of the Corps?
    Mr. Brownlee. Sir at this time we do not expect to need 
supplemental funding.
                                 ______
                                 
               Questions Submitted by Senator Harry Reid
              civil works contribution to national defense
    Question. Please explain the contribution provided to this Nation's 
Defense by the Civil Works Program?
    General Flowers. The contributions provided by the Corps' Civil 
Works program are substantial. The Civil Works Program is a valuable 
asset in support of the National Security Strategy in many ways. 
Foremost, we have a trained engineering workforce, with world-class 
expertise, capable of responding to a variety of situations across the 
spectrum of national defense. In fact, skills developed in managing 
Corps projects transfer to most tactical engineering-related 
operations.
    The Civil Works mission complements and augments the Army's war 
fighting competencies providing established relationships with the 
Nation's engineering and construction industries--a force multiplier 
with ``On the shelf'' contracts available for emergencies. Civil Works 
members are deployable. During Operations Desert Shield/Desert Storm, 
more Civil Works employees volunteered for duty in Southwest Asia than 
were needed. To date, 250 civilian members of our Civil Works Program 
team have volunteered for deployment in support of Operation Enduring 
Freedom--providing engineering, construction, and real estate support 
specialists and professionals skilled in managing large, complex 
projects.
    Civil Works also provides professionals with expertise in natural 
and cultural resources, water quality, flood plain management or toxic 
waste control, helping the Army comply with more than 70 Federal 
environmental statutes, and a breadth of experience and workload in 
dozens of specialized fields that would not otherwise be possible. 
Finally, Army Engineers experienced in Civil Works play a major role in 
infrastructure in developing nations. They help to improve economic 
conditions and strengthen democratic institutions in these nations and 
foster good will through contact between governments and armed forces.
               civil works value to the national economy
    Question. Could you please provide an explanation of the overall 
value that the Civil Works program makes to this Nation's economy?
    General Flowers. The Corps Civil Works program supports our 
national economy through the provision of physical infrastructure 
features. These include navigation features that facilitate domestic 
and foreign commerce by means of waterborne transportation; flood 
control features that reduce the risk of flooding and the extent of 
flood damages incurred; and hydroelectric power generation features 
located at 75 Corps operated facilities.
                     economic security requirements
    Question. Does the administration intend to submit a supplemental 
appropriations bill covering unmet economic security requirements 
associated with the recently enacted Omnibus Bill or associated with 
the fiscal year 2004 budget?
    Mr. Brownlee. At this time, we expect to be able to address the 
priority needs of the Civil Works program without supplemental funding.
                         national water policy
    Question. General Flowers, in your role as the Chief of Engineers, 
what do you see as the major water resource challenges facing this 
country in the future? Do you see value in an overall National Water 
Policy Debate occurring?
    General Flowers. Sir, because the conflicting demands for water 
appear to be increasing across the country in major watersheds I see 
value in the debate. Last fall, the American Water Resources 
Association sponsored a seminar on the need to better coordinate water 
policy. Solutions to complex water problems will not be easy without 
collaboration of many government organizations at all levels, first and 
foremost at the State level.
                 preconstruction engineering and design
    Question. What was the decision process for funding only 19 
Preconstruction Engineering and Design studies in the fiscal year 2004 
budget? As Truckee Meadows is one that is going unfunded within my 
State, you can understand, I am very curious. Reno has suffered many 
devastating floods and is in desperate need of this flood protection 
project.
    Mr. Brownlee. The reduction in the number of PED's is an important 
element of our budget proposal. It is not due to any limitation on 
planning or design funds. Rather, until the large backlog of ongoing 
construction projects is reduced we need to reduce the number of 
projects that we design and initiate. The Fiscal Year 2004 Budget 
includes five new reconnaissance studies and provides significant 
funding for priority ongoing planning, research and PED work. For the 
Preconstruction, Engineering and Design, we funded those projects that 
had strong benefit to cost ratios or high environmental outputs and 
that are near completion.
       civil works budget less than previous years appropriations
    Question. We have noted that the President's proposed Fiscal Year 
2004 Budget is nearly $400,000,000 less than the fiscal year 2003 
enacted Civil Works Program, what is the impact of such a drastic cut 
on the ongoing Program?
    Mr. Brownlee. Senator, in fiscal year 2002, the Congress 
appropriated $1,828,035,000, net of a reduction for savings and 
slippage, for specifically authorized projects included in the 
Construction, General account in the fiscal year 2002 budget. The 
amount in the President's fiscal year 2004 budget for specifically 
authorized projects funded in the Construction, General account is 
$1,466,095,000, net of a reduction for savings and slippage. Increasing 
the budgeted amount for fiscal year 2004 by the difference of 
$361,940,000 would enable the acceleration of a number of projects, 
enabling benefits of approximately $1,500,000,000 to come on-line 1 
year sooner. Cost savings would largely be attributable to differences 
in price levels.
    Question. How do you plan to manage such a drastic cut?
    General Flowers. At this time, we are continuing to execute the 
fiscal year 2003 program enacted by the Congress. The fiscal year 2004 
budget was prepared before enactment of the fiscal year 2003 
appropriations, so we will need to do some reprogrammings to address 
changes in the continuing requirements of some work. We will finalize 
our execution plans after enactment of fiscal year 2004 appropriations 
legislation.
    Question. What level of funding would be necessary to maintain the 
progress realized in the Civil Works Program through the enacted 
appropriations levels for the past couple of years?
    General Flowers. Sir, the level of funding needed to execute at a 
level commensurate with fiscal year 2003 appropriations, including an 
adjustment for inflation, would be about $4.8 billion in fiscal year 
2004. However, the fiscal year 2003 appropriations included funds for 
projects that are not included in the fiscal year 2004 budget.
                          army recommendation
    Question. What was the Fiscal Year 2004 Program that the Department 
of the Army recommended? What rationale was provided as to why this 
program was not supported?
    Mr. Brownlee. Senator, a number of alternative funding levels were 
developed, proposed and discussed. As you know, the advice and counsel 
leading up to the final decision that form the basis of the President's 
budget are part of the internal deliberative process. The Army's 
requests were fully considered during the budget process.
    Question. What level of funding would be necessary to sustain the 
progress developed in fiscal year 2003 in meeting the Nation's water 
infrastructure needs?
    Mr. Brownlee. Sir, the level of funding needed to execute at a 
level commensurate with fiscal year 2003 appropriations, including an 
adjustment for inflation, would be about $4.8 billion in fiscal year 
2004. However, the fiscal year 2003 appropriations included funds for 
projects that are not be included in the fiscal year 2004 budget.
    Question. If the administration's budget proposal is enacted, what 
will be the impact on meeting the Army Corps' O&M backlog? The 
construction backlog?
    General Flowers. Our latest estimate of the construction backlog of 
ongoing budgeted construction work is $21 billion. I should note that 
this figure does not include the construction costs of projects in 
preconstruction, engineering and design or that are not budgeted. The 
fiscal year 2004 budget applies nearly $1.3 billion to construction of 
specifically authorized projects, as part of the administration's 
comprehensive strategy to reduce the backlog over time.
    We now refer to our operation and maintenance work that cannot be 
deferred without added cost or a loss in performance as high priority 
work. With the Fiscal Year 2004 President's Budget of $1.939 billion 
for the Corps Operation and Maintenance, General program there would be 
a backlog of an estimated $1.011 billion in high-priority operation and 
maintenance work.
                    relationship to national defense
    Question. What is the relationship of the Corps' Civil Works 
Program to the defense of our homeland?
    General Flowers. The Civil Works Program is a valuable asset in 
support of the National Security Strategy in many ways. Foremost, we 
have a trained engineering workforce, with world-class expertise, 
capable of responding to a variety of situations across the spectrum of 
national defense. In fact, skills developed in managing Corps projects 
transfer to most tactical engineering-related operations. The Civil 
Works mission complements and augments the Army's war fighting 
competencies providing established relationships with the Nation's 
engineering and construction industries--a force multiplier with ``On 
the shelf'' contracts available for emergencies. Civil Works members 
are deployable. During Operations Desert Shield/Desert Storm, more 
Civil Works employees volunteered for duty in Southwest Asia than were 
needed.
    To date, 250 civilian members of our Civil Works Program team have 
volunteered for deployment in support of Operation Enduring Freedom--
providing engineering, construction, and real estate support 
specialists and professional skilled in managing large, complex 
projects, transferable to most tactical engineering-related operations. 
Civil Works also provides professionals with expertise in natural and 
cultural resources, water quality, flood plain management or toxic 
waste control, helping the Army comply with more than 70 Federal 
environmental statutes, and a breadth of experience and workload in 
dozens of specialized fields that would not otherwise be possible.
    Finally, Army Engineers experienced in Civil Works play a major 
role in infrastructure in developing nations. They help to improve 
economic conditions and strengthen democratic institutions in these 
nations and foster good will through contact between governments and 
armed forces.
                            terrorist threat
    Question. How would you characterize the threat from terrorism to 
this country's vital Civil Works Projects?
    General Flowers. The vulnerability of water resources 
infrastructure facilities to potential acts of sabotage has always been 
a concern throughout history. All of our projects have some measure of 
protection in place based on traditional risk assessments and would be 
happy to personally discuss these threats further with you.
    Question. Could you provide an example of the kind of risk that you 
are talking about?
    General Flowers. Again, I would be happy to personally discuss 
these threats with you.
              minimizing vulnerability to terrorist threat
    Question. What efforts are you undertaking to minimize this risk?
    General Flowers. Since the events of September 11, 2001, we have 
increased and modified our security posture at our facilities in 
response the changing threat levels. We performed an initial screening 
of over 600 dams and other facilities and determined that approximately 
350 projects could be considered to have high consequences in the event 
of a terrorist attack. Consequences were based on the potential for 
loss of life and/or impacts to the facility purpose including 
navigation, flood control, hydropower, and ecological outputs. The list 
was further refined to the 306 facilities that we believe warrant 
security upgrades and detailed assessments and review has been 
completed on all of these. Vulnerability assessments produce a 
recommended system of improvements targeted to reduce the risk 
associated with potential threats to the facility. Elements of the 
proposed systems can include cameras, lighting, fencing, structure 
hardening, and access control devices designed to improve detection and 
delay at each facility.
    One hundred four million dollars of the Operation and Maintenance 
funds provided in this budget are targeted for facility security. We 
will direct funding to those priority projects at which there is 
potential for loss of lives downstream or economic consequences of 
greater than $200 million and will continue security improvements at 
our administrative facilities.
    Question. Does the President's proposed budget provide adequate 
resources to address this risk?
    General Flowers. Sir, we are funding the highest priority need 
first. Based on current assessments, we are comfortable with our 
funding path.
    Question. What funds would you need to adequately address the risk 
to our Civil Works Projects?
    General Flowers. Sir, we are funding the highest priority need 
first. Based on current assessments, we are comfortable with our 
funding path.
               commodity flow through corps built harbors
    Question. What is the percentage of the Nation's commerce that come 
into or leave this country that goes through a Corps-built and -
maintained harbor?
    General Flowers. Over 95 percent of the commodities that leave or 
enter this country by ship moves through our Nation's coastal and Great 
Lakes harbors, virtually all of which is in Federal channels maintained 
by the Corps.
            historic spending for infrastructure maintenance
    Question. Could you characterize the proportion of the 
discretionary budget of the Federal Government that is directed toward 
building and maintaining this country's water infrastructure today to 
say 30 years ago?
    General Flowers. According to information published in the fiscal 
year 2004 ``Historical Tables of the Budget of the United States 
Government'', in fiscal year 1974, Federal Government outlays in 
support of the ``water resources'' subfunction within the ``Natural 
Resources and Environment'' function totaled $2.200 billion or 1.6 
percent of discretionary outlays totaling $138.2 billion.
    In the proposed fiscal year 2004 budget, Federal Government outlays 
in support of the ``water resources'' subfunction within the ``Natural 
Resources and Environment'' function are estimated to be $5.062 billion 
or 0.6 percent of discretionary outlays totaling $818.8 billion.
    With respect to the Army Corps of Engineers Civil Works program, in 
fiscal year 1974, the Corps' outlays were $1.664 billion, or 1.2 
percent of total Federal discretionary outlays. In the proposed fiscal 
year 2004 budget, the Corps' outlays are estimated to be $4.117 
billion, or 0.5 percent of total Federal discretionary outlays.
             deteriorating infrastructure--economic impacts
    Question. Could you provide some examples of this deteriorating 
infrastructure could have to this Nation's economic and National 
security?
    General Flowers. Our inland waterways handle more than 15 percent 
of the Nation's intercity freight traffic, including 20 percent of the 
coal for power plants, petroleum products such as gasoline and diesel 
fuel, strategic chemicals and minerals, and more than half of our 
export grain. Generally, as this waterway infrastructure has aged, 
backlog of maintenance and repair needs has grown. While many inland 
waterway segments are heavily used, other service relatively low 
volumes of traffic. The budget gives priority to the maintenance of 
segments that carry a higher volume of traffic due to the economic 
impacts that a breakdown could have.
    Question. Could you provide a historical perspective on the value 
of the Nation's inland waterways for Nation security and economic 
security?
    General Flowers. Many military and industrial facilities were 
located on our inland waterways during World War II for added security. 
Ships and submarines were built and launched from our inland waterways. 
Over time, our inland waterways have been used to move strategic and 
oversized equipment, such as nuclear generators and rocket components, 
as well as military vehicles and equipment.
                         environmental projects
    Question. What percentage of the Fiscal Year 2004 Budget is 
associated with environmental projects?
    General Flowers. Sir, nearly 19 percent of the fiscal year 2004 
budget is classified as environmental, including the Regulatory Program 
and Formerly Used Remedial Action Plan (FUSRAP) Program.
                                 ______
                                 
             Questions Submitted by Senator Robert C. Byrd
                      west virginia flood recovery
    Question. What is the status of the flood-recovery work for which 
the Corps was authorized to conduct at a level of $8 million in the 
Fiscal Year 2001 Supplemental Appropriations bill for the July 2001 
floods in West Virginia?
    General Flowers. All work is complete. The Huntington District 
Corps of Engineers accomplished three primary missions. These missions 
included repair of public infrastructure, repair and restoration of 
flood-damaged facilities at Corps' projects, and flood documentation. 
Flood recovery efforts were accomplished in close coordination with the 
Federal Emergency Management Agency, the Natural Resources Conservation 
Service, the West Virginia Conservation Agency, and other Federal and 
State disaster coordinators.
    Approximately $5.1 million was used to assist affected counties 
with infrastructure repair. Thirty-one emergency streambank protection 
projects were constructed along West Virginia State Routes 1, 3, 16, 
24, 35, 54, and 97 in Boone, Wyoming, McDowell, Raleigh, Mercer, and 
Fayette Counties.
    Approximately $2 million was used to repair and restore existing 
facilities at several Corps projects that incurred damage during the 
July 2001 event. At the R.D. Bailey project, $1,777,000 was utilized 
for flood debris cleanup and to relocate facilities out of the flood 
plain. At Summersville Lake, $80,000 was utilized to remove drift and 
debris accumulations. On the Kanawha River, $143,000 was utilized for 
removal of flood-related silt material following the flooding.
    Approximately $900,000 was utilized for flood documentation. This 
included flood damage surveys of residential, commercial, and public 
structures. Surveys of damages to highways and utilities were also 
conducted. High water marks were established and data was collected and 
analyzed for stream profiles and cross-sections. Public workshops were 
conducted to confirm structure damage and obtain flood experiences and 
feedback for future use in the development of potential solutions to 
the flooding problem.
    Question. What is the status of the flood-recovery work for which 
the Corps was authorized to conduct at a level of $10 million in the 
Fiscal Year 2002 Supplemental Appropriations Bill for the May 2002 
floods in Southern West Virginia, Eastern Kentucky, and Southwestern 
Virginia?
    General Flowers. Work is currently ongoing. The primary mission of 
the Huntington District Corps of Engineers is to repair public 
infrastructure and provide flood documentation. This mission is being 
done in coordination with Federal, State and local emergency management 
organizations.
    Approximately $9,500,000 will be used to assist affected counties 
with infrastructure repair in West Virginia, Kentucky and Virginia. Of 
this, approximately $6,000,000 will be used in West Virginia for 
emergency road embankment repairs along U.S. Route 52, WV State Routes 
16, 80 and 83, and County Routes 1, 3, 7/8, 7/28, 17, and 32/55. 
Approximately $1,750,000 will be used in Kentucky for emergency road 
embankment repairs along Kentucky State Routes 195 and 1441, and 
approximately $1,750,000 will be used in Virginia for emergency road 
embankment repairs along Virginia State Routes 67 and 83.
    Approximately $500,000 will be utilized for flood documentation. 
This will include flood damage surveys of residential, commercial, and 
public structures. High water marks have been established and will be 
used to determine approximate flood frequency levels.
                        marmet locks replacement
    Question. Which lock in the United States is most heavily used?
    General Flowers. Marmet is the most heavily used lock in terms of 
commercial lockage cycles. In 2002, Marmet processed over 15,000 
commercial lockages.
    Question. Is the Marmet Lock replacement important to maintaining 
and increasing the efficient flow of commerce along the Kanawha and 
Ohio Rivers? How many tons of cargo, and what type of cargo, were 
shipped through the locks in 2002? Does the project have a strong 
benefit/cost ratio?
    General Flowers. The Marmet lock replacement is important to 
maintain and increase the flow of commerce. The locks move millions of 
tons of cargo to and from West Virginia. Improvements at Marmet would 
reduce the average transit time from 4.7 hours to 0.8 hours, a 
reduction in lock transit time of 3.9 hours. At 2002 traffic levels, 
the new lock would yield almost 14.8 thousand hours of reduced trip 
time for the 3,793 tows that used the project.
    In 2002, nearly 13.5 million tons of cargo were shipped through 
Marmet. Coal accounted for 93 percent of all tonnage, or 12.6 million 
tons. Other commodities were petroleum, crude materials, chemicals, and 
manufactured machinery and goods.
    The project has a total benefit to cost ration of 2.5 to 1 and a 
remaining benefit to cost ratio of 4.2 to 1.
    Question. The Marmet Locks and Dam are nearly 70 years old. Are the 
locks deteriorating? If so, what impact does this have on 
transportation and the safety of those working at the locks, in the 
barge industry, and on area residents?
    General Flowers. The Marmet locks and dam were placed in service in 
1934. The locks have experienced significant deterioration over the 
nearly 70 years of operation. The small chambers at Marmet require up 
to five lockage cycles of the operating gates and valves to process a 
typical Kanawha River tow. This intense level of usage has resulted in 
accelerated deterioration in recent years. Concrete and embedded steel 
at critical miter gate areas have failed, causing additional delays for 
repairs and operational procedure changes to insure lockage safety. The 
upstream guard wall was built on wooden cribbing which has failed. The 
guard wall has moved horizontally 6", and has dropped vertically more 
than 12". The potential for collapse of this guard wall is high, and 
significant economic impact would result if lock access were blocked. 
Further, to assure both lock and tow personnel safety, no one is 
allowed on the upper guard wall while tows are approaching the lock and 
landing on the guard wall. Although there are no safety issues with 
area residents, locking procedures have been modified and restrictions 
placed on commercial tows to minimize the risk of collapse of the guard 
wall.
    Question. When are the lock chambers projected to reach maximum 
capacity? What is the impact of reaching maximum capacity? Is there 
potential for the same type of delays, which averaged 32 hours per 
transit, and number of accidents which were prevalent at the former 
Gallipolis Locks and Dam on the Ohio River prior to the replacement of 
the locks and the rehabilitation of the dam?
    General Flowers. The existing lock chambers (with a capacity of 20 
million tons annually) are projected to reach maximum capacity in 2005, 
with average delays of approximately 47 hours per tow. High delays are 
expected as the capacity limit is approached. While the chambers at 
Gallipolis required double cutting of typical Ohio River tows, the 
undersized chambers at Marmet require five cuts to process the typical 
Kanawha River tow. Average transit time at Marmet could exceed the time 
experienced at Gallipolis prior to the replacement of its locks.
    The old Gallipolis locks were a safety hazard due to a dangerous 
upstream curve on the lock approach, when coupled with high water 
conditions. That condition does not exist at Marmet.
    Question. What improvements will be realized with a completed new 
lock at Marmet?
    General Flowers. The Marmet lock replacement includes construction 
of a new 110 wide  800 long lock chamber landward of the existing 
56 wide  360 chambers. This lock is sized to process a Kanawha River 
tow consisting of nine jumbo barges in a single lockage cycle, reducing 
the average transit time to 0.8 hours. A new guard wall will provide 
improved approach conditions for the new lock and continue to provide 
protection to the navigation dam. The new lock will feature 
programmable logic control to permit safe efficient operation of the 
lock from a single central location.
    Once the Marmet project is completed, the aging Kanawha River locks 
will have been completely modernized. New locks at Winfield and Marmet, 
and an extended lock chamber at London, will provide industry an 
efficient, effective transportation system.
    Question. Has the Corps completed real estate acquisition in Belle? 
How many properties have been acquired?
    General Flowers. The Marmet locks replacement project required 
acquisition of 216 tracts of real estate. The real estate acquisition 
phase was completed in 2002.
    Question. What is the President's Fiscal Year 2004 Budget request 
for the Marmet project? What will this amount allow the Corps to 
accomplish?
    General Flowers. The fiscal year 2004 budget request for Marmet is 
$52.154 million. These funds would be used to continue construction of 
the new lock, and continue environmental mitigation and cultural 
mitigation.
    Question. What is the full capability for Marmet? What additional 
work will this amount allow the Corps to accomplish?
    General Flowers. The maximum capability estimate for a study or 
project reflects the readiness of work for accomplishment. It is the 
most that the Army Corps of Engineers could obligate efficiently during 
the fiscal year for that study or project. Because each estimate is 
made without reference to the rest of the Army Civil Works program, 
these estimates are not cumulative. Civil Works studies and projects 
compete for funding and manpower. The President's fiscal year 2004 
budget for the Army Civil Works program proposes funding levels that 
reflect this administration's assessment of nation priorities in view 
of the many potential uses of Federal funds. Consequently, while the 
Corps could obligate additional funds on some studies and projects, 
offsetting reductions within the Army Civil Works program would be 
required to maintain overall budgetary objectives. Furthermore, the 
budget allocates the funding available to the army Civil Works Program 
in a manner that would enable the Corps to use funds effectively. The 
fiscal year 2004 capability for Marmet is $69.2 million. These funds 
would allow lock construction to proceed at an efficient rate in fiscal 
year 2004.
                      london locks rehabilitation
    Question. What is the benefit/cost ratio of the London Locks 
Rehabilitation project?
    General Flowers. The total benefit/cost ratio of the London locks 
rehabilitation project is currently 21.1 to 1.
    Question. Now that all of the necessary funding for the 
rehabilitation project has been secured, what is the current status of 
the project and what is the anticipated completion timeframe?
    General Flowers. Construction to replace the upper guard wall and 
extend the size of the lock chamber from 360 to 407 was initiated in 
March 2002. The contract is 85 percent complete, and will be completed 
in the summer 2003.
    Question. By what percentage will lock capacity increase once the 
rehabilitation is completed? What other benefits will be derived?
    General Flowers. Once rehabilitation is complete, the riverward 
lock capacity will increase by 21 percent. The chamber will better 
serve modern tows by accommodating two jumbo barges in a single lockage 
cycle, instead of one. Jumbo barges are the navigation industry's 
preferred mode of shipment on the Kanawha River. Delays and queuing 
time will be substantially lessened, an important benefit since traffic 
demand at London is expected to grow. The other important benefit of 
project rehabilitation is the ability to provide a safe and reliable 
level of service. This will be achieved once replacement of the upper 
guard wall is complete. The wall had failed structurally.
                      bluestone dam safety project
    Question. What risks are currently posed by the Bluestone Dam to 
the communities, businesses, and the environment below the dam?
    General Flowers. Under current design criteria, the probable 
maximum flood (PMF) is estimated to overtop the existing dam by 8. Dam 
failure would cause catastrophic flooding along the New, Greenbrier, 
Gauley, Kanawha, and Elk Rivers, including the metropolitan area and 
heavily industrialized capital city of Charleston, West Virginia. This 
would place more than 115,000 persons at risk, with property damages in 
excess of $6.5 billion.
    Question. What level of flooding would cause the dam to fail 
catastrophically? How likely is it that such a level of flooding might 
occur? What is the likelihood that the dam will fail in the next 50 
years? In the next 100?
    General Flowers. The dam would be in danger of failing if pool 
levels approaching the top of the existing dam were to occur. This 
flood level, known as the 500-year flood event, has a 0.2 percent 
chance of occurring in any year, a 10 percent chance of occurring at 
least once in the next 50 years, and an 18 percent chance of occurring 
at least once in the next 100 years.
    Question. What is the current status of work completed on the dam 
safety project with available funds?
    General Flowers. The first phase of construction is underway. Phase 
1 includes installation of a thrust block to partially stabilize the 
dam and extension of the six penstocks which will be used to improve 
discharge capacity if an event approaching the magnitude of the PMF 
event were to occur. In fiscal year 2003, installation of the penstock 
extensions will be completed, and work will continue on placing the 
mass concrete thrust blocks. Plans and specifications will be initiated 
for phases 2A and 2B. Phase 2A includes the Route 20 gate opening, 
stilling basin training walls, east abutment monolith, fishing pier, 
and other miscellaneous work. Phase 2B includes the 8 pre-cast 
concrete parapet wall added to the top of the dam to accommodate the 
PMF event and anchors which will further stabilize the dam.
    Question. Are there additional Corps capabilities for this project 
above those identified in the President's Fiscal Year 2004 Budget?
    General Flowers. Subject to the prior stated qualifications on 
capabilities, the Corps has an additional capability of $1.7 million 
above the President's Budget request of $2.6 million, for a total of 
$4.3 million. The added funds could be used to initiate Phase 2A 
construction.
    Question. Contingent on adequate funding being provided, this 
project is not scheduled for completion until September 2008. In the 
meantime, what additional measures can be taken to minimize the risks 
to the public and to ensure that this project remains on track and a 
high priority?
    General Flowers. With maximum level funding that the Corps could 
obligate efficiently, the project could be completed in September 2009. 
An additional year is needed beyond our previous estimates in order to 
accomplish additional model studies which will influence the design for 
anchors in the stilling basin for the second phase of construction.
    No temporary structural measures are feasible. The Huntington 
District maintains a close vigil of any significant storm event that 
could potentially move into or through the Bluestone Lake drainage 
basin, and provides forecasts as early as possible in order to 
determine if and when a hazardous pool level could occur. The Water 
Control Plan provides for special operational techniques during major 
floods to minimize risks to the public. In the event a forecast 
indicates possible flow through the spillway, the Dam Safety Officer 
would be briefed immediately, as well as other key personnel. 
Continuous monitoring and updating of forecasts would occur and every 
effort made to control the event. If spillway flow becomes imminent, 
the District Engineer/Dam Safety Officer would decide if downstream 
evacuation was warranted, and appropriate emergency organizations and 
law enforcement agencies would be notified in order to minimize risk to 
the public.
    Question. What extra efforts is the Corps making to minimize the 
impact of the project construction on the citizens of Hinton?
    General Flowers. The Corps has undertaken several extra efforts in 
order to minimize the impacts of project construction on the citizens 
of Hinton. The Corps continue to work with a committee of local 
residents appointed by the mayor to develop solutions to their concerns 
about traffic, safety, and noise. In order to divert traffic away from 
the Bellpoint community, a temporary 1,360 Bailey-type bridge was 
built over the stilling basin to accommodate all construction traffic 
during both phases of construction. The contractor uses the bridge for 
all construction traffic including employee access and all construction 
deliveries.
    The committee and mayor are involved in Corps bi-monthly project 
team meetings and quarterly partnering meetings with the contractor. A 
web site has been created to keep town residents aware and informed of 
the current status of the project, and serves as a way to provide 
feedback and opinions. The web address is www.lrh.usace.army.mil/pa/
HotTopics/bluestone.htm. The project's Resident Engineer prepares a 
monthly update for the area newspaper to inform residents about project 
status. This information is well received and appreciated by the 
community.
                  greenbrier river basin flood control
    Question. What is the status of the City of Marlinton's effort to 
identify a local cost share partner?
    General Flowers. We are currently coordinating with the State of 
West Virginia, the City of Marlinton, and the affected State 
legislators to identify the appropriate non-Federal sponsor.
    Question. Are there any Federal competitive grants that can be used 
as the local match for the construction of Corps local flood control 
projects, such as the Community Development Block Grant program under 
the U.S. Department of Housing and Urban Development?
    General Flowers. Other Federal agency funds, such as those you 
mentioned, can be used to cost share in Corps projects, if the granting 
agency certifies in writing that the use of those funds for that 
purpose is authorized.
    Question. What type of in-kind contributions can the City of 
Marlinton offer to the Corps to help defray costs associated with the 
local match?
    General Flowers. The town would receive credit for in-kind 
contributions, such as value of lands, easements, rights-of-way, 
relocations, and suitable borrow and dredged or excavated material 
disposal areas.
    Question. What activities are currently being conducted on the 
Marlinton local protection plan?
    General Flowers. Current activity is limited to coordination 
efforts with non-Federal interests to develop a project financing plan 
and secure the local cost sharing match.
    Question. What capabilities does the Corps anticipate for fiscal 
year 2004 for the Marlinton local protection plan?
    General Flowers. Subject to the previously mentioned qualifications 
on capability, the maximum fiscal year 2004 capability is $2.5 million. 
If provided, these funds could be used to continue detailed design, 
complete plans and specifications for the first construction phase, and 
prepare and execute a Project Cooperation Agreement. It is possible 
that limited construction could possibly begin late in fiscal year 
2004.
            west virginia tug fork flood protection projects
    Question. The President's request includes $15 million for the 
multi-State Levisa and Tug Fork projects for fiscal year 2004; however, 
none of these funds are slated for projects in West Virginia. Why are 
no monies budgeted for the West Virginia Tug Fork projects?
    General Flowers. There is no budgeted West Virginia project in the 
Tug Fork program because economic analysis indicates that the costs 
exceed the benefits.
    Question. It was projected that the Corps would be closing out the 
Lower Mingo, Upper Mingo, and Wayne County components of the project by 
the end of fiscal year 2003. Will this goal be met? Please provide me 
with a chart noting the number of eligible participants and the Federal 
and local dollars spent for each region, including other improvements 
that were made to the authorized areas such as new schools, community 
structures, etc.
    General Flowers. The three project components are nearly complete. 
The majority of floodproofing and acquisition efforts will be completed 
by the end of fiscal year 2003. The only remaining item is completion 
of the Lower and Upper Mingo water and sewer service that will connect 
flood proofed homes to the county-administered public system which is 
being developed. However, the sewer/water contract has not yet been 
awarded. Funding has been appropriated for the Federal share on the 
contract. Final project closeout should occur in fiscal year 2004. No 
further appropriations are necessary for the Lower Mingo, Upper Mingo, 
and Wayne County elements of the project.
    The following chart identifies the number of eligible participants 
and the Federal and non-Federal dollars spent to date for Lower Mingo, 
Upper Mingo, and Wayne Counties.

                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                   Project cost
                                                     Eligible    -----------------------------------------------
                                                   participants        Total          Federal         Non-Fed
----------------------------------------------------------------------------------------------------------------
Lower Mingo County..............................             585           $46.1           $43.8            $2.3
Upper Mingo County..............................             270            13.5            12.8             0.7
Wayne County....................................             115             6.6             6.3             0.3
----------------------------------------------------------------------------------------------------------------

    Other significant project improvements are the new East Kermit 
Elementary School and the new Kermit Town Hall and Fire Station. In 
addition, all floodproofed structures in each of these three program 
areas will be connected to a State-approved water and sewer system.
    Question. What activities will remain to be completed beyond fiscal 
year 2003 in McDowell County and what is the cost of the remaining 
effort? What capability does the Corps have in McDowell County in 
fiscal year 2004?
    General Flowers. Remaining activities include voluntary 
acquisition, floodproofing, and the design and construction of 
relocated schools, town halls, and fire stations. Assuming a 100 
percent participation rate in this voluntary non-structural project, 
the remaining cost is $162.3 million. Subject to the previously 
mentioned qualifications on providing capability amounts, the 
capability for fiscal year 2004 is $8.0 million.
                            lower mud river
    Question. What is the status of the revaluation report being 
conducted by the Corps and the options that are being examined?
    General Flowers. The draft report/Supplemental Environmental Impact 
Statement is scheduled for completion in March 2003.
    A total of eight alternatives have been considered. One is the 
channel alternative proposed by the NRCS, which consists of 
approximately 2.8 miles of channel modifications, including stream 
widening and overflow cuts, along the Mud River. A second plan would 
divert flood waters approximately 2 miles around the Milton area. The 
remaining six plans are levees, with varying levels of protection.
    Question. What are the construction costs associated with each 
option and the anticipated maintenance costs that will be the 
responsibility of the local sponsor?
    General Flowers. Based upon current estimates, the first levee plan 
(low-level protection) will cost an estimated $30 million, with a 
$13,000 annual O&M cost. The second levee plan (high-level protection) 
is estimated to cost $40 million, with a $30,000 annual O&M cost. These 
costs are subject to change during final design reviews and preparation 
of the final report.
    Question. Has the local sponsor indicated an ability to cover the 
maintenance costs of the options being considered?
    General Flowers. The City of Milton and the West Virginia 
Conservation Agency have indicated that the O&M costs for both levee 
plans would be affordable.
    Question. What activities will remain to be completed beyond fiscal 
year 2003 for the Lower Mud River project and what is the cost of the 
remaining effort? What is the Corps capability for this project in 
fiscal year 2004?
    General Flowers. Remaining efforts include completion of detailed 
design, completion of plans and specifications, execution of the 
construction Project Cooperation Agreement, and construction of the 
project. The Federal cost of the remaining effort is contingent upon 
the alternative recommended in the reevaluation report. Subject to the 
previously mentioned qualifications on capability, the maximum fiscal 
year 2004 capability is $1.5 million. We could use these funds to 
continue activities, including completing detailed design and 
initiating plans and specifications.
                 little kanawha river feasibility study
    Question. What is the status of the feasibility study for the 
Little Kanawha River, for which $100,000 was provided in fiscal year 
2003?
    General Flowers. The Corps is meeting with potential sponsors for 
projects that were identified in the reconnaissance report. If a 
sponsor is identified, a feasibility study cost sharing agreement would 
be executed and the study initiated.
    Question. Does the Corps have additional capabilities for this 
endeavor in fiscal year 2004?
    General Flowers. There are no additional fiscal year 2004 
capabilities beyond the President's Budget request of $65,000 for this 
study.
                       operations and maintenance
    Question. What are the budgeted amounts for Operations and 
Maintenance (O&M) for the Kanawha River Locks and Dam, Summersville 
Lake, and R.D. Bailey Lake?
    General Flowers. The President's Budget for fiscal year 2004 
contains the following requests: for Kanawha River Locks and Dam, 
$7,655,000; for Summersville Lake, $1,469,000; and for R.D. Bailey Lake 
$1,457,000.
    Question. What are the full capabilities for each of the above, and 
what additional O&M could be performed if full capability was achieved?
    General Flowers. Subject to the previously mentioned qualifications 
on capability, the maximum capability for the Kanawha River Locks and 
Dam is $19,666,000. Additional work to be performed if the maximum 
capability were appropriated includes the following: repair concrete 
dam piers at Marmet and London; replace rail and structural members of 
dam bulkhead cranes at Marmet and London; modify lower guide and guard 
wall ladders at London, Marmet, and auxiliary chamber at Winfield; 
rehab lower miter gates in auxiliary chamber at Winfield; install a tow 
haulage unit at London; repair concrete in the riverward lock chamber 
at London; and construct facility security at Winfield, Marmet, and 
London.
    Subject to the previously mentioned qualifications on capability, 
the maximum capability for Summersville Lake is $2,969,000. If the 
maximum capability were appropriated, additional funds would be used to 
construct several project features at the Battle Run area. They would 
be used to replace two restrooms, construct a campground entrance 
station and host campsites, install courtesy docks at two boat launch 
ramps, install a new sewage dump station, replace two lift stations, 
and renovate playground with ADA-compliant equipment.
    Subject to the previously mentioned qualifications on capability, 
the maximum capability for R.D. Bailey Lake is $1,607,000. If the full 
capability were appropriated, additional funds would be used to 
construct a permanent trash boom and drift and debris staging area.
                      robert c. byrd locks and dam
    Question. Please provide an estimate of the increased capability 
and the reduction in navigation delays since operation of the new locks 
commenced in January 1993. Please also include an estimate of the 
navigation savings during this same time.
    General Flowers. With the new R.C. Byrd locks, typical 15 barge 
tows can now be processed in one operation instead of two, reducing tow 
processing time from an average of about 16 hours to 1.6 hours. The 
capacity of the older, smaller Gallipolis locks was estimated to be 
63.3 million tons, while the new R.C. Byrd locks have a capacity of 
148.5 million tons.
    In the first year of operation, traffic at R.C. Byrd locks 
increased by close to 15 percent. This occurred as it became cost 
advantageous for upper Ohio utilities to source more coal from below 
the Kanawha River since the project was no longer a constraint. Since 
the new R.C. Byrd locks opened in 1993, annual traffic has grown from 
almost 45.0 million tons to around 58 million tons. Current traffic 
levels are around 55 million tons.
    In the first 10 years of operation, the new R.C. Byrd locks have 
realized total transportation savings of an estimated $302 million. The 
total project cost is $381 million, with an incremental cost over the 
without-project condition of $264 million. Using the current fiscal 
year 2003 Federal Discount Rate of 5\7/8\ percent, R.C. Byrd Locks and 
Dam project is expected to pay for itself by the end of calendar year 
2003 in reduced transit times.
                 winfield locks and dam, west virginia
    Question. Please provide an estimate of the increased capability 
and the reduction in navigation delays since operation of the new 
additional lock commenced in November 1997. Please also include an 
estimate of the navigation savings during this same time.
    General Flowers. The capacity of the old Winfield project was 
estimated at 24 million tons. The capacity of the new lock at Winfield 
is estimated at 69.5 million tons. Instead of the typical five-barge 
tow being processed in five lockage cuts, a process taking 
approximately 3 hours, the new lock can process nine-barge tows in a 
single lockage cut taking approximately 1 hour. Total commercial 
lockage cuts have reduced from over 22,000 to 3,000 annually.
    The longer processing times at the old project also created 
congestion generating average delays ranging from 3 to 12 hours per tow 
between 1987 and 1997. Delays are currently around 30 minutes. Since 
the new lock opened, transit times through Winfield have been reduced 
by approximately 4.5 to 13.5 hours per tow. With 5 years of operation, 
the new Winfield lock has realized an estimated $65.8 million in total 
transportation savings from this reduced transit time. This cumulative 
savings represent 22 percent of the incremental cost of the new lock. 
The total cost of the project was $235.9 million. Discounting future 
expected savings at the fiscal year 2003 Federal Discount rate of 5\7/
8\ percent and using the Feasibility Report's traffic forecasts, 
Winfield lock will pay for itself by the year 2018.
    proposal to use inland waterways trust fund for operations and 
          maintenance of corps inland waterways infrastructure
    Question. Does this proposal violate the agreements underlying the 
Water Resources Development Act of 1986, which affirmed continued 
Federal responsibility for inland waterways operations and maintenance 
(O&M) in return for waterways users assuming the obligation for 
financing 50 percent of future construction and major rehabilitation 
costs?
    Mr. Brownlee. The commercial interests that use the inland 
waterways system are paying a portion of the costs of capital 
improvements. However, the costs of operation and maintenance, which 
are substantial, have continued to be borne entirely by the general 
taxpayers.
    The budget proposed to begin using some of the diesel fuel receipts 
to finance a portion of the inland waterways system's operation and 
maintenance costs. The administration has recommended using $146 
million for this proposal in fiscal year 2004, which would cover about 
38 percent of the estimated operation and maintenance costs. The 
remaining costs would continue to be financed through general tax 
revenues. Under the budget proposal, those who benefit commercially 
from past Federal investments in the inland waterways navigation system 
would pay a fair share of all of the system's costs--for the 
construction and major rehabilitation of projects, as well as their 
operation and maintenance.
    Question. Given the $23 billion backlog in construction and $1 
billion backlog in O&M, is it possible that the double draw on the 
Inland Waterway Trust Fund would deplete the fund in 3 years? If so, 
how would future revenues for construction and O&M be generated? By 
increasing the current 20 cents per gallon fuel tax on waterway users? 
Would this, in turn, lead to a substantial increase in the 
transportation costs of energy (namely coal) and agricultural products?
    Mr. Brownlee. We have not proposed to change the way that Congress 
finances the construction and major rehabilitation of inland waterways 
projects. In fact, the budget includes a $3 million increase in 
spending for such work, compared to the enacted fiscal year 2003 level.
    At the current rate of collections and outlays, the Inland Waterway 
Trust Fund could run out of funds by the end of fiscal year 2006. 
Within this time frame, however, Congress and the administration should 
be able to reach agreement on the best way to allocate responsibility 
for future inland waterways operation and maintenance costs.
    Question. The unspent balance in the Trust Fund and projected fuel 
tax revenues for the foreseeable future are already committed to the 
construction or major rehabilitation of congressionally approved 
projects, such as the Marmet Lock replacement project. If the 
administration's proposal goes forth, how can the administration 
provide assurances that progress on these important construction 
projects will not be jeopardized?
    Mr. Brownlee. The administration would work with the Congress to 
focus funding on the project that will most benefit the Nation.
    Question. With inland waterways providing multiple benefits such as 
flood control, water supply, hydropower, transportation, and 
recreation, why should the transportation users be the only 
beneficiaries to pay for operation and maintenance?
    Mr. Brownlee. Transportation users would contribute only to the 
costs allocated to inland waterway navigation. Costs allocated to other 
purposes would continue to be financed in the manner appropriate to 
those purposes. Generally, non-Federal sponsors pay for water supply 
O&M costs, Federal Power Marketing Administrations would pay directly 
for hydropower O&M costs (under a separate administration's proposal), 
flood control O&M costs are paid from general revenues and the 
financing of recreation costs varies among recreation areas.
                           homeland security
    Question. Many do not view the Corps' Civil Works Program as an 
important part of national defense. What is the role of the Corps in 
the security of our Nation?
    General Flowers. The Civil Works Program is a valuable asset in 
support of the National Security Strategy in many ways. Foremost, we 
have a trained engineering workforce, with world-class expertise, 
capable of responding to a variety of situations across the spectrum of 
security threats. In fact, skills developed in managing Corps projects 
transfer to most tactical engineering-related operations. The Civil 
Works mission complements and augments the Army's war fighting 
competencies providing established relationships with the Nation's 
engineering and construction industries--a force multiplier with ``On 
the shelf'' contracts available for emergencies. Civil Works members 
are deployable. During Operations Desert Shield/Desert Storm, more 
Civil Works employees volunteered for duty in Southwest Asia than were 
needed. To date, 250 civilian members of our Civil Works Program team 
have volunteered for deployment in support of Operation Enduring 
Freedom-providing engineering, construction, and real estate support 
specialists and professionals skilled in managing large, complex 
projects, transferable to most tactical engineering-related operations. 
Civil Works also provides professionals with expertise in natural and 
cultural resources, water quality, flood plain management or toxic 
waste control, helping the Army comply with more than 70 Federal 
environmental statutes, and a breadth of experience and workload in 
dozens of specialized fields that would not otherwise be possible. 
Finally, Army Engineers experienced in Civil Works play a major role in 
infrastructure in developing nations. They help to improve economic 
conditions and strengthen democratic institutions in these nations and 
foster good will through contact between governments and armed forces.
    Question. What is the scope of Corps assets that are considered 
highly vulnerable to future terrorist attacks?
    General Flowers. At the present time the U.S. Army Corps of 
Engineers has identified 306 facilities that warrant security upgrades. 
These include USACE dams, locks, and a other facilities that provide 
flood control, water supply, navigation, and hydropower to the Nation.
    Question. What would you describe as the major terrorism threats to 
our Nation's civil works projects?
    General Flowers. The vulnerability of water resources 
infrastructure facilities to potential acts of sabotage has always been 
a concern throughout history. All of our projects have some measure of 
protection in place based on traditional risk assessments. We would be 
happy to meet with you to discuss the threat in greater detail.
    Question. Could you provide an example of the kind of risk that you 
are talking about?
    General Flowers. Again, we would be happy to discuss these risks 
with you personally in greater detail.
    Question. Along the Kanawha River in West Virginia, there are three 
busy locks and dam projects--London, Marmet, and Winfield--through 
which millions of tons of coal and highly volatile chemicals traverse 
every year. What extra precautionary measures is the Corps taking to 
safeguard barges carrying highly explosive agents, or hazardous or 
toxic agents?
    General Flowers. This mission is being pursued by the U.S. Coast 
Guard under the new Homeland Security Department. However, every effort 
is made to increase the detection, assessment, and response to such an 
act of terrorism on a vessel should it occur at, or within, a lock and 
dam facility. Efforts by the Corps risk assessment teams developed 
solutions to mitigate these threats and will be implemented based on 
priorities that reflect our assessment of the risk.
    Question. Overall, what efforts are you undertaking to minimize the 
risk at Corps structures across the Nation?
    General Flowers. Following 9/11 we completed 306 security reviews 
and assessments of our inventory of locks, dams, hydropower projects 
and other facilities to determine vulnerability to terrorist threat and 
potential consequences of such an attack. We improved our security 
engineering capability, identified proposed security upgrades, and 
prioritized this work. Utilizing supplemental appropriations provided 
in fiscal year 2002 (Public Law 107-117, $139 million), we have 
initiated the design and implementation of security improvements on 85 
of the 306 critical facilities. We have also initiated security 
improvements at administrative facilities to reduce risks to our 
employees.
    Question. Does the President's fiscal year 2004 budget provide 
adequate resources for the Corps to address terrorism in the future?
    General Flowers. Senator, the budget provides sufficient resources 
to address the priority fiscal year 2004 needs. One hundred four 
million dollars of the O&M funds provided in this budget are targeted 
for facility security. We will direct funding to those priority 
projects at which there is potential for catastrophic consequences 
resulting in loss of lives downstream or economic consequences of 
greater than $200 million and continue security improvements at our 
administrative facilities. Vulnerability assessments produce a 
recommended system of improvements targeted to reduce the risk 
associated with potential threats to the facility.
    Question. What funds are needed to adequately address the risk to 
Civil Works projects?
    General Flowers. The budget provides sufficient resources to 
address the priority fiscal year 2004 needs. Subject to the usual 
aforementioned qualifications regarding capabilities, the maximum 
capability for guards, maintenance, assessments and other activities to 
fully address risk associated with USACE facility security in fiscal 
year 2004 is $227 million.
                                 ______
                                 
            Question Submitted by Senator Ernest F. Hollings
    Question. The Water Resources Development Act of 1999 and Section 
348(k) of the Water Resources Development Act of 2000 directed the 
Secretary of the Army to convey all right and title 10,165 acres of 
federally owned land to the State of South Carolina along with a lump 
sum payment of $4.85 million in lieu of annual mitigation payments. The 
Savannah District conducted a preliminary life cycle financial analysis 
in an attempt to reduce the lump sum payment to the State of South 
Carolina. This analysis was not required and now the Army Corps of 
Engineers (COE) wants the State of South Carolina to pay for this 
unnecessary analysis. Although Congress' intent was clear, the COE's 
effort to transfer these lands to South Carolina is moving at a snail's 
pace and COE has not asked Congress for the appropriation. The COE 
agreed with this language in the two Water Resources and Development 
Acts and should transfer the lands and the lump sum immediately with as 
little red tape as possible. The attempt to delay the transfer by 
insisting on reimbursement for an unauthorized and unneeded economic 
evaluation is inappropriate. Why can't the COE move forward immediately 
with transferring these lands to the State of South Carolina?
    General Flowers. The authorization required that the Secretary and 
the State of South Carolina enter into a contract for the State to 
manage the conveyed parcels of land for fish and wildlife mitigation 
purposes in perpetuity. Preparation of a preliminary life cycle 
financial analysis to determine the appropriate lump sum payment amount 
was consistent with the Water Resources Development Act of 1999 
requirement. With enactment of the Water Resources Development Act of 
2000 the analysis was no longer required and all activity on the 
analysis was stopped. The part of the study that was done was 
appropriately part of the project so it is legitimately cost-shared.
    A draft Memorandum of Agreement detailing the terms and conditions 
associated with the lands transfer and management as authorized by 
paragraph (i)(3) of Section 348(k) has been provided to the State of 
South Carolina for review and approval. Upon the approval of an 
agreement satisfactory to both the Secretary and the State of South 
Carolina and subject to the availability of funds, the lands and funds 
will be conveyed to the State of South Carolina. At the present time, 
sufficient funds have not been appropriated for this purpose.
                                 ______
                                 
             Questions Submitted by Senator Byron L. Dorgan
                       devils lake, north dakota
    Question. I am pleased that the Corps has agreed that building an 
outlet at Devils Lake is its preferred alternative, even though the 
revised cost estimate presents this subcommittee with some 
difficulties. Are you confident that water quality standards have been 
addressed, within given cost constraints?
    General Flowers. Under the option that the Cops report identified 
as the preferred alternative, water quality impacts addressed 
consistent with a balancing of effectiveness and cost. Some refinements 
of the operating plan may be made through coordination with an 
operation task force to reduce downstream water quality impacts. Beyond 
that, further reducing the water quality impacts and exceedances of 
water quality standards on the Red River would either require more 
restrictive sulfate constraints, thereby limiting the discharge rate 
and significantly reducing an outlet's effectiveness, or mechanically 
treating the water, which would be very costly.
    Question. Are there areas where the costs might be reduced?
    General Flowers. If Congress funds the project, the Corps of 
Engineers will look for every opportunity to reduce costs during 
detailed design and implementation. Features currently proposed for the 
project are considered essential; thus cost reduction by deletion of 
project features is not viewed as an acceptable option. As more 
detailed design is accomplished on features that have only been 
developed to a conceptual level, such as the sand filter, the Sheyenne 
River cutoffs and control structures, and other project features, a 
reduction in costs could occur, although there is also a possibility of 
an increase.
    Question. With respect to the outlet at Devils Lake, do you believe 
EPA will ``sign off'' on this from a water quality perspective?
    General Flowers. The Corps has applied to the North Dakota 
Department of Health for Section 401 water quality certification in 
accordance with the Clean Water Act for the construction and operation 
of the outlet. In addition, the North Dakota State Water Commission has 
applied to the North Dakota Department of Health for a Section 402 
National Pollution Elimination System permit for the operation of the 
outlet. The certification and permit processes are still ongoing. The 
EPA has indicated that North Dakota would coordinate with the State of 
Minnesota and EPA expects that no North Dakota authorization would be 
issued if it would cause a violation of North Dakota or Minnesota water 
quality standards. EPA has been noncommittal as to what its reaction 
would be should it be asked to intervene through a potential appeal by 
the State of Minnesota. EPA has indicated that it has concerns but that 
at least we have been moving in the right direction by trying to 
address water quality impacts more fully.
    Question. Do you think the administration will now commit to 
supporting and funding this project given that the Corps' 
recommendation is to build an outlet?
    General Flowers. The administration did not fund the project in 
fiscal year 2004. My recommendation on this project will follow public 
review of the final environmental impact statement to be filed with the 
Environmental Protection Agency in mid April 2003.
    Question. Do you think the Corps could cover the portion of the 
costs that involve Tribal lands, rather than having the State cost-
share this portion of the project?
    General Flowers. The Water Resources Development Act of 1986, as 
amended, requires cost sharing of the project as 65 percent Federal and 
35 percent non-Federal, with the non-Federal responsibilities to 
include provision of lands, easements and rights-of-way required for 
the project.
         grand forks, north dakota--east grand forks, minnesota
    Question. The Grand Forks Flood Control project was scheduled for 
substantial completion in December of 2004. This is vitally important 
because FEMA is looking to remap the community and without this 
project, the 100 year floodplain would include 90 percent of the two 
cities (GF and East GF). This would force residents to pay between $10-
$15 million annually in additional flood insurance.
    Last year, this subcommittee increased the budget recommendation by 
$5 million which helps the process along, but much more funding will be 
needed next year for substantial completion by the 2004 date. Can you 
tell me if the budget request of $23 million for this project in fiscal 
year 2004 would allow for substantial completion by December 2004, as 
the Corps promised the Grand Forks community?
    General Flowers. No, sir, the fiscal year 2004 budget amount would 
not allow for substantial completion by December 2004.
                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

STATEMENTS OF:
        BENNETT W. RALEY, ASSISTANT SECRETARY FOR WATER AND SCIENCE
        JOHN W. KEYS, III, COMMISSIONER, BUREAU OF RECLAMATION
ACCOMPANIED BY:
        J. RONALD JOHNSTON, PROGRAM DIRECTOR, CUP COMPLETION ACT OFFICE
        JOHN TREZISE, DIRECTOR OF BUDGET, OFFICE OF BUDGET, DEPARTMENT 
            OF THE INTERIOR

    Senator Cochran. We are now going to hear from our second 
panel. It is a panel which includes Assistant Secretary for 
Water and Science, Bennett W. Raley; Commissioner John W. Keys, 
III, of the Bureau of Reclamation; and Officer Ronald Johnston, 
who is program director.
    If you will come forward and take your seats at the witness 
table, we will proceed.
    The hearing will come to order.
    Those who are leaving the room will please do so 
expeditiously so we may proceed with our second panel.
    Secretary Raley, we appreciate your presence. You're here 
representing the Bureau of Reclamation. We ask you to please 
proceed.

                   SUMMARY STATEMENT OF BENNETT RALEY

    Mr. Raley. Thank you, Mr. Chairman, members of the 
committee. Yes, I am here on behalf of Secretary Norton to 
present the President's budget request and have with me today 
John Keys, Commissioner of Reclamation, Ron Johnston, Program 
Director of the Central Utah Project and John Trezise, the 
Department's Budget Director.
    Mr. Chairman, Interior takes great pride in fulfilling the 
multiple missions that we have. We have a mission to protect 
and manage the Nation's natural resources and cultural 
heritage, provide scientific information about those resources 
and to honor our special responsibilities to the American 
Indians, Alaska Natives and affiliated Island Communities.
    Our responsibilities lie at the confluence of people, land 
and water and touch the lives of individuals across the Nation. 
How well we fulfill our mission influences whether there will 
be water for people, water for farmers, and water for the 
environment, in vast areas of this Nation.
    We look forward to working with the Corps of Engineers as 
partners in the Federal role in managing resources. But if I 
could, to perhaps save Senator Craig a question, I want to 
emphasize that from a Department of the Interior perspective 
with respect to the 17 Reclamation States of the West, we 
recognize a national water policy and have, since 1866, that 
water policy being one of federalism. And everything that we do 
with respect to water management in the west starts with that 
foundation of federalism and recognizing the appropriate role 
of States in managing the water resources that they are 
entrusted with.
    Senator Craig. Thank you, Mr. Secretary. That is why you 
are a secretary in this administration. We appreciate that 
attitude.
    Mr. Raley. Well, thank you, sir.
    We also know that the charge of the Department and how well 
we fulfill that will have an impact on our children's ability 
to use and enjoy the resources and the incredible vistas, the 
wonderful places in this Nation, to live and work in healthy 
communities, to have good jobs and good environments and a 
future. We have a small part in that and we are very proud of 
that. But we also recognize that our part of that has to be 
within national priorities.
    And so our budget, Mr. Chairman, members of the committee, 
has tried to focus on fulfilling core missions--that is c-o-r-
e, not C-o-r-p-s; we have no wish to take on more than we can 
handle--to first take care of what we have in terms of 
maintaining and operating the investment of the last century, 
to meet the security needs with respect to some very important 
facilities that are under the jurisdiction of the Department, 
and to meet the requirements of the Endangered Species Act and 
other very important national policy objectives.
    Our budget was framed with that approach in mind. That was 
the budget for the entire department, because we recognize that 
we are an important part, the Bureau, of that broader mission 
and that the Department of the Interior is a part of the 
national priorities.
    For the Department, the 2004 budget request is $10.7 
billion, the largest Presidential request in the Department's 
history, a 25 percent increase over the 2000 budget. With 
respect to the programs under the jurisdiction of this 
subcommittee, the request is for $916.2 million. This includes 
$878 million for the Bureau of Reclamation and $38.2 million 
for the Central Utah Project Completion Act activities.
    Others, members of the panel and of this committee, have 
already described the many ways that the Interior mission 
touches people's lives. And I will not go into the details of 
how many people we serve, how many acres are irrigated with 
water from reclamation projects, or how much power is provided 
to the citizens of this Nation. I would or do wish to highlight 
a couple of areas within the budget.

                            WATER INITIATIVE

    First of all, our budget request includes $11 million for a 
Bureau of Reclamation Water Initiative that will focus on 
meeting the core mission of today and the challenges of the 
future in an even more efficient manner. We want to build on 
lessons that we have learned in past decades and do a better 
job with the public's money.
    Let me be very specific about what is intended here. We 
know that there can be great savings in water with the 
implementation of some fairly simple technologies, technologies 
that are common in some places and not common in others, 
technologies like check structures in canals that allow all 
needs to be met and to stretch existing reservoir supplies even 
further. So, in times of drought, as much of the West is in 
today, we can farm and have water for people further into the 
drought than we otherwise would without these technologies. 
These are technologies like computerized SCADA, the supervisory 
control and data acquisition systems, to operate canals in a 
more efficient way.
    These, members of the committee, are steps that will have 
very real benefits to water users in the basins where they can 
be implemented, but they have historically not been as 
attractive for investment as other alternatives. And we wish to 
get back to the basics. We wish to bring our investments over 
the last century up to par so that we can meet the challenges 
of the next century.

                       SPECIFIC PROJECT REQUESTS

    Our budget request also includes nearly $21 million for the 
challenges we face in the Klamath Basin, for meeting water 
supplies for farmers, for tribal trust needs, and for the 
environment. It includes $19 million for the Columbia/Snake 
salmon recovery; $17.4 for the Middle Rio Grande Project; and 
$15 million in an account established exclusively for 
implementation of the preferred program alternative for the 
CALFED Bay-Delta Program that is so important to the Central 
Valley and, in fact, the entire State of California.
    The budget request includes $58 million to continue 
construction of the Animas La Plata Project. This is the level 
of funding that is needed for the Department to be able to meet 
the 7-year construction schedule contained in the Colorado Ute 
Settlement Act Amendment of 2000.
    Lastly, let me explain if I could, the budget request for 
rural water systems and Title XVI. Our budget includes $32 
million for rural water projects. This is significantly reduced 
from the level Congress recently enacted for 2003. This budget 
reflects the findings of the OMB Program Assessment Rating Tool 
(PART) that OMB and Interior jointly proceeded with. We believe 
that there are gains in efficiency that can be achieved in 
meeting the needs of rural communities.
    Mr. Chairman, I grew up 60 miles from the nearest 
stoplight, hospital, movie theater. The water that I drank, 
when you took it out of the tap, set it on the table, the 
flakes immediately started precipitating out. My guess is that 
that water would not meet today's safe drinking water 
standards, which may for some explain my behavior.
    We understand the importance of rural drinking water, but 
we also know that those needs are enormous throughout the West. 
And it is incumbent upon us to meet those needs in absolutely 
the most efficient manner possible. Our budget request this 
year is a reflection of our commitment to do just that. With 
respect to Title XVI, which is commonly known as the Waste 
Water Recycling or Desalinization Programs that have been 
implemented since 1992, when Title XVI was added, our funding 
levels in part are based on the completion of the OMB PART 
assessment tool that was also used for the rural drinking water 
systems. The assessment tool that the Federal investment in the 
critically important areas of waste water recycling and 
desalinization technology can be more efficiently targeted. Our 
belief is that the first priority for the Federal investment 
should be to invest in the technology advances that will drive 
the per-unit cost down to the lowest level possible so as to 
make water from these sources competitive with alternatives as 
quickly as possible.

                              SUMNER PECK

    Finally, I would like to report on a matter that is of 
direct importance to Senator Feinstein, if you would allow me. 
Our budget for 2003, in the budget amendments submitted, 
provided for funds to pay a judgment under a consent judgment 
in what is known as the Sumner Peck litigation in the Central 
Valley in California. I am authorized today to state that the 
Department of Justice has determined that the Judgment Fund 
will be available for payment of the amounts due under that 
consent judgment in 2003. The Department of Justice has not 
made a determination regarding the availability of funds from 
the Judgment Fund for future years under this consent decree, 
but I know that this is a matter of great importance to Senator 
Feinstein and all of her colleagues from California. We wanted 
to take the opportunity to inform this committee of the 
resolution of this issue with respect to 2003, but also to make 
it very clear that the issue has not been resolved for future 
years.

                           PREPARED STATEMENT

    Mr. Chairman, in light of the amount of time that you 
probably have saved for questions for the Commissioner and the 
budget officer, I would ask that my entire remarks be submitted 
in the statement, and I will remain available for questions.
    [The statement follows:]
                 Prepared Statement of Bennett W. Raley
    I am pleased to be here today before the Subcommittee on Energy and 
Water Development to discuss with you the fiscal year 2004 budget for 
the Department of the Interior. I appreciate the opportunity to 
highlight a number of important initiatives and to answer questions 
that you might have.
    On behalf of Secretary Norton, and as an introduction to our 2004 
budget request, I'd like to offer some observations about the 
Department's mission. We take a great deal of pride in our mission to:
  --Protect and manage the Nation's natural resources and cultural 
        heritage;
  --Provide scientific information about those resources; and
  --Honor our special responsibilities to American Indians, Alaska 
        Natives and affiliated Island Communities.
    Our responsibilities touch the lives of each individual across the 
Nation. How well we fulfill our mission influences:
  --Whether farmers will have water and people can turn on the tap;
  --Whether our children will enjoy America's grand vistas, places, and 
        history;
  --Whether we can hike, bird watch, canoe, or hunt and fish in the 
        great American outdoors; and
  --Whether our landscapes are healthy and our communities are 
        thriving.
                      departmental budget overview
    Our 2004 $10.7 billion budget request provides the single clearest 
statement of how we plan to honor these commitments in the upcoming 
year. It lays the foundation for us to build a legacy of healthy lands 
and thriving communities, including:
  --Resource Protection.--Reflecting the Department's multiple 
        missions, the budget proposes $2.6 billion to fund programs 
        that improve the health of landscapes, sustain biological 
        communities, and protect cultural resources.
  --Serving Communities.--The budget proposal includes $5.0 billion to 
        serve communities through fire protection, generation of 
        scientific information, education investments for American 
        Indians, and through activities to fulfill responsibilities 
        toward American Indians, Alaskan natives, and the Nation's 
        affiliated island communities.
  --Resource Use.--Interior lands include many working landscapes where 
        ranchers, energy partners, and other entrepreneurs help 
        maintain thriving American communities and a dynamic economy. 
        The budget includes $1.5 billion to provide access for these 
        important uses.
  --Recreation.--$1.4 billion in fiscal year 2004 budget investments 
        will ensure recreational opportunities for all Americans in the 
        network of public lands, parks and refuges that the Department 
        administers.
    In total, the 2004 budget is the largest presidential request in 
the Department's history. This budget proposal is about 25 percent 
higher than the 2000 appropriations level of $8.6 billion, and 
represents an increase of $338.7 million, or 3.3 percent, over the 2003 
enacted level. Permanent funding that becomes available as a result of 
existing legislation without further action by the Congress will 
provide an additional $3.0 billion, for a total 2004 Interior budget of 
$13.7 billion. The Department anticipates that it will collect $7.8 
billion in receipts in 2004, equivalent to 73 percent of Interior's 
current appropriations request.
    The 2004 request includes $9.8 billion for programs funded in the 
Interior and Related Agencies Appropriations Act, an increase of $369.8 
million or 3.9 percent over the 2003 enacted level.
    The budget includes $916.2 million for programs funded in the 
Energy and Water Development Appropriations Act, a decrease of $31.1 
million, or 3.3 percent below the 2003 enacted level.
                         bureau of reclamation
    The Bureau of Reclamation is the largest supplier and manager of 
water in the 17 western States. Its facilities include 348 reservoirs 
and 456 dams with the capacity to store 245 million acre-feet of water. 
These facilities deliver water to one of every five western farmers for 
about 10 million acres of irrigated land and provide water to over 31 
million people for municipal, rural, and industrial uses. Reclamation 
is also the Nation's second largest producer of hydroelectric power, 
generating 42 billion kilowatt-hours of energy each year from 58 power 
plants. In addition, Reclamation's facilities provide substantial flood 
control, recreation, and fish and wildlife benefits.
    Since its establishment in 1902, water supply facilities developed 
by Reclamation have contributed to sustained economic growth and an 
enhanced quality of life in the western States. Lands and communities 
served by the bureau's projects have been developed to meet 
agricultural, tribal, urban, and industrial needs. In more recent 
years, the public has demanded better environmental protections and 
more recreational opportunities while municipal and industrial 
development have required more high quality water. Continuing 
population growth, especially in urban areas, will inevitably lead to 
even greater competition for the West's limited water resources. These 
increased demands are further compounded during periods of drought.
    The Bureau of Reclamation request for current appropriations is 
$878.0 million, a net increase of $23.1 million above the 2003 request, 
as amended. The 2004 request is $33.3 million below the 2003 enacted 
level.
    The 2004 request for current appropriations is offset by 
discretionary receipts in the Central Valley Project Restoration Fund, 
resulting in a net request of $847.2 million. The request for permanent 
appropriations totals $87.5 million.
    The request for the Water and Related Resources account is $771.2 
million. The account total includes an undistributed reduction of $40.0 
million in anticipation of delays in construction schedules and other 
planned activities.
    The budget provides a total of $348.3 million for facility 
operations, maintenance, and rehabilitation, an increase of $8.3 
million over the 2003 request, as amended. The 2004 request for 
facilities operations, maintenance, and rehabilitation is a decrease of 
$3.4 million from the 2003 enacted level. The request includes $71.0 
million for the Dam Safety program to protect the downstream public by 
ensuring the safety and reliability of Reclamation dams.
    Water Initiative.--The 2004 budget for Reclamation proposes ways to 
manage water carefully and creatively for people, land, and the 
environment. The poet Thomas Hornsby Ferris, wrote about the West: 
``Here is a land where life is written in water.''
    What was true 100 years ago remains true today. Managing water 
wisely lies at the heart of maintaining healthy lands and thriving 
communities. The budget request includes $11.0 million to launch a 
Bureau of Reclamation Water Initiative that uses collaboration, 
conservation, and innovation to make sure every drop of water counts. 
This initiative is expected to benefit communities currently struggling 
with increased water demands, drought, and compliance with the 
Endangered Species Act. The funding increase will be used to: develop 
pilot projects that demonstrate how to prevent crises-level water 
conflicts in the West; expand the use of science to improve 
desalination technology, promote adaptive management of watersheds, and 
fund peer review of Endangered Species Act consultations; design water 
management programs that address environmental needs on a basin-scale; 
and train Reclamation employees to help them better carry out the ESA 
as it relates to Federal actions.
    The budget also includes $58.0 million for the Animas-La Plata 
Project in Colorado, specifically for the Colorado Ute Settlement Act 
Amendment of 2000 requirements outlined in the final record of 
decision. The Department is committed to completion of this project and 
requests an increase of $23.2 million over the 2003 enacted level.
    The Reclamation budget puts increased emphasis on resolving water 
management and delivery issues that involve endangered species in 
several western States. The Klamath Project is funded at $20.8 million, 
Columbia/Snake salmon recovery is funded at $19.0 million, and the 
Middle Rio Grande Project is funded at $17.4 million.
    The request provides $34.1 million for the Central Arizona Project. 
The request includes $170.1 million for operating, managing and 
improving California's Central Valley Project, including an increase of 
$13.1 million from 2003 enacted level for the CVP Replacements, 
Additions, and Extraordinary Maintenance program.
    Collectively, the request includes $32.3 million for rural water 
projects--Garrison Diversion Unit, Mni Wiconi, Mid-Dakota--which is a 
67 percent reduction from the 2003 enacted level. The findings in the 
OMB Program Assessment Rating Tool process indicated that a new 
approach is necessary for rural water delivery programs. The 
Administration intends to submit legislation this spring, establishing 
a Reclamation Rural Water Program with adequate controls and 
guidelines.
    The budget includes $15.0 million in the account established 
exclusively for implementation of the CALFED Bay-Delta Program. Funds 
provided will be used for ongoing activities within existing 
authorities.
                  central utah project completion act
    The Central Utah Project Completion Act provided for completion of 
the Central Utah Project by the Central Utah Water Conservancy 
District; authorized funding for fish, wildlife, and recreation 
mitigation and conservation; established the Utah Reclamation 
Mitigation and Conservation Commission; and provided for the Ute Indian 
Rights Settlement. A program office located in Provo, Utah provides 
liaison with the District, Mitigation Commission, and the Ute Indian 
Tribe and otherwise assists in carrying out responsibilities of the 
Secretary. Under the Act, the responsibilities of the Secretary cannot 
be delegated to the Bureau of Reclamation.
    The 2004 request provides $38.2 million, an increase of $2.2 
million over the 2003 enacted level. The budget refocuses resources to 
address redesign and realignment of the Diamond Fork tunnel due to the 
interception with water that is highly contaminated with hydrogen 
sulfide. The 2004 request includes: $26.4 million for planning and 
construction activities administered by the District; $9.4 million for 
mitigation and conservation activities funded through the Mitigation 
Commission; and $2.4 million for activities administered by the program 
office, which includes $629,000 for mitigation and conservation 
activities funded through the program office.
                             trust programs
    Over one-half of our $369.8 million increase for 2004 will fund 
trust reform initiatives. While the overall budget request is 
approximately 3.9 percent over the fiscal year 2003 request, our fiscal 
year 2004 Indian trust budget request is almost 50 percent higher than 
what was included in the 2003 appropriations act.
    Fulfilling our Trust responsibilities remains one of the 
Department's greatest challenges. The Department has responsibility for 
the management of 100,000 leases for individual Indians and Tribes on a 
land trust that encompasses approximately 56 million acres. Leasing, 
use permits, sale revenues, and interest of approximately $226 million 
per year are collected for approximately 230,000 individual Indian 
money accounts, and about $530 million per year are collected for 
approximately 1,400 tribal accounts per year. In addition, the trust 
manages approximately $2.8 billion in tribal funds and $400 million in 
individual Indian funds.
    Interior faces many challenges in reforming the management of its 
Indian trust responsibilities. First, the Department has not been well 
structured to focus on its trust duties. Second, fractionated interests 
in individual Indian allotted land continue to expand exponentially 
with each new generation. Today, there are approximately 4 million 
owner interests in the 10 million acres of individually owned trust 
lands. These 4 million interests could expand to 10 million interests 
by the 2030 unless an aggressive approach to fractionation is taken. 
There are now single pieces of property with ownership interests that 
are less than 0.000002 percent of the whole interest.
    Third, there are 230,000 open individual Indian money accounts, the 
majority of which have balances under $100 and annual transactions of 
less than $1,000. Interior maintains thousands of accounts that contain 
less than one dollar, and has a responsibility to provide an accounting 
to all account holders. Unlike most private trusts, the Federal 
Government bears the entire cost of administering the Indian trust. As 
a result, the usual incentives found in the commercial sector for 
reducing the number of accounts do not apply to the Indian trust.
    An increase of $114.1 million for the Office of Historical Trust 
accounting will support the Department's plan to conduct a historical 
accounting for individual Indian money accounts and to account for 
funds in Tribal accounts. On January 6, 2003, the Department presented 
a plan to the District Court in Cobell v. Norton for the historical 
accounting for about 260,000 IIM accounts. The work described in that 
Plan is expected to take five years to complete and is preliminarily 
estimated to cost approximately $335 million. The budget includes 
$130.0 million for these historical accounting activities. Funds also 
will be used to provide for historical accounting activities related to 
tribal accounts.
    The 2004 budget proposes $21.0 million for Indian land 
consolidation, an increase of $13.0 million, to expand pilot efforts to 
reduce the fractionation of individual land ownership interests into a 
nation-wide program. During 2003, we will establish a national program 
office, standardize business practices, and develop a strategic plan to 
guide expansion to more tribal reservations.
    Interior is reorganizing trust functions in BIA and OST. The new 
organization was developed after detailed analysis of the prior 
organization and a year-long consultation process with tribal leaders. 
In one of the most extensive consultation efforts ever undertaken by 
the senior management level at the Department on any issue relating to 
Indian Country, over 45 meetings with tribal leaders provided detailed 
findings and recommendations. The new organization reflects a synthesis 
of the views heard during the consultation process. It will meet 
fiduciary trust responsibilities, be more accountable at every level, 
and operate with people trained in the principles of trust management. 
The 2004 budget provides an increase of $15.0 million to support the 
new organization, which together with base funding available in BIA and 
OST will provide resources needed for the new organization in 2004.
    The proposed $183.8 million increase for trust management reforms 
includes funding to help rebuild Bureau of Indian Affairs information 
technology infrastructure to support trust and non-trust programs. The 
BIA's information infrastructure and security use outmoded hardware and 
software that do not meet lifecycle management and systems architecture 
principles, and do not comply with the security requirements of OMB 
Circular A-130 and the Government Information Security Results Act. The 
Department requests IT funding for the significant new investments 
needed to address these challenges. The 2004 budget includes increases 
of $29.8 million for a ground-up rebuilding of the BIA IT 
infrastructure to support trust, as well as non-trust programs, and 
$2.5 million for Interior-wide IT security. The proposed rebuilding 
will fit within the enterprise architecture and includes full business 
cases for proposed investments.
    The 2004 budget also proposes an increase of $4.5 million to 
accelerate a new strategy to administer, manage, search, retrieve, and 
store trust records. Reform efforts to date have improved records 
collection and security. However, recent Interior reviews have resulted 
in a reassessment of the resource requirements needed to establish 
proper records retention schedules, establish and implement record 
keeping requirements, safeguard records, implement and maintain 
training programs, and meet records-retrieval needs in an effective and 
cost-efficient way.
                  cooperative conservation initiative
    The 2004 budget lays the foundation for a legacy of healthy lands, 
presenting a blueprint for fulfilling the President's vision of a new 
environmentalism of citizen stewards and cooperative conservation. 
Building partnerships lies at the heart of this effort. Last year's 
budget proposed a Cooperative Conservation Initiative. This year, our 
budget again includes a Cooperative Conservation Initiative, structured 
around bureau Challenge Cost Share programs and other existing 
cooperative conservation grant programs.
    The Cooperative Conservation Initiative, funded at $113.2 million, 
will empower citizen stewards to conserve and protect natural 
resources, while also achieving important community and economic goals. 
The Initiative builds on existing conservation partnership programs and 
will provide new and expanded opportunities for landowners, land 
managers, and others to participate in projects that foster innovation 
and create incentives for stewardship. Our budget also provides funds 
for a public lands volunteers program.
    The 2004 CCI request builds upon Interior's long history of working 
collaboratively with others. It builds on existing conservation 
partnership programs, including the challenge cost share programs of 
the Bureau of Land Management, Fish and Wildlife Service, and National 
Park Service, as well as FWS's Partners for Fish and Wildlife program, 
Coastal program and Migratory Bird Joint Venture program. This 
initiative also funds a program of volunteers to increase public 
awareness of, and appreciation for, natural and cultural resource 
protection.
    The CCI request includes a $9.3 million increase for the Partners 
for Fish and Wildlife program, the largest increase ever provided to 
this program. The Fish and Wildlife Service will partner with 2,500 
additional landowners on the program's waiting list. These new 
partnerships will restore an additional 19,298 acres of wetlands; 
83,601 acres of native grasslands, forest and other uplands; and 241 
miles of riparian and in-stream habitat over 2003 levels.
                          conservation grants
    The Private Stewardship grants and the Landowner Incentive Program 
recognize continuing opportunities for conservation of endangered and 
threatened species through partnerships with private landowners. The 
budget request includes $50.0 million for Private Stewardship grants 
and the Landowner Incentive program. Interest in the State portion of 
the program is high, with over 80 grant requests totaling $61.0 million 
for the program's first year.
    The 2004 budget request includes a comprehensive, partnership 
approach to meeting the President's commitment for fully funding the 
Land and Water Conservation Fund. The 2004 LWCF program includes $662.4 
million for the Department. It emphasizes conservation partnerships 
with States, Tribes, local communities, and private citizens, including 
a strong State grant program, and reduced Federal land acquisition. 
This proposal recognizes the costs of adding to the significant land 
holdings that are already managed by the Department and our commitment 
to take better care of these lands. It also recognizes the value and 
cost-effectiveness of partnerships. We can accomplish our conservation 
goals by conserving endangered and at risk species through conservation 
easements, working with private landowners to enhance habitat for 
endangered and at risk species, and other innovative partnership 
approaches.
                   conserving wildlife and fisheries
    March 14, 2003 marks a milestone in the history of wildlife 
conservation in America--the centennial anniversary of the national 
wildlife refuge system. Reflecting the importance of this event and the 
record of conservation established through this unique system of lands 
and resources, the 2004 budget builds on last year's historic $48.4 
million budget increase for the national wildlife refuge system by 
requesting a total of $402.0 million for refuge operations and 
maintenance, an increase of $33.6 million over 2003 appropriation 
levels. The total budget request for the Fish and Wildlife Service is 
$1.3 billion.
    The Fish and Wildlife Service fisheries program has played a vital 
role in conserving and managing fish and other aquatic resources. The 
2004 budget enhances the Federal contribution to aquatic resource 
conservation partnerships, by providing $103.6 million for the FWS 
fisheries program. The request includes an $7.4 million increase for 
operation and maintenance of the national fish hatchery system's 
hatcheries, fish health centers, and fish technology centers. Also 
included is a $1.0 million increase to combat aquatic nuisance species, 
part of the larger, coordinated interdepartmental effort discussed 
below.
                           other partnerships
    As Stated earlier, the 2004 budget is based on a vision of 
partnerships and leaving a legacy of healthy lands and thriving 
communities resulting from efforts to work together across landscapes 
and across communities. The 2004 budget sets forth the tools through 
which these partnerships can flourish and leave a legacy of healthy 
lands and thriving communities.
    The Department's parks, refuges, and public lands host nearly 500 
million visitors a year and provide access for economic uses, 
activities that fuel the economic engines for communities adjacent to 
our Federal lands. Recognizing that the Department's decisions can 
greatly impact these gateway communities, the Department is working in 
partnership with the people who live on the private lands that border 
these areas and developing collaborative approaches to address local 
issues.
    Everglades.--The Everglades restoration effort also affirms the 
power of partnerships. As stewards of about one-half of the remaining 
Everglades ecosystem, the Interior Department works with a broad team 
of Federal, State and local partners. In 2004, the President's budget 
includes $111.8 million for Interior Everglades activities, an increase 
of $27.8 million above 2003 enacted appropriations. The request 
includes $40.0 million to protect the Big Cypress National Preserve by 
acquiring the Collier family's mineral right holdings.
    Exemplifying the partnership approach to this restoration effort, 
the Department is building stronger coalitions to implement the 
restoration program, including:
  --Forming an advisory committee for public input to land managers in 
        South Florida on a wide range of issues;
  --Providing scientific expertise to the State and the U.S. Army Corps 
        of Engineers to meet the objectives of the Comprehensive 
        Everglades Restoration Plan; and
  --Taking steps to ensure that appropriate quantities of water are 
        distributed at the right times and in the right places to 
        restore the unique Everglades ecosystem.
    Invasive Species.--The Department is participating in an 
interagency performance budget to promote invasive species management 
that is being coordinated by the National Invasive Species Council. The 
2004 budget proposes $57.5 million for the Department's portion of this 
interagency effort.
    At this funding level, Interior will participate in the control and 
management of tamarisk and giant salvinia in the southwest; conduct 
ballast water research; control and eradicate nutria in the Chesapeake 
Bay and in Louisiana; plan early detection and rapid response to 
eradicate outbreaks of sudden oak death in eastern hardwood forests of 
the central Appalachian Mountains; and develop a marine invasive 
species early detection warning system.
    Abandoned Mine Reclamation and Clean Streams.--Through partnerships 
the Office of Surface Mining is restoring streams impacted by coal 
mining. Its Clean Streams program involves State and local groups to 
enhance miles of riparian areas. The President's budget request 
includes $281.2 million for State and Federal programs to protect the 
environment during coal mining, assure prompt reclamation after mining, 
and clean up abandoned mine lands. The request will enable OSM to 
continue directly administering Federal regulatory and reclamation 
programs in States that do not operate their own surface mining 
programs as well as on Federal and Indian lands, and to reclaim 6,900 
acres of disturbed land and other hazards that threaten human health 
and welfare and environmental quality.
    Payment of Lieu of Taxes.--The President's proposal calls for 
$200.0 million for Payments in Lieu of Taxes, to compensate States for 
Federal lands that cannot be taxed by local governments. The 2004 
budget proposes to move the program from the Bureau of Land Management 
to the Departmental Management account to reflect the breadth of this 
program. The lands on which the payments are made are administered by 
the NPS, FWS, and USDA Forest Service, as well as by the Bureau of Land 
Management.
                   wildland fire and healthy forests
    Building a legacy of healthy lands and thriving communities means 
applying a healing hand to the landscape. The Department is advancing 
the President's Healthy Forests Initiative to reduce decades-long 
build-ups of underbrush and unnaturally dense forests.
    The budget proposes $698.7 million for wildfire prevention and 
suppression and Healthy Forest initiatives in fiscal year 2004. This is 
a $48.5 million, or 7.5 percent increase over last year's budget 
proposal. The request includes continued funding for a robust fuels 
treatment program at $186.2 million, 400 percent above spending in 
2000. At this funding level, the Department will treat 307,000 high 
priority acres in the wildland-urban interface and an additional 
768,000 acres that are not in the wildland-urban interface.
    The Department is also taking a number of steps to improve the 
productivity and performance of the fuels program that will help the 
Department's firefighting bureaus take maximum advantage of the 
opportunity for fuels treatment projects at the beginning of the fiscal 
year when weather and workload conditions for fuels treatments are 
optimal. The Department is accelerating project planning and selection, 
issuing policy guidance and proposed legislative language designed to 
facilitate and expand contracting in the fuels program, and issuing 
policy guidance to expedite the budget allocation process for the fuels 
program and individual projects.
    The fuels treatment program is key to restoring forests and 
rangelands to long-term health and preventing damage caused by 
catastrophic wildfires. One approach to improving forest health that 
holds promise is stewardship contracting. Stewardship contracts allow 
the private sector, non-profit organizations, and local communities to 
productively use materials generated from forest thinning.
    The 2004 budget proposal also calls for $282.7 million for fire 
preparedness, including increased funding for aviation contract costs. 
The fire suppression request of $195.3 million reflects a $36.0 million 
increase to fund suppression operations at the revised 10-year average. 
This funding level will provide resources to respond to an ``average'' 
fire year without having to rely on emergency borrowing that can be 
disruptive to other Interior programs. The Department is also working 
to develop new and improved current cost control strategies for 
suppression. The budget also includes $24.5 million for rehabilitating 
burned areas. Timely stabilization and rehabilitation of severely 
burned areas are critical to prevent further damage due to erosion, 
loss of soil nutrients, and the introduction and spread of invasive 
species. The budget also continues funding for Rural Fire Assistance at 
$10.0 million. Frequently, local firefighting departments are the first 
responders to wildland fires on public lands and play a vital role in 
preventing fires from escaping initial attack and becoming 
exponentially more expensive to suppress. In 2002, the Department 
assisted 5,349 rural and volunteer fire departments through grants, 
technical assistance, training, supplies, equipment, and public 
education support.
               helping to meet the nation's energy needs
    Interior plays a central role in meeting the Nation's energy needs. 
Conservation, renewable energy, and traditional energy sources all play 
an intertwined role in helping the Nation meet these needs. The budget 
supports the President's and the Department's goal for increasing 
domestic energy supplies from a variety of sources, in an 
environmentally acceptable manner, with a special emphasis on 
developing renewable energy sources on Federal lands.
    The 2004 budget request includes an increase of $444,000 for 
activities on the North Slope, for a total of $8.4 million. Funding 
will support planning for sales in the National Petroleum Reserve-
Alaska, and, if authorized, the Arctic National Wildlife Refuge. 
Congressional authorization will be required for a lease sale to be 
conducted in ANWR.
    The budget requests an increase of $2.0 million for BLM to 
strengthen inspection and enforcement activities, targeted primarily to 
the Powder River and San Juan basins. The budget also proposes a 
$500,000 increase to expand resource monitoring to improve assessment 
of the cumulative impacts of oil and gas development, especially on 
cultural resources and species at risk.
    The 2004 budget includes $2.0 million for renewable energy 
resources. This includes an increase of $100,000 over 2003 enacted 
appropriations to support the development of geothermal, wind, and 
solar energy on public land. This is more than five times the 2002 
funding level for these programs.
    The Outer Continental Shelf is projected to produce over 25 percent 
of both the Nation's oil and natural gas in 2003. The Minerals 
Management Service is the primary steward of the mineral resources on 
the OCS. The MMS budget of $171.3 million includes an increase of $1.6 
million to meet increased workload brought about by the demand for 
Outer Continental Shelf program services in the Gulf of Mexico. The 
2004 budget includes a total of $11.6 million, an increase of $3.9 
million over 2003 funding levels for MMS to employ innovative business 
processes and advances in electronic technology in the offshore 
program. The budget also includes an increase of $300,000 to 
investigate the energy resource potential found in methane hydrate 
formations. The MMS will also invest an additional $3.0 million to 
operate and maintain its minerals revenue management and royalty-in-
kind systems.
    The 2004 BIA request includes a $2.0 million increase for grants to 
Tribes to evaluate mineral resource potential on tribal trust and 
restricted lands. The request also includes $1.0 million to help Tribes 
expedite the development of tribal regulations governing mineral 
leasing and permitting, and rights-of-way of tribal lands required 
under the Energy Policy Act, 2002.
                          taking care of parks
    Complementing the Department's cooperative conservation commitments 
is a continued investment in taking care of National Parks. The 
President's budget proposes a $2.4 billion budget for the National Park 
Service, an increase of $131.4 million above 2003 appropriations.
    This budget continues the Department's commitment to fulfill the 
President's pledge of addressing the maintenance backlog in National 
Parks, proposing $705.8 million this year toward this effort, an 
increase of $54.1 million, nearly an eight percent increase over 2003. 
The budget includes an increase of $16.3 million for cyclic 
maintenance. This increase will provide additional funds for regular 
maintenance activities and will help the NPS keep pace with its 
maintenance needs and prevent additional projects from becoming 
deferred. It also includes an additional $16.7 million for the repair 
and rehabilitation program and a $4.7 million increase for 
comprehensive condition assessments at parks. Data collected through 
the condition assessments will be used in 2004 to evaluate progress in 
eliminating the deferred maintenance backlog, as measured by a facility 
condition index.
    To date, our accomplishments are impressive. For example, the Many 
Glacier Hotel at Glacier National Park was built in 1914. A highly 
recognized National Landmark, this facility signifies an important 
period in the development of the National Park Service. Due to the 
harsh climate and insufficient maintenance in the past, this important 
landmark had deteriorated to a stage where emergency stabilization was 
necessary. The Department is in the process of stabilizing this 
important facility.
    But we still have more work to do. A key focus in the 2004 budget 
will be to improve park roads. Here, too, the Department is reaching 
out to partners. A signed memorandum of agreement with the Federal 
Highway Administration will help us achieve our road maintenance goals 
efficiently. The Department of Transportation's 2004 budget proposes 
$300.0 million in 2004 for Park road repair as part of the 
reauthorization of TEA-21, bringing the total park maintenance budget 
to over $1 billion.
    In the National Park Service, the Natural Resource Challenge helps 
Park managers improve resource management by strengthening the 
scientific base of knowledge about park resources. Our budget proposes 
$76.1 million, an $8.7 million increase over 2003, for the program. 
This increase will provide a 3 year cumulative total increase of over 
$104 million above the 2001 level. The Natural Resource Challenge is an 
integral component of President Bush's ongoing commitment to improving 
natural resource management in Parks.
                            indian education
    No task is more important to the American community than educating 
its children. In education, the President has committed to ``leave no 
child behind.'' At Interior, this commitment centers on the 48,000 
children educated at schools operated by the Bureau of Indian Affairs 
or by Tribes under BIA grants or contracts.
    The budget request for Indian education continues the President's 
commitment with a robust $528.5 million school operations budget 
request, including funding for teacher pay increases. The budget 
includes $3.0 million to establish a separate fund for new 
administrative cost grants to encourage more Tribes to exercise their 
authority to operate BIA schools by providing full funding for start-up 
costs for the first year of tribal operation of bureau-operated 
schools.
    Children deserve safe, functional places to learn. The 2004 budget 
invests $292.6 million in school facilities, including funds to replace 
at least seven high priority school facilities and to repair schools 
identified in the Indian school maintenance backlog. The President's 
goal is to eliminate the backlog by 2006.
                               recreation
    With almost 500 million visits each year to the Department's lands, 
Interior provides a wide array of recreational opportunities, including 
fishing, hiking, hunting, camping, and wildlife viewing. Public lands 
managed by the Bureau of Land Management provide recreational venues 
for a growing population in the West, hosting over 60 million visitors 
annually.
    The 2004 budget requests $48.7 million to enable the Bureau of Land 
Management to continue to provide quality recreational opportunities. 
BLM will address transportation and access needs and challenges, expand 
interpretive and other visitor services, and support greater outreach 
and consultation efforts to help resolve user conflicts in the face of 
growing visitation.
    In recreation as in conservation, partnering is central to achieve 
our recreation goals. The Department depends on the contributions of 
200,000 volunteers, almost three times Interior's Federal workforce, to 
help address resource protection and public recreation needs. Over 
126,000 volunteers work in parks, the rest work in refuges, public 
lands, and other Interior sites across the country. In 2004 volunteers 
will assist NPS staff with important park projects including the Lewis 
and Clark bicentennial, the Powered Flight centennial, and the 
Jamestown 400th anniversary. The budget request proposes to increase 
funding by $1.5 million for partnership efforts and volunteer 
recruitment and training. A $1.0 million increase is aimed at 
bolstering volunteer participation and improving park capacity to 
supervise, train, and reward volunteers. An increase of $500,000 will 
allow NPS to establish full time volunteer coordinators to manage an 
expanding program.
    The Department's partnerships include working with States. Today, 
the LWCF State grant program is a cornerstone of the Secretary's 
commitment to involve State governments in conservation and recreation 
activities. This program, enacted in 1965, helps States develop and 
maintain high quality recreation areas and stimulate non-Federal 
investments in the protection and maintenance of recreation resources 
across the United States. Reflecting the President's goals, the 
Interior LWCF program seeks to promote cooperative alliances, leave 
land on State tax roles, and achieve conservation goals by emphasizing 
innovative alternatives to fee simple title purchases, such as 
conservation easements and land exchanges. This emphasis also enables 
Interior land management agencies to focus more funds on caring for 
lands already under their management.
    The President's budget fully funds the Land and Water Conservation 
Fund at $900.7 million. The LWCF proposal calls for $160.0 million in 
State grants, an increase of $62.6 million over the 2003 funding level 
enacted by the Congress.
                      law enforcement and security
    The budget calls for increases for Interior's law enforcement and 
security programs. The money would be used to hire additional 
personnel, provide more training, and improve security operations. This 
includes an increase of $28.9 million that is earmarked for 
strengthening law enforcement and security operations at key Interior 
visitor sites and $3.9 million to increase protection and law 
enforcement at Interior refuges, public lands, and parks along U.S. 
borders with Mexico and Canada. Of the increase for Interior visitor 
site security, $26.8 million is slated for security improvements at the 
Jefferson National Expansion Area in St. Louis, Missouri; Independence 
National Historical Park in Philadelphia, Pennsylvania; and the 
Washington Monument in Washington, D.C.
                                science
    All of the Department's efforts require good information. 
Scientific information is the cornerstone for Interior's natural 
resource management activities, providing a basis for making decisions 
about resource protection, resource use, recreation, and community-
based programs. The USGS has the principle responsibility within 
Interior to provide its bureaus the earth and natural science 
information and research necessary to manage the Nation's natural 
resources.
    The President's 2004 budget proposes $895.5 million for the USGS. 
The budget includes $17.1 million in new program increases above the 
2003 conference level for high priority research needs, including 
invasive species control and management and increased capability to 
address science needs for Interior bureaus.
                               conclusion
    The Interior Department's responsibilities lie at the confluence of 
people, land, and water. The 2004 budget funds programs that support 
our broad and multiple missions. Leaving a legacy of healthy lands and 
thriving communities requires resources, creativity, and, above all, 
collaboration. The 2004 budget supports this vision of forging 
partnerships.
    This concludes my overview of the 2004 budget proposal for the 
Department of the Interior and my written Statement. I will be happy to 
answer any questions that you may have.

    Senator Cochran. Thank you, Secretary Raley. Commissioner 
Keys, do you have a statement?
    Commissioner Keys. Yes, sir, I do.
    Senator Cochran. Please proceed.

                     STATEMENT OF JOHN W. KEYS, III

    Commissioner Keys. Good morning, Mr. Chairman. It is my 
pleasure to be here today with you, and we do appreciate the 
opportunity to come and talk with you about the President's 
2004 budget request. We appreciate all of the support that we 
have received from your staff over this year and especially in 
preparing for this hearing. I will tell you that your staffs 
are first-class, and we do enjoy working with them very much.
    I have a statement for the record which I would hope you 
would enter for me, please.
    Senator Cochran. It will be entered in the record.
    Commissioner Keys. The overall budget request for fiscal 
year 2004 totals $878 million for the Bureau of Reclamation in 
current authority. And from our perspective that budget is good 
news for the West.
    Let me digress for just a second. This is our centennial 
year for the Bureau of Reclamation. The authorizing legislation 
for the Bureau was enacted on June 17, 1902, and certainly we 
are proud of Reclamation and what our part has been in 
developing the West and our continuing relationship with the 
States there and in providing that water supply.
    We are currently the largest wholesaler of water in the 
United States and the seventh largest power utility delivering 
power and water to the West. About 31 million people depend on 
us for water every day, and we serve about 10 million people 
with power every day. We are proud of those 348 major dams and 
58 power plants that we have across the West.
    The budget request for 2004 is citizen centered and founded 
on the President's principle of results rather than procedures. 
An example is the Western Water Initiative that Mr. Raley just 
talked about. Our budget is a fiscally responsible request 
which will continue to provide funding to deliver water, 
provide a stable source of power for our growing population, 
keep our dams and facilities safe, and support sound 
environmental stewardship efforts.
    The 2004 request includes $771 million for the Water and 
Related Resources. This will allow us to continue Reclamation's 
emphasis on delivering and managing water and power, the two 
valuable public resources that we are responsible for. In 
cooperation and consultation with the States, tribal and local 
governments, along with our other stakeholders and the public 
at large, Reclamation offers workable solutions regarding water 
and power resource issues that are consistent with the demands 
for power and water across the western United States.
    With the need to pursue cost-effective, environmentally 
sound approaches to meeting these demands, the request 
continues to emphasize the operation and maintenance of 
Reclamation facilities in a safe, efficient, economic and 
reliable manner. This is all done while sustaining the health 
and integrity of ecosystems that address the water needs of a 
growing population.

                           BUDGET HIGHLIGHTS

    Let me just give you a few highlights of that budget. Mr. 
Raley mentioned the Animas-La Plata project in Colorado and New 
Mexico and the request being $58 million. This year that level 
of funding is crucial to complete the construction of this 
project within the time frames required by the Colorado Ute 
Settlement Act Amendments of 2000.
    The 2004 request will continue the construction of Ridges 
Basin Dam and the Durango Pumping Plant on the Animas River, as 
well as continuing the preconstruction activities for the 
Navajo Nation Municipal Pipeline and Ridges Basin Inlet 
conduit, and other facilities there.
    The Columbia-Snake River Salmon Recovery in Idaho, Oregon, 
Montana, and Washington addresses the implementation of 
reasonable and prudent alternatives included in two biological 
opinions issued in December of 2000. We are working mightily to 
make those work for the return of the salmon and the continued 
operation of our projects there.
    The Klamath Project in California and Oregon provides 
funding for scientific studies and initiatives that will, as a 
result of the 2002 to 2012 biological opinion, establish a 
water bank. We think the water bank will separate the 
requirements for water for the Endangered Species Act from the 
requirement of water for deliveries to the irrigation 
community. We think it is a great approach to try, and 
certainly we have every effort there to make that work this 
year.
    The safety of Reclamation dams is one of our highest 
priorities, if not the highest one. About 50 percent of 
Reclamation's dams were built between 1900 and 1950, and 90 
percent of these dams were built before the advent of current 
state-of-the-art foundation treatments, and before filter 
techniques were incorporated into those constructions. We have 
$71 million of our budget dedicated to the continued safety of 
those facilities.
    Site security activities are ongoing in the funding program 
improvements identified in 2002 and 2003. Since September 11, 
2001, Reclamation has maintained the heightened security levels 
at our facilities to protect the public, to protect our 
employees, and all of the infrastructure there, and certainly 
we will continue that. The 2004 budget includes those monies, 
about $28-and-a-half million, for us to complete the analysis 
and look at every one of those facilities that we operate and 
maintain.
    The desalination of seawater and groundwater poses a 
promising opportunity to expand water supplies for both coastal 
and inland areas. The 2004 budget contains increased funding 
for desalination research activities aimed at decreasing the 
cost and facilitating local implementation of desalination 
projects.
    The Western Water Initiative that Mr. Raley talked about is 
one that we are proud of. It sets aside some money for us to 
focus on those activities and bring forward other parts of our 
program that are complementary to those activities. A feature 
of the initiative that is especially promising is the one that 
will actually take a look 25 years into the future around our 
projects. The objective is to see if there are unmet demands 
there that cannot be met by our existing infrastructure and 
identify the areas that we and our stakeholders, with the 
States, need to address over that period of time.
    To be successful in dealing with today's complex water 
issues, we know that collaboration is the key. We must all work 
together to forge workable solutions. We are looking for new 
ways to make existing water supplies go further. We must 
continue to develop strategies where water can be used more 
than once in order to satisfy multiple users and stretch those 
existing water supplies even more. This means improved water 
conservation, investments in science and technology, and 
modernization of existing infrastructures.

                           PREPARED STATEMENT

    I would be glad to provide more detail, and we would 
certainly stand to any questions that you all might have today.
    [The statement follows:]
                Prepared Statement of John W. Keys, III
    Thank you, Mr. Chairman, and members of the subcommittee, Thank you 
again for the opportunity to appear before you today to support the 
President's fiscal year 2004 budget request for the Bureau of 
Reclamation. With me today is Robert Wolf, Director of the Program and 
Budget Group.
    Our fiscal year 2004 request has been designed to support 
Reclamation's core mission, as stated in DOI's Strategic Plan:

    ``Deliver Water and Hydropower, Consistent with Applicable State 
and Federal Law, in an Environmentally Responsible and Cost Efficient 
Manner.''

    Funding is proposed for key emerging projects which are important 
to the Department and in line with Administration objectives. The 
budget request also supports Reclamation's participation in efforts to 
meet emerging water supply needs, to resolve water shortage issues in 
the West, and to promote water conservation and improved water 
management.
    The fiscal year 2004 request for Reclamation totals $878.0 million 
in gross budget authority, an increase of $23.1 million from the fiscal 
year 2003 President's Amended Request of January 7, 2003, and a 
decrease of $33.3 million from fiscal year 2003 Enacted Level. The 
request is partially offset by discretionary receipts in the Central 
Valley Project Restoration Fund, resulting in net discretionary budget 
authority of $847.2 million, a decrease of $24.5 million over the 
fiscal year 2003 Enacted Level.
    Center to this is $11.0 million to launch a Western Water 
Initiative that uses collaboration, conservation, and innovation to 
make sure every drop of water counts. This initiative will provide a 
comprehensive forward-looking water resource management program that 
will respond to growing water demands. To be successful in dealing with 
today's complex water issues, we know collaboration is the key. We all 
must work together to forge workable solutions. We are looking for new 
ways to make existing water supplies go further. We must continue to 
develop strategies where water can be used more than once in order to 
satisfy multiple users and stretch existing water supplies even more. 
This means improved water conservation, investments in science and 
technology, and modernization of existing infrastructures.
    The four major components of the initiative are Enhancing Water 
Management and Conservation; Expanding Science and Technology Program; 
Preventing Water Management Crisis; and Strengthening Endangered 
Species Act (ESA) Expertise.
    This budget is good news for the West. Each year Reclamation is 
focused on customer value as well as increased accountability and 
modernization. This request is citizen-centered and founded on the 
Administration's principle of results rather than procedures. It is 
also a fiscally responsible request, which will provide funding to keep 
our dams and facilities safe, deliver water, provide a stable source of 
power for our growing population, and support environmental efforts.
              demonstrated commitment and accomplishments
    While performing its core mission, Reclamation delivered 10 
trillion gallons of water to over 31 million people in the 17 western 
states for municipal, rural, and industrial uses. Reclamation 
facilities stored over 245 million acre-feet of water, serving one of 
every five western farmers to irrigate about 10 million acres of land. 
Those irrigated lands produced 60 percent of the nation's vegetables 
and 25 percent of its fruits and nuts. As the largest water resources 
management agency in the West, Reclamation continues to administer and/
or operate 348 reservoirs, 56,000 miles of water conveyance systems, 
and 58 hydroelectric facilities, which generate 42 billion kilowatt-
hours annually.
    Reclamation also continues to manage approximately 8.6 million 
acres of Federal land, plus another 600,000 acres of land under 
easements. In addition, our facilities provide substantial flood 
control, recreation, and fish and wildlife benefits. Reclamation and 
its employees take very seriously their mission of managing, 
developing, and protecting water and related resources in an 
environmentally and economically sound manner in the interest of the 
American public.
    The fiscal year 2004 budget request demonstrates Reclamation's 
commitment in meeting the water and power needs of the West in a 
fiscally responsible manner. This budget continues Reclamation's 
emphasis on delivering and managing those valuable public resources. In 
cooperation and consultation with the state, tribal, and local 
governments, along with other stakeholders and the public at large, 
Reclamation offers workable solutions regarding water and power 
resource issues that are consistent with the demands for power and 
water. With the need to pursue cost effective and environmentally sound 
approaches, Reclamation's strategy is to continue to use the 
Secretary's four ``C's:'' ``Consultation, Cooperation and Communication 
all in the service of Conservation . . .'' These principles provide 
Reclamation an opportunity, in consultation with our stakeholders, to 
use decision support tools, including risk analyses, in order to 
develop the most efficient and cost-effective solutions to the complex 
challenges that we face.
    During the second session of the 107th Congress, both the committee 
and Reclamation's stakeholders accentuated their concerns over the 
availability of water two decades from now. Our fiscal year 2004 
request includes measures that will be utilized to help assure that 
water will be available for a growing population when needed. Through 
our Western Water Initiative, Reclamation plans to develop a forward 
looking water resource management program that will respond to growing 
water demand.
    Furthermore, funding is proposed for key emerging projects that are 
important to the Department and the Administration's objectives. The 
budget proposal also supports Reclamation's participation in efforts of 
meeting emerging water supply needs, resolving water issues in the 
West, promoting water efficiencies, and improving water management.
    Moreover, Reclamation's request reflects the need to address an 
aging infrastructure and the rising costs and management challenges 
associated with scarce water resources. As our infrastructure ages, we 
must direct increasing resources toward technological upgrades, new 
science and technologies, and preventative maintenance to ensure 
reliability, which will increase output, and improve safety.
    More and more everyday we see how important water resource needs 
are to our state, local and tribal partners. Many states are developing 
statewide water plans or drought contingency plans to address resource 
utilization and stewardship against the backdrop of large population 
increases with the growing concern for sustainable development. 
Reclamation, in partnership with other federal, state, local, tribal, 
and private entities, has consistently proven its ability to work with 
others to optimize water use. This technical capability is one of our 
most valuable resources.
                      water and related resources
    The fiscal year 2004 request for the Water and Related Resources 
account is $771.2 million. The request provides funding for five major 
program activities: Water and Energy Management and Development ($331.3 
million); Land Management and Development ($41.3 million); Fish and 
Wildlife Management and Development ($90.4 million); Facility 
Operations ($176.8 million); and Facility Maintenance and 
Rehabilitation ($171.5 million). The request is partially offset by an 
undistributed reduction of $40.0 million, in anticipation of delays in 
construction schedules and other planned activities.
    The request continues to emphasize the operation and maintenance of 
Reclamation facilities in a safe, efficient, economic, and reliable 
manner, while sustaining the health and integrity of ecosystems that 
addresses the water needs of a growing population. It will also assist 
the states, tribes, and local entities in solving contemporary water 
resource issues.
    Highlights of the fiscal year 2004 request include:
    Animas-La Plata in Colorado and New Mexico ($58.0 million).--The 
fiscal year 2004 request includes $58 million for the project and will 
fund the construction contracts awarded in fiscal year 2003 that are 
associated with critical path activities. This level of funding is 
crucial to complete the construction of this project within the time 
frames required by the Colorado Ute Settlement Act Amendments of 2000. 
In December 2000, Congress enacted legislation to resolve the Colorado 
Ute Indian Tribes' water right claims and allowed construction of a 
smaller Animas-La Plata Project to proceed.
    Columbia-Snake River Salmon Recovery in Idaho, Oregon, Montana, and 
Washington ($19.0 million).--This program addresses the implementation 
of Reasonable and Prudent Alternatives (RPAs) included in two 
Biological Opinions issued in December 2000. The first opinion was 
issued by the National Marine Fisheries Service (NMFS) entitled 
``Operation of the Federal Columbia River Power System (FCRPS), 
Including the Juvenile Fish Transportation Program, and 19 Bureau of 
Reclamation Projects in the Columbia Basin,'' and the second opinion 
was issued by the U.S. Fish and Wildlife Service (FWS) entitled 
``Effects to Listed Species from Operations of the Federal Columbia 
River Power System.''
    Those Biological Opinions superseded all previous FCRPS Biological 
Opinions and all actions will now be focused toward the new 
``reasonable and prudent alternatives (RPA).'' Section 7(a)(2) of the 
Endangered Species Act (ESA) requires Federal agencies to consult with 
NMFS and the FWS to ensure that agency actions will not likely 
jeopardize the continued existence of endangered or threatened species, 
or will not adversely modify or destroy their designated critical 
habitats.
    The FWS Biological Opinion is coordinated with the NMFS Biological 
Opinion, and calls for operational changes to the FCRPS, by way of 
additional research measures. A substantial majority of the action 
items resulted from the NMFS Biological Opinion, while the FWS action 
items included significantly increased regional coordination with the 
Federal regulatory agencies; aggressive actions to modify the daily, 
weekly, and seasonal operation of Federal dams; and the ``off-site 
mitigation'' of hydro system impacts.
    Klamath Project in California and Oregon ($20.8 million).--The 
funding will provide for scientific studies and initiatives as a result 
of the 2002-2012 biological opinions and for the establishment of a 
water bank as required under those same opinions, as well as to provide 
water to meet ESA compliance.
    The request will also continue funding for studies and initiatives 
related to improving water supply and quality to meet agriculture, 
tribal, wildlife refuge, and environmental needs in the Klamath River 
Basin and to improve fish passage and habitat.
    Safety of Dams ($71.0 million).--The safety and reliability of 
Reclamation dams is one of Reclamation's highest priorities. 
Approximately 50 percent of Reclamation's dams were built between 1900 
and 1950, and 90 percent of those dams were built before the advent of 
current state-of-the-art foundation treatment, and before filter 
techniques were incorporated in embankment dams to control seepage. 
Safe performance of Reclamation's dams continues to be of great concern 
and requires a greater emphasis on the risk management activities 
provided by the program.
    The fiscal year 2004 request of $71.0 million for the Safety of 
Dams Program is being made to provide for the reducing of public safety 
risks at Reclamation dams, particularly those identified as having 
deficiencies. The request provides for risk management activities 
throughout Reclamation's Safety of Dams inventory of 362 dams and 
dikes, which would likely cause loss of life if they were to fail. Pre-
construction and construction activities for up to 19 of these dams are 
identified for funding through the Safety of Dams Program. The fiscal 
year 2004 request includes $1.7 million for the Department of the 
Interior Dam Safety Program.
    Site Security ($28.6 million).--Since September 11, 2001, 
Reclamation has maintained heighten security at is facilities to 
protect the public, its employees, and infrastructures. The 
supplemental funding in fiscal year 2002 was necessary to cover the 
costs of site security activities in three principle areas. The first 
area was for guards and law enforcement, the second area included 
reviews, studies, and analyses, and the third area was for equipment. 
The fiscal year 2004 request continues funding for those critical 
activities under the categories of Critical Infrastructure Protection 
and Continuity of Operations.
    Drought ($1.1 million).--The program includes those activities 
related to administering the Reclamation States Emergency Drought 
Relief Act of 1991, as amended, to undertake activities that will 
minimize losses and damages resulting from drought conditions. The 
major component of the program relates to response activities taken 
during an actual drought to minimize losses or mitigate damages. The 
program also provides for assistance in the preparation of drought 
contingency plans.
    Desalination of Seawater and Groundwater ($775,000).--This program 
provides a promising opportunity to expand water supplies for both 
coastal and inland areas. The 2004 budget contains increased funding 
for desalination research activities aimed at decreasing the cost and 
facilitating local implementation of desalination.
    Our research activities are carefully chosen to align with the 
Department's draft Strategic Plan and are developed in collaboration 
with stakeholders. We believe that cost shared research conducted at 
existing institutions is the quickest and most economical means to 
achieve our ambitious long-term goal of decreasing desalination costs 
by 50 percent by 2020.
    Sumner Peck Settlement ($34.0 million).--The budget request 
provides payment to the plaintiffs towards the settlement of Sumner 
Peck Ranch Inc v. Bureau of Reclamation.
                        western water initiative
    The new Western Water Initiative will position the bureau in 
playing a leading role in developing solutions that will help meet the 
increased demands for limited water resources in the West. The budget 
proposes $11.0 million, which will benefit western communities that are 
struggling with increased water demands, drought, and compliance with 
the Endangered Species Act. The Western Water Initiative involves:
    Enhanced Water Management and Conservation ($6.9 million).--Funding 
will be used for the modernization of irrigation delivery structures 
such as diversion structures and canals. This will also allow 
Reclamation to use existing intrastate water banks where they are 
available, and to promote intrastate water banking as a concept to help 
resolve future water supply conflicts. Reclamation will develop 
alternative ways to balance the existing demands for water for 
agricultural, municipal, tribal, and environmental purposes. Examples 
include water management tools; inexpensive and accurate water 
measuring devices; and computer technologies that will allow remote 
sensing and automation. Moreover, new canal lining material, data 
collection and analysis systems should make predicting, managing, and 
delivering water much more effective.
    Preventing Water Management Crisis ($917,000).--Funding will enable 
us to provide effective environmental and ecosystem enhancements in 
support of Reclamation's project operations through proactive and 
innovative activities. For example, we are exploring ways of addressing 
issues at projects by identifying and integrating long-term river 
system ecological needs within the context of regulated river 
management.
    Pilot projects will be selected from a list of critical areas based 
on the potential for cost savings resulting from the development of a 
program in advance of the occurrence of a crisis. Pilot projects are 
anticipated to include environmental enhancements that provide support 
for project operations or optimization of project operations for both 
water supply and environmental benefits. For example, in some cases, 
water release patterns can be modified to address environmental needs 
without impairing the delivery of water for authorized project 
purposes.
    Expanded Science and Technology Program ($2.7 million).--
Reclamation's Desalination Research and Development Program will be 
expanded to research cost reduction of water desalinization and waste 
disposal. Reclamation has developed much of the current desalinization 
technology used around the world today, and will continue to work with 
partners in the industry to accomplish this goal.
    Funding will also expand the effective use of science in adaptive 
management of watersheds. This cooperative effort with the USGS will 
assist Reclamation in reaching decisions that are driven by sound 
science and research, are cost effective, and are based on performance 
criteria.
    Funding will also provide for peer review of the science used in 
ESA consultations and other environmental documents issued by 
Reclamation. The National Academy of Science, USGS, and other federal 
and state entities with science expertise will peer-review the science 
used by Reclamation in preparing Biological assessments. This 
initiative will improve Reclamation's use of science and technology to 
address critical water resource management issues.
    Strengthening Endangered Species Act (ESA) Expertise ($458,000).--
Funding will be used to strengthen ESA expertise and will produce 
identifiable mechanisms in order to achieve continuity in evaluating 
biological assessments and/or biological opinions. This initiative will 
enable managers to acquire a greater understanding of the purpose, 
process and requirements of the ESA as it relates to federal actions 
that are important to carrying out Reclamation's water resources 
management mission.
                central valley project restoration fund
    The fiscal year 2004 Reclamation budget includes a request for 
$39.6 million and is expected to be offset by discretionary receipts 
totaling $30.8 million, which can be collected from project 
beneficiaries under provisions of Section 3407(d) of the Act. These 
funds will be used for habitat restoration, improvement and 
acquisition, and other fish and wildlife restoration activities in the 
Central Valley Project area of California. This fund was established by 
the Central Valley Project Improvement Act, Title XXXIV of Public Law 
102-575, October 30, 1992.
    The funds will be used to achieve a reasonable balance among 
competing demands for the use of Central Valley Project water, 
including the requirements of fish and wildlife, agricultural, 
municipal and industrial and power contractors. Reclamation is seeking 
appropriations for the full amount of funds of the estimated 
collections for fiscal year 2004.
                    california bay-delta restoration
    The fiscal year 2004 Reclamation budget includes a request for 
$15.0 million. The funds will be used consistent with commitment to 
find long-term solutions in improving water quality; habitat and 
ecological functions; and water supply reliability; while reducing the 
risk of catastrophic breaching of Delta levees. Fiscal year 2004 budget 
contains funds for Bay-Delta activities that can be undertaken within 
existing statutory authorities for implementation of Stage 1 
activities. Those activities are included in the preferred program 
alternative recommended by CALFED and approved by the Secretary of the 
Interior. The majority of these funds will specifically address the 
environmental water account, storage, and program administration.
                       policy and administration
    The request for Policy and Administration (P&A) is $56.5 million. 
P&A funds are used to develop and implement Reclamation-wide policy, 
rules and regulations (including actions under the Government 
Performance and Results Act) and to perform functions which cannot be 
charged to specific project or program activities covered by separate 
funding authority. These funds support general administrative and 
management functions.
                              loan program
    No funding is requested for any direct loans. Funding of $200,000 
is requested for program administration.
               performance assessment rating tool (part)
    During fiscal year 2002, all cabinet level agencies reviewed at 
least 20 percent of their programs in concert with the Office of 
Management and Budget. The Administration conducted these reviews using 
PART, a standardized format for program evaluation and management. 
Results from the PART process were one of many criteria used in making 
budget decisions. The three Reclamation programs that were reviewed 
were Hydropower, Water Reuse and Recycling Program (Title XVI), and 
Rural Water. Reclamation is currently addressing all deficiencies 
identified with respect to each program.
    Hydropower was rated ``moderately effective'' and Reclamation has 
begun developing long-term goals that will address the identified 
issues, such as aging facilities and the need for better performance 
measures. The Title XVI program review indicated that the program was 
``moderately well managed.'' However, Reclamation's oversight of 
individual projects is limited by strong local control, and the PART 
findings indicated that there is no clear linkage between Federal 
funding and progress towards outcomes.
    The Rural Water Supply Projects were rated ``results not 
demonstrated.'' Fiscal year 2004 funding requests for this program has 
been reduced due to systemic program weaknesses, such as non-existent 
guidelines for eligibility; local cost share and program planning; and 
overlaps with other Federal agencies. The Administration intends to 
submit legislation this spring, establishing a Reclamation Rural Water 
Program with adequate cost controls and clear guidelines for project 
development.
                     president's management agenda
    Reclamation is engaged in a variety of activities designed to meet 
the Department's ``Getting to Green'' Scorecard requirements related to 
the President's Management Agenda (PMA). These activities are 
concentrated in five major components of the PMA: Expanding E-
Government, Financial Management Improvement, Human Capital, 
Performance and Budget Integration, and Competitive Sourcing.
    E-Government.--Reclamation participates in a one-stop Internet 
access that provides citizens information about recreational 
opportunities on public lands and participates in the Volunteer.gov 
website which provides information on volunteer activities. We also 
recently completed an internal review of our web program and are in the 
process of implementing the recommendations from the review, including 
the development of a common website.
    Financial Management Improvement.--Reclamation continues to make 
progress to ensure that our financial systems are compliant with the 
Joint Financial Management Improvement Program core requirements. To 
ensure that accurate and timely financial information is provided, our 
financial management program uses the Federal Financial System, the 
Program and Budget System, and its corporate data base system to report 
summary and transactions data on a 24-hour basis.
    Human Capital.--Reclamation effectively deploys the appropriate 
workforce mix to accomplish mission requirements. The use of existing 
human resources flexibilities, tools, and technology is in a strategic, 
efficient, and effective manner. Our workforce plan addresses E-
Government and Competitive Sourcing and a plan is in place for 
recruitment, retention, and development of current and future leaders, 
in addition supervisors are encouraged to work individually with 
employees to develop Individual Development Plans.
    Competitive Sourcing.--Reclamation's A-76 Inventory Consistency 
Team was established to ensure consistency in inventory reporting. The 
team established guidelines for commercial, commercial core, and 
inherently governmental functions that are specific to Reclamation's 
workforce. Two streamlined studies have been completed for 124 FTE and 
a tentative decision has been announced, moreover two additional 
streamlined studies are with the Independent Review Official and a 
preliminary planning is underway for the Express Review studies 
scheduled in early 2003.
    Performance and Budget Integration.--Reclamation continues to issue 
joint planning guidance through the Budget Review Committee process to 
provide budget targets, priorities, objectives, and goals. A Government 
Performance and Results Act (GPRA) planning calendar, including budget 
process and major milestones, has been developed. In addition, budget 
accounts, staff, and programs/activities are aligned with program 
targets.
    fiscal year 2002 accomplishments highlights and future planned 
                               activities
    In fiscal year 2002, we delivered the contracted amount of water to 
our water users, thereby meeting our contractual obligations. However, 
severe drought conditions increased demand for water, and in some 
cases, the water delivered to the water users was not enough to meet 
the increased requirement. If snow pack runoff continues at or below 
normal levels and if the drought continues, there will be far less 
water to release to our water users during fiscal year 2003 and fiscal 
year 2004.
    Reclamation renewed 100 percent of the water service contracts 
expiring in fiscal year 2002, helping to ensure continued reliable 
service. An additional contract that was not planned for was also 
renewed for a total accomplishment of 114 percent.
    Reclamation also completed Safety of Dams modifications on four 
facilities in fiscal year 2002, the Caballo, Avalon, Clear Lake and Red 
Willow dams. Also, in fiscal year 2003, Reclamation anticipates 
completing Safety of Dams modifications at Deadwood Dam in Idaho and 
Salmon Lake Dam in Washington.
    Completion of these modifications improves overall facility 
condition by reducing risk and improving safety. In some cases, 
completion of the modifications increased Reclamation's ability to 
deliver water by removing restricted capacity requirements, and 
allowing the reservoir to be filled to full operational capacity, if 
needed.
    Reclamation's draft cost of power production per megawatt capacity 
for fiscal year 2002 was $6,855. This amount puts Reclamation within 
the upper 25th percent of the lowest cost hydropower facilities. 
Reclamation also achieved a 1.3 percent forced outage rate, which 
measures the amount of unplanned time out of service. This performance 
level is 56 percent better than the industry average forced outage rate 
of 3 percent.
    By the end of fiscal year 2002, Reclamation conducted over 130 
reviews of its recreational facilities to determine the state of its 
facilities, identify corrective actions, and determine needed 
improvements. Also in fiscal year 2002, Reclamation's partnerships and 
cost-sharing practices allowed Reclamation to complete additional 
corrective actions to improve more facilities than originally planned. 
This resulted in performance greater than 100 percent completion of the 
planned corrective actions.
    Reclamation completed 130 percent of its planned site security 
improvements. Moreover, funding was used to implement additional high-
priority security improvements at its high-priority facilities, which 
was well above the target originally established.
                  fiscal year 2004 planned activities
    In fiscal year 2004, Reclamation plans to deliver 27.0 million 
acre-feet of water for authorized project purposes. In addition, we 
will complete the Safety of Dams projects at Wickiup Dam, Keechelus 
Dam, Pineview Dam, and Horsetooth Dam. This will reduce total reservoir 
restrictions and increase the available storage capacity by 127,300 
acre-feet. Reclamation will also complete projects or parts of projects 
that have the potential to deliver an additional 42,030 acre-feet of 
water, which will naturally be dependent upon water availability and 
operations.
    Reclamation plans to complete the Escondido and San Elijo Water 
Reclamation Program; the Olivenhain Recycled Water Project; the Yuma 
Area Water Resource Management Group bifurcation structure; portions of 
the El Paso Waste Water Reuse Project; canal linings; and other 
salinity reduction projects that increase water availability.
    Reclamation also plans to continue ranking within the upper 25th 
percentile of low cost hydropower producers, by comparing power 
production costs per megawatt capacity, Reclamation plans to achieve a 
forced outage rate 50 percent better than the industry average, which 
is currently 3 percent. While Reclamation anticipates completing the 
baseline condition assessments for 80 percent of the recreation 
facilities it manages, it plans to continue to maintain the overall 
facility condition rating assessed at the fiscal year 2003 baseline 
level.
    Reclamation intends to ensure that 14 percent of recreation 
facilities meet universal accessibility standards, thereby increasing 
access to recreation areas to the disabled from 8 percent in fiscal 
year 2003, in addition to maintaining the annual level of on-the-job 
employee fatalities and serious accidents at zero.
                               conclusion
    This completes my statement. Please allow me to express my sincere 
appreciation for the continued support that this Committee has provided 
Reclamation. I would be happy to answer any questions you may have at 
this time.

    Senator Cochran. Thank you, Commissioner Keys, for your 
statement. Mr. Johnston, do you have a statement to make?

                PREPARED STATEMENT OF J. RONALD JOHNSTON

    Mr. Johnston. I have a prepared statement in support of the 
request for 2004 for the Central Utah Project. And in the 
interest of time, I would simply ask that it be entered for the 
record.
    Senator Cochran. It will be so entered. Thank you very 
much.
    [The statement follows:]
                Prepared Statement of J. Ronald Johnston
    My name is J. Ronald Johnston. I serve as the Program Director for 
implementation of the Central Utah Project Completion Act under the 
direction of the Assistant Secretary for Water and Science in the 
Department of the Interior. I am pleased to provide the following 
information about the President's 2004 budget for implementation of the 
Central Utah Project Completion Act.
    The Central Utah Project Completion Act, Titles II-VI of Public Law 
102-575, provides for completion of the Central Utah Project by the 
Central Utah Water Conservancy District. The Act also authorizes 
funding for fish, wildlife, and recreation mitigation and conservation; 
establishes an account in the Treasury for deposit of these funds and 
other contributions; establishes the Utah Reclamation Mitigation and 
Conservation Commission to coordinate mitigation and conservation 
activities; and provides for the Ute Indian Water Rights Settlement.
    The Act provides that the Secretary may not delegate her 
responsibilities under the Act to the Bureau of Reclamation. As a 
result, the Department has established an office in Provo, Utah, with a 
Program Director to provide oversight, review, and liaison with the 
District, the Commission, and the Ute Indian Tribe, and to assist in 
administering the responsibilities of the Secretary under the Act.
    The 2004 request for the Central Utah Project Completion Account 
provides $38.2 million for use by the District, the Commission, and the 
Department to implement Titles II-IV of the Act, which is $2.0 million 
more than the 2003 requested level and $2.2 million more than the 2003 
enacted level. The request includes $6.4 million for the District to 
implement water conservation measures, implement local development 
projects, continue construction on Uinta Basin Replacement Project, and 
continue planning and NEPA compliance for the facilities to deliver 
water in the Utah Lake drainage basin. The request also includes $20.0 
million for use by the District to complete the construction of the 
Diamond Fork System. The problems associated with an unforeseen cave-in 
and dangerous levels of hydrogen sulfide gas have been resolved, and 
construction of the alternative facilities is progressing on schedule.
    The funds requested for the Mitigation Commission ($9.4 million) 
will be used in implementing the fish, wildlife, and recreation 
mitigation and conservation projects authorized in Title III ($7.7 
million); and in completing mitigation measures committed to in pre-
1992 Bureau of Reclamation planning documents ($1.7 million). Title III 
activities funded in 2004 include the Provo River Restoration Project; 
acquisition of habitat, access, and water rights; and fish hatchery 
improvements.
    Finally, the request also includes $2.4 million for the Program 
Office for mitigation and conservation projects outside the State of 
Utah ($239,000); operation and maintenance costs associated with 
instream flows and fish hatchery facilities ($390,000); and for program 
administration ($1.7 million).
    In addition to the request described above, the Bureau of Indian 
Affairs' budget includes $22.5 million for the Ute Indian Water Rights 
Settlement.
    In conclusion, we appreciate the opportunity to testify before the 
Committee and would be happy to respond to any questions.

    Senator Cochran. Senator Domenici has several questions 
which, I will state, will be submitted to you. We hope you will 
respond to them in a timely fashion.
    Mr. Raley. We will.
    Commissioner Keys. We will be glad to.
    Senator Cochran. We would appreciate that very much.
    Senator Craig.
    Senator Craig. Thank you very much, Mr. Chairman. The time 
is late so I will be brief.
    But let me say: Mr. Secretary, I do appreciate your 
testimony and, I think, the reality and the importance you 
bring to the Department as it relates to its responsibilities. 
I was looking at your testimony and found most interesting the 
Wildland Fire and Healthy Forests' proposal. And in that 
initiative you are talking BLM lands, I assume, exclusively.
    Mr. Raley. Yes, sir.

                   WILDLAND FIRE AND HEALTHY FORESTS

    Senator Craig. And the treatment of nearly a million acres 
of urban wildland interface--well, 300,000 of that, 700+ of 
wildland-urban--well, I guess, it is all interface. Could you 
expand on that a little more as to what your plans are? That is 
certainly a positive, but aggressive, agenda but one, I think, 
that is very necessary in the West.
    Mr. Raley. Senator, this is Interior's component of the 
President's Healthy Forest Initiative and the implementation of 
that initiative will be done--must be done in close 
coordination with and absolute partnership with the United 
States Department of Agriculture and the Forest Service. The 
areas for treatment and the method of implementation is what is 
being discussed right now so that it can be done in the most 
cost-effective manner. If you would like, we can provide you 
with the state of knowledge, whatever it is as of today, as to 
the manner of implementation. And I would suggest that we----
    Senator Craig. Well, I would----
    Mr. Raley [continuing]. Maybe get you that detail shortly.
    Senator Craig. Thank you. I am working closely with the 
Forest Service and understand, of course, that you do 
coordinate because we have inter-dispersed lands there in most 
every instance, in checkerboard patterns. But that is a very 
aggressive agenda and one that I am pleased with. So, yes, a 
briefing on that I would appreciate, as it relates to what we 
do with the Forest Service on that issue.
    The tragedy is when you talk drought and the absence of 
water, you are also talking the presence of a lot of very dry 
fuel in the forested lands of the West and the potential of 
even as great a forest fire year this coming year as we had 
last. And last was almost a record setter.

               PREVENTING WATER MANAGEMENT CRISIS MONIES

    John, in your proposal I am pleased to see, I assume by the 
language in your presentation, the ``preventing water 
management crisis monies,'' that that is a proactive account, 
or an account to be proactive as it relates to the potential of 
impending crises, i.e., a Klamath Falls or the avoidance 
thereof.
    Commissioner Keys. Yes, sir. Mr. Chairman, Mr. Craig, what 
we are trying to do is not limit the look to climatic futures, 
because none of us can see the weather that is coming.
    What we are trying to do is look at all of the different 
factors involved in water supply and where they could reach 
crisis levels in the future--looking at the growth of cities 
and towns, Endangered Species Act requirements that are taxing 
some of our existing systems now, the growing need for water 
for a lot of other purposes, water quality control for fish and 
wildlife, for recreation, the whole bit, and see where those 
hot spots might occur 25 years into the future.
    There may be some things that we can do now that start 
stretching that water supply. Then, later, we can begin working 
with our partners to implement a plan for having additional 
infrastructure in place when we get to that time where we could 
have a crisis if we do not react earlier.
    Senator Craig. Is $1.1 million in the drought category as 
it relates to the Reclamation States Emergency Drought Relief 
Act of 1991 adequate based on impending drought scenarios in 
the West at this moment?
    Commissioner Keys. Mr. Chairman, Mr. Craig, the worst time 
to plan for a drought is when one is underway. What we are 
trying to do is encourage people to prepare themselves ahead of 
time so that there are contingency plans. That $1.1 million is 
mostly planning funds that we are using with entities to be 
ready for the next one.
    Over the past few years, some of our monies have been used 
to help tribes drill wells, to work with them on providing 
water supplies to outlying areas and so forth. But this one is 
directed mainly to contingency planning so that we can be ready 
for the next drought.
    Senator Craig. Well, we know what your snow courses tell 
you today and what the impending water situation looks like in 
the West at this moment. I would trust that you are well 
underway and working with the--those who receive water on how 
you will manage your way through the coming summer.
    Commissioner Keys. Mr. Chairman, Mr. Craig, we have been 
doing that since last fall. We are receiving regular snow 
surveys. We do them every 2 weeks now. This is crunch time for 
us in preparing for next year and we are certainly working with 
all of those stakeholders and their water supplies, both what 
is available and what is projected. There are a lot of areas 
that are going to be short, and we are trying to do some 
planning for that.
    Senator Craig. All right. Well, I would appreciate also, 
when your time allows, to drop by and visit about the Snake 
River adjudication that is underway and important in Idaho. 
That would be appreciated by you.
    And certainly, Mr. Secretary, we will look forward to 
visiting with you.
    Thank you all.
    Senator Cochran. Senator Bennett.
    Senator Bennett. Thank you very much, Mr. Chairman.
    Commissioner Keys, we welcomed you to the authorizing 
committee. I introduced you. That was a day of great praise of 
your background and your service.
    Commissioner Keys. Thank you.
    Senator Bennett. And now you come to the place where you 
get beat up.
    It is a slightly different kind of a hearing here. May I 
say that I am delighted that you are here and that you are 
willing to make this kind of contribution to public service.

                          CENTRAL UTAH PROJECT

    I want to specifically recognize Ron Johnston. The Central 
Utah Project sounds enormously parochial, and that is only 
because it is.
    But I recognize that my father worked on the Central Utah 
Project, and if I can share with the committee a comment my 
father made to a staffer as they were walking back from the 
Senate floor to his office and my father said, ``You know, if 
the people of Utah were smart, if the people of Utah and their 
Senator were smart, they would build the Central Utah Project 
themselves. This looks like it will cost at least $150 
million.'' Well, it has gone--it is almost that much per year 
now and we are glad the Federal Government has helped us out.
    Obviously, Mr. Keys, I have some questions about western 
power. The 2004 budget request of the Western Area Power 
Administration proposes to shift to the Bureau of Reclamation 
the obligation to fund the approximately $6 million annual 
contribution to the Utah Reclamation Conservation and 
Mitigation Commission trust account. And that provides 
important work in conservation and mitigation programs 
associated with the Central Utah Project, or the Central Utah 
Project Completion Act.
    Now this was established by Public Law 102-575, and with 
other contributions being made by all of the stakeholders and 
project beneficiaries, including the State of Utah, the Central 
Utah Water Conservancy District, as well as the Interior 
Department. Now Western Area Power has been providing payments 
into the account since 1992 on behalf of the power user 
beneficiaries.
    So with that lead-up, Mr. Commissioner or Mr. Keys, do you 
support ending Western's responsibilities to contribute into 
this account, and transferring this funding obligation from 
Western to Reclamation? And if you have, why is that 
contribution not built into the 2004 budget request?
    Commissioner Keys. Mr. Chairman, Mr. Bennett, we do not 
support that. I will be very candid with you: We were surprised 
to find out about this change just this past week. We are in 
heavy negotiations with Western Area Power Administration now 
about them continuing the contributions of those monies to that 
project.
    Senator Bennett. Okay. Just so long as it comes, I am not 
really excited about where. I just want the money.
    Commissioner Keys. I understand, sir.
    Senator Bennett. Okay. Continue your negotiations.

                           FLAMING GORGE EIS

    Okay. Now it is my understanding that the Bureau will 
release its draft EIS for Flaming Gorge this summer. Is that 
correct, or is the date subject to change?
    Commissioner Keys. Mr. Chairman, Mr. Bennett, that is the 
schedule as we see it, and I have seen nothing that would 
affect that schedule as of right now.

                            SECURITY ISSUES

    Senator Bennett. Good. Finally, on security issues, so far 
the Bureau has treated security costs as non-reimbursable. Do 
you intend to continue to do that?
    Commissioner Keys. Mr. Chairman, Mr. Bennett, what we are 
trying to do is accommodate the extra requirements for security 
that came out of the September 11, 2001 attack. At some time in 
the future, we will have to go back and reassess what is 
reimbursable on an annual basis.
    But what we are trying to do now are all of those reviews 
of facilities, the analysis of security for each one of the 
facilities, and then at least get started into the hardware 
preparations, the installation of facilities, before it becomes 
reimbursable. So for the time being, we are able to maintain 
that. At some time, we will have to take a hard look at that, 
and certainly a part of that hard look would be working with 
your committee here, sir.
    Senator Bennett. Thank you. We have had a good relationship 
with you as, of course, we have with Mr. Johnston who has been 
very helpful in working with us on the goals of the Central 
Utah Project.
    One last area I want to probe a little, and you have gotten 
there with your previous question: What did you do in the 
Bureau when the Department of Homeland Security raised the 
threat level? And what kind of budget impact did those actions 
have? Do you have flexibility in the 2004 budget to accommodate 
those kinds of circumstances? Just visit with us generally 
about what happens when you go from yellow to orange, and what 
kind of budget we need to look at.
    Commissioner Keys. Mr. Chairman, Mr. Bennett, when we went 
from yellow to orange, of course it heightened the level of 
security for all of us and some of the requirements at some of 
our facilities. There is flexibility in the security monies 
that we have to go to the higher level. I am treading on a thin 
line of what is secure and what is not and how much we can 
cover here.
    Senator Bennett. And you are speaking to the new chairman 
of the Homeland Security Subcommittee----
    Commissioner Keys. Yes.
    Senator Bennett [continuing]. So take----
    Commissioner Keys. Sir, what I would propose----
    Senator Bennett [continuing]. Take the opportunity to ask 
for a little money out of the----
    Commissioner Keys. Okay.
    Well, I will do that.
    What we would prefer to do is, Mr. Chairman, Mr. Bennett, 
we would like to come and give you a secure briefing on all of 
those facilities and the differences between those levels of 
security and how we are prepared to do that.
    I will assure you that we were able to achieve the change 
of security levels within minutes, rather than hours or days, 
when we went to the higher level this time. We were ready for 
it. It happened, and it worked very well. We would certainly be 
willing to come and give you a lot of details in a secure 
briefing on all of those facilities that you are interested in.
    Senator Bennett. Very good. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator Bennett.
    Mr. Raley. Mr. Chairman, Senator, if I might just on that 
last question----
    Senator Cochran. Secretary Raley.
    Mr. Raley. I think that it is fair that we inform this 
subcommittee, however, that we may need to look at 
redirecting--we do not know how much--but some funds within the 
2003 budget to meet needs that will be apparent as a result of 
the work that has taken place in fiscal year 2003. We believe 
that those may be accommodated with existing resources, but we 
obviously need to be in very close coordination with members of 
this committee on these important matters.
    Senator Bennett. Okay. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Cochran. Thank you, Mr. Secretary, for making that 
comment. We appreciate your following the rules on 
reprogramming, and we look forward to working with you on any 
requests you have for that.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
             Question Submitted by Senator Pete V. Domenici
                    silvery minnow on the rio grande
    Question. As you are well aware, the State of New Mexico is 
suffering a severe drought, the extent to which has not been seen in 
recent history. Complicating this situation is the fact that we have an 
endangered species, the silvery minnow, living in the Rio Grande. All 
of these competing demands, combined with the drought, has resulted in 
millions of Federal dollars invested in seeking a solution.
    Can you provide the committee an update on the litigation and both 
Interior's and the Bureau's involvement?
    Answer. Litigation in the Minnow v. Keys case continues against the 
Bureau of Reclamation (Reclamation) and the U.S. Army Corps of 
Engineers for alleged Endangered Species Act violations. Plaintiffs 
identified the central issue to be the scope of discretionary authority 
of Reclamation and the Corps over Middle Rio Grande water deliveries 
and river operations to deliver water for the benefit of the minnow 
over others. In a cross claim against the United States in Minnow v. 
Keys, the Middle Rio Grande Conservancy District seeks quiet title to 
all Middle Rio Grande Project properties.
    On September 23, 2002, Chief U.S. District Judge James Parker 
issued an Opinion declaring the Fish and Wildlife Service's September 
12, 2002, Biological Opinion arbitrary and capricious. The Service and 
Reclamation were ordered to complete formal consultation for 2003 water 
operations by March 1, 2003. Judge Parker's decisions were appealed and 
stayed by the 10th Circuit Court of Appeals. The United States in its 
appeal brief is arguing that the district court erred in its definition 
of discretion and requirement to compensate for shortages. The 10th 
Circuit has not made a decision and it is not known when it will do so. 
Through the winter and early irrigation season, Reclamation has 
continued to meet the flow requirements of the June 2001 Biological 
Opinion which was in place prior to the Biological Opinion which was 
struck down in September. Reclamation submitted a final Biological 
Assessment to the Service on February 19, 2003, covering water 
operations from 2003 to 2013. A final Biological Opinion was released 
by the Service on March 17, 2003 and Reclamation will comply with the 
recommended flow levels, working cooperatively with water users.
    Question. In your opinion, is it possible for us to manage our way 
through this difficult situation, or is it an impossibility?
    Answer. We are doing our very best to manage the water situation in 
these difficult circumstances. Several strategies have brought success 
through difficult times in recent years. During court-ordered mediation 
in 2000, Federal and non-Federal stakeholders came together and 
developed solutions which led to supplemental water being provided to 
the river to significantly help Rio Grande silvery minnow survival 
while additional supplemental irrigation water was provided to farmers. 
In January of 2000, Federal and non-Federal stakeholders signed a 
Memorandum of Understanding to form the Endangered Species Act 
Workgroup to develop the Middle Rio Grande Endangered Species Act 
Collaborative Program. The Program serves as a framework to coordinate 
actions to protect and improve the status of two listed species, the 
minnow and the flycatcher, while existing and future water uses are 
protected and proceed in compliance with applicable laws. The Program 
has made significant progress in implementing water acquisition, 
habitat restoration, silvery minnow monitoring, propagation, and rescue 
activities for the benefit of listed species.
    In a landmark agreement between State and Federal stakeholders, a 
Conservation Water Agreement was signed in June 2001, to provide up to 
30,000 acre-feet of water annually for 3 years to benefit the silvery 
minnow. An important component of this effort was another supporting 
agreement between the United States and the Middle Rio Grande 
Conservancy District. As a result, in 2001, approximately 26,000 acre-
feet was released from upstream storage for the benefit of the minnow. 
In 2002, an additional amount of approximately 26,000 acre-feet of 
conservation water was released. Also in 2002, the City of Albuquerque 
made available water to Reclamation and Middle Rio Grande Conservancy 
district to benefit both the minnow and farmers. This supplemental 
water contributed to the ability of Reclamation and others to remain in 
compliance with the Endangered Species Act while continuing to deliver 
water to downstream users. Similar opportunities for cooperation 
between Federal and non-Federal stakeholders can also make a difference 
in 2003.
    Question. Can you briefly discuss your plan for this growing 
season?
    Answer. Reclamation has begun to release supplemental water it has 
acquired from willing San Juan-Chama Project contractors through lease 
agreements. This water is anticipated to last at least several weeks. 
Discussions are ongoing to determine if there are stakeholders 
interested in providing water willingly, and in accordance with State 
law, to yield additional supplemental water. Given current forecasts 
(65 percent of average inflow to El Vado Reservoir as of March 1st), 
Reclamation expects that inflow during spring runoff should meet the 
needs of both Indian and non-Indian irrigation along with March 17, 
2003, final Biological Opinion flow requirements. Additional 
supplemental water is necessary to remain in compliance with the 
Endangered Species Act for the remainder of the year. Reclamation will 
store water at El Vado Reservoir to meet prior and paramount needs of 
Pueblos and Tribes.
    During the course of discussions amongst Federal and non-Federal 
parties over the Service's final Biological Opinion released March 17, 
2003, strategies were developed to share in the responsibilities of 
Endangered Species Act requirements. Absent a ruling from the 10th 
Circuit Court, Reclamation plans on using available supplies of 
supplemental water and exercising the discretion it currently has in 
curtailing Middle Rio Grande Project diversions to the level needed to 
remain in compliance with the final Biological Opinion requirements.
    Question. What do you believe is the key to the success on the Rio 
Grande and the minnow?
    Answer. The key to success on the Rio Grande is continued 
cooperation and collaboration amongst all the key Federal and non-
Federal stakeholders, including environmental groups, who currently 
participate in the Collaborative Program. Collaborative Program 
participants are currently working on long-term solutions to the 
complex problems of protecting the listed species while managing 
available water supplies, in a forum where frequent communication is 
possible through a consensus process. Ongoing habitat restoration, 
monitoring, propagation and rescue activities benefit the listed 
species. Ongoing efforts in the development of a long term water 
management plan include discussions on forbearance, water banking, 
water conservation, and improved efficiencies in water operations. 
Committees are made up of key stakeholders knowledgeable about 
operational, legal, and contractual needs. Support of this Program is 
very important in developing long-term collaborative solutions in this 
very complex situation.
    Question. How are we doing with our efforts to take the fish to the 
water by modifying existing habitat so it is more hospitable for the 
minnow?
    Answer. Salvage efforts have transferred over 3,500 silvery minnow 
to upstream areas and several hundred thousand eggs to rearing 
facilities. The Service has released 100,000 silvery minnows since 
December 1, 2002, for augmentation near Albuquerque, New Mexico, which 
is located higher in the basin. The Service expects to release another 
30,000 fish near Albuquerque in April 2003. The Collaborative Program 
continues to develop a Habitat Restoration Plan that takes into account 
the greater availability of water higher in the basin while being 
sensitive to the significance of the existing population of silvery 
minnow in the lower reaches. The Service's final March 17, 2003, 
Biological Opinion places an emphasis on habitat restoration in the 
upstream reaches. Propagation and augmentation efforts continue with a 
goal of expanding silvery minnow populations throughout the Rio Grande 
corridor to reduce dependence on downstream populations of minnows.
    Question. What can we do to assist you in these efforts?
    Answer. Continue to support the Collaborative Program and other 
activities necessary to mitigate the current drought situation.
                        middle rio grande levees
    Question. We provided an additional $10 million in the operations 
and maintenance account to address the threatened levees along the Rio 
Grande.
    Can you tell the committee when the fiscal year 2003 funding will 
be available for obligation?
    Answer. Plans for utilization of the additional funding for the 
threatened levees along the Middle Rio Grande have been underway for 
many months. The funding is currently available for obligation. Most of 
the funds will be obligated within the next 4 months, with all funds 
being obligated by the end of fiscal year 2003.
    Question. What is the current plan and schedule for repair work to 
begin on the levees?
    Answer. As a result of the additional funding for the threatened 
levee sites in fiscal year 2003, work on one additional site will be 
completed, while on-going work at seven other sites will be accelerated 
in fiscal year 2003. In addition, design work will begin on two more 
sites to prepare for funds available in fiscal year 2004.
    Question. What level of funding does the Congress need to provide 
the Bureau this year in order to complete this work in a reasonable 
time, given the current risk of the levees?
    Answer. Reclamation has the personnel and contracting capability to 
effectively utilize $10.5 million per year for the period fiscal year 
2003 through fiscal year 2012, the same as requested in the President's 
fiscal year 2004 Budget Request. Over a period of 10 years, this level 
of funding would reduce the number of sites where the levees are 
threatened to a point where any new sites could be corrected within a 
1- or 2-year timeframe. Reclamation's Albuquerque Area Office is 
capable of performing all project requirements including designs, 
environmental compliance work, contract administration, and project 
management.
                     salt cedar on the pecos river
    Question. The last several years the Bureau has started an effort 
whereby you go into and around the banks of the Pecos River and take 
out salt cedar trees in an effort to reduce their draw on the river 
water. One salt cedar soaks up approximately 200 gallons of water a 
day.
    Can you tell me if this program is making any progress?
    Answer. The Secretary of the Interior was authorized by an Act 
(September 12, 1964, Public Law 88-594, 78 Stat. 942) to carry out a 
continuing program to reduce non-beneficial consumptive use of water in 
the Pecos River Basin. During the late 1960's and early 1970's, the 
Bureau of Reclamation cleared about 33,000 acres of salt cedar in the 
Pecos River floodplain in New Mexico and 18,000 acres in the Pecos 
River floodplain in Texas. Currently, Reclamation maintains the 
original 33,230 acres in New Mexico by keeping this area free of salt 
cedar. Salt Cedar control and evaluation has also been identified as a 
priority by the National Invasive Species Council. This project is 
conducted on both private and public lands located from above Sumner 
Dam downstream to the Texas State line. Reclamation contracts with the 
Carlsbad Irrigation District to perform the mechanical removal work. 
Salt cedar removal is primarily accomplished utilizing rubber-tire 
tractors with root plows, and a D-7 caterpillar with a rake attachment. 
The New Mexico Interstate Stream Commission cost-shares this project. 
Mechanical clearing of salt cedar may not provide the most cost 
effective nor long-term solution. Therefore, we are exploring a 
partnership with Carlsbad Irrigation District to explore additional 
options for salt cedar control.
    Question. Has the Bureau given consideration to doing salt cedar 
eradication anywhere else in New Mexico?
    Answer. Reclamation works within its authorities to control the 
growth of salt cedar. At Caballo and Elephant Butte Reservoirs in the 
Rio Grande Basin, woody phreatophyte vegetation which is salt cedar and 
screwbean mesquite, is also controlled. For about the past 43 years, 
Reclamation has been maintaining approximately 6,300 acres at Caballo 
Reservoir cleared primarily through mowing, and is considering 
herbicide use there. Since 1972, approximately 4,900 acres have been 
maintained clear of phreatophytes at Elephant Butte Reservoir, again 
primarily through mowing. In addition to our traditional mechanical 
methods, Reclamation recently initiated a demonstration program of 
herbicide treatments. In August 2002, Reclamation completed herbicide 
treatments on 200 acres of dense stands of phreatophytes within the 
Caballo Reservoir floodplain.
    Reclamation is also active in habitat restoration activities along 
the Rio Grande between Cochiti and Elephant Butte to minimize 
reinfestation of salt cedar or other noxious weeds. This work includes 
removal on non-native species and replacement with natives, and 
provides improved habitat for the Rio Grande silvery minnow and the 
southerwestern willow flycatcher.
    Reclamation also supports testing of biological control agents for 
salt cedar. Reclamation is seeking the inclusion of test sites for 
release of Diorhabda beetles or other potential agents in both the 
Pecos and Rio Grande Basins.
    Question. Is there sufficient need to expand this program?
    Answer. The need to expand and coordinate salt cedar control 
activities with local partners was recognized by the Department which 
supported an addition of $600,000 in fiscal year 2004 to Reclamation 
for this purpose. Expansion of salt cedar removal should result in 
increased surface and ground water supplies.
    Salt cedar is a real or potential threat to many watercourses in 
New Mexico. Salt cedar alone has been estimated to cause 2.4 million 
acre feet/year water, with irrigation water losses as high as $121 
million annually. Reclamation, supported by the Department, is also 
leading an initiative in fiscal year 2004 with Federal and non-Federal 
partners to deploy the best science available for cost-effective, 
integrated management for salt cedar. Reclamation in partnership with 
local interests will develop a control and management plan that will 
focus on resources at the greatest risk from imminent infestation or 
the most valuable resources currently infested.
    Reclamation looks to improve and expand the effectiveness of its 
salt cedar control efforts utilizing combinations of methodologies, 
including integration of re-vegetation with native species. The program 
will also implement alternative treatments and evaluations will be 
conducted to compare those methods to determine which treatment or 
combinations of treatment are most effective.
                              section 208
    Question. The fiscal year 2003 Omnibus funding bill included a 
provision which requires the Bureau to contract out 10 percent of its 
work to the private sector in fiscal year 2003, which is in line with 
the Administration's proposal for contracting out more Federal work. 
The goal here is to allow the private sector to do work currently done 
by the Federal Government in instances where it makes sense to do so, 
both from a cost and efficiency standpoint. As a frame of reference, 
the Corps contracts out over half of its work.
    Commissioner, what rating did the Bureau receive from the 
administration on its efforts to contract out its work?
    Answer. Reclamation is currently ``at green'' on the 
administration's Competitive Sourcing initiative, with a composite 
rating of 8.9 (out of 10).
    Question. How do you plan to implement this effort to meet the 
requirements of the Omnibus legislative language of 10 percent in 
fiscal year 2003 and an additional 10 percent each year until you reach 
40 percent?
    Answer. While the Bureau of Reclamation fully supports the 
administration's effort to increase efficiency by increasing 
contracting opportunities, this is an area that will require additional 
review by the Bureau.
    The Bureau currently contracts out a significant amount of our 
design and engineering work, but we have not determined the impact of 
increasing beyond those existing levels. We find overly prescriptive 
language of this sort may have an adverse effect in actual application.
    Question. Assistant Secretary Raley, what is the administration's 
position on this provision?
    Answer. While we strongly support the President's Management Agenda 
Initiative, including Competitive Sourcing, Section 208 will require 
further review.
                            animas-la plata
    Question. As many of my colleagues may be aware, the issue of the 
Animas-La Plata project has been around for a long time. Last year, 
this subcommittee provided $35 million for construction. This year, the 
Bureau's budget contains $58 million for this project.
    Can you provide us an update on the ALP project?
    Answer. Reclamation authorized the initiation of construction 
effective November 9, 2001. Nearly $18 million was expended in fiscal 
year 2002 to: (1) complete final designs on the project features; (2) 
complete the construction of a portion of the Inlet Conduit; and (3) 
initiate mitigation activities on impacts to cultural resources, 
wetlands, and fish and wildlife resources. Fiscal year 2003 activities 
include award of construction contracts on the Durango Pumping Plant, 
Ridges Basin Dam, and the relocation of three natural gas pipelines 
that currently lie within the footprint of the dam. Additional lands 
will be purchased that are needed for dam construction. Work will also 
continue on the mitigation activities.
    Question. Are we still on schedule and in compliance with the Ute 
Water Rights Settlement Act?
    Answer. The Colorado Ute Settlement Act Amendments of 2000 
authorized appropriations for construction over a 5-year period to 
allow construction to be completed in 7 years. Fiscal year 2002 was the 
first year of construction. With the appropriations we have received to 
date and with what is requested for fiscal year 2004, and what will be 
budgeted for fiscal year 2005 and 2006, we are able to fund all 
critical activities and are scheduled to complete the project within 7 
years.
    We are also utilizing the talents of both the Ute Mountain Ute and 
Southern Ute Indian Tribes to perform much of the construction and 
environmental data collection activities through Indian Self-
Determination and Education Assistance Act contracts and cooperative 
agreements.
                             santa fe wells
    Question. During construction of the Fiscal Year 2002 Supplemental, 
the Congress provided funding for the drilling of emergency wells in 
Santa Fe, New Mexico.
    Can you update us on the progress of those wells, have they been 
drilled?
    Answer. The wells have been drilled and are currently being 
completed. Construction is underway on the pipeline and pumping plants. 
Final project completion is estimated for early fall.
    Question. What is the impact of the current drought on these wells?
    Answer. The current drought is not expected to significantly affect 
the production of the new supplemental wells. However, the current 
drought does increase the importance of getting the new wells on line 
as soon as possible to supplement the City's existing water supply.
                           drought assistance
    Question. The Bureau has $1.12 million in fiscal year 2004 budget 
for Drought Emergency assistance. I have a concern, which many of my 
colleagues have expressed, that no one is doing anything significant 
about how to manage our non-agriculture drought problems.
    Does the Bureau have the ability to do more within its existing 
authorities if additional funding were provided?
    Answer. The Bureau of Reclamation has authority to address both 
agricultural and non-agricultural drought situations. In fiscal year 
2002, Reclamation received requests for emergency drought assistance 
and planning in the amount of approximately $12 million. Those requests 
were for emergency domestic water supply wells, rehabilitation of 
disintegrating delivery systems, acquisition of water for drinking, and 
the acquisition of water for endangered species in order to continue 
operating our projects. However, Reclamation must balance funding for 
drought assistance along with the multiple priorities and emerging 
needs within Reclamation's other programs.
                        western water initiative
    Question. How does this tie into the new initiative for Western 
Water in your budget request for $11 million?
    Answer. Many of Reclamation's project water delivery facilities are 
more than 60 years old, and inexpensive modernization of existing 
infrastructure could add significant efficiencies to water delivery 
systems, while providing the flexibility needed to help meet unmet 
water demands. This Initiative will result in enhanced efficiency in 
the operation of Reclamation projects, which in turn will enhance 
Reclamation's performance in carrying out core mission functions: the 
delivery of water and power in an environmentally sound and cost 
efficient manner.
    Question. How will New Mexico benefit from this new initiative?
    Answer. The water crises in New Mexico, particularly the Middle Rio 
Grande are part of what prompted this Western Water Initiative. There 
are opportunities in New Mexico to implement water conservation and 
efficiency improvements, both on-farm and in water delivery systems 
that will result in an increased ability to meet otherwise conflicting 
demands for water. Science and technology research may reduce the cost 
of water desalination technologies by 50 percent by 2020, providing 
additional fresh water to benefit people and the environment including 
potential benefit to rural America through the treatment of brackish 
water.
    Question. What does this initiative hope to achieve and is it a 
departure from what the Bureau is doing now?
    Answer. The Initiative provides a focused effort to modernize water 
delivery facilities in the West, some of which are more than 60 years 
old. Inexpensive modernization of existing infrastructure could add 
significant efficiencies to water delivery systems, providing the 
flexibility needed to help meet unmet water demands. Reclamation will 
focus on financial incentives and technical assistance for 
modernization of water supply systems where the investment will allow 
water managers to meet otherwise unsatisfied demands for water.
    In addition, focused Federal participation will assist with basin 
and watershed improvements as part of local, collaborative processes in 
areas where the greatest potential for conflict exists.
    Question. Do you expect that this program, if begun, will transform 
the Bureau and how it manages its efforts with regard to water or is 
this to be a short-term effort until the current drought conditions 
subside?
    Answer. The Bureau's fiscal year 2004 Western Water Initiative is 
the beginning of what we hope will be the catalyst for a longer-term 
strategic approach to predicting, preventing, and alleviating water 
conflicts. It takes a proactive rather than reactive approach to water 
management and conservation, research and development to bring down the 
cost of desalination, prevent water management crises, and strengthen 
Endangered Species Act expertise among Reclamation employees. By 
developing a forward looking 21st century water resource management 
program, we can better respond to the growing demand for water in the 
West. This initiative will provide the tools necessary to address the 
future water supply needs of farmers, cities, and rural communities in 
those areas of the West that are most prone to conflict over water 
supply, and do so in an environmentally friendly manner.
                        western water initiative
    Question. Given that the Bureau only received a nominal increase in 
funding this year, where did you reduce program dollars elsewhere to 
fund this effort in this fiscal year?
    Answer. Generally, the Bureau did not reduce any project line item 
funding to accommodate the Western Water Initiative. Given the 
similarity in purpose, programs such as the Environmental Program 
Administration and Environmental Interagency were combined into the new 
Initiative. However, funds for this initiative were developed in 
concert with the overall budget request and funding levels.
                                 ______
                                 
               Questions Submitted by Senator Harry Reid
                            ongoing projects
    Question. What would be the impact to the cost and schedule of on-
going Bureau projects, if the President's budget were enacted as 
proposed?
    Answer. At the present time there would be no impact to cost and 
schedule if our budget was enacted as proposed.
    Question. For those projects budgeted in the President's proposal, 
are they funded at their optimal level?
    Answer. At the present time all of the Bureau's projects in the 
President's proposal are funded at a level that will allow projects and 
activities to proceed to meet the needs of the project beneficiaries.
       drought emergency assistance program weather modification
    Question. Commissioner Keys: Please provide us with an update on 
how funds provided in fiscal year 2002 and fiscal year 2003 for a 
regional weather modification program are being expended.
    Answer. The Bureau of Reclamation developed a competitive 
procurement process for Cooperative Agreements in fiscal year 2002 to 
award research proposals that met the intent of Congress to establish a 
research Weather Damage Modification Program. Seven States responded to 
the Request for Proposals (RFP). They were North Dakota, Texas, 
Oklahoma, New Mexico, Utah, Nevada, and California. The RFP and 
contract awards for that work have been completed for the States of 
Nevada and North Dakota, and awards are near completion for Texas, 
Oklahoma, New Mexico, Utah, and California.
    The fiscal year 2003 funding will be awarded through a similar 
Request for Proposal process and existing work may be extended to 
include further research efforts depending upon the needs of the 
States.
                        western water initiative
    Question. The Bureau is proposing to initiate a Western Water 
Initiative in fiscal year 2004 to enhance efficiency and operation 
Reclamation programs and projects. First year funding is $11 million. 
This is significant first year funding for such an initiative. Could 
you give us an overall cost estimate for this initiative and some of 
the outputs that you expect to receive?
    Answer. The total cost and duration of the initiative have yet to 
be determined. The Western Water Initiative will be a means for the 
Federal Government to provide technical and financial assistance to 
State and local entities in areas in critical need of assistance. This 
Initiative will result in enhanced efficiency in the operation of 
Reclamation projects, which in turn will enhance Reclamation's 
performance in carrying out core mission functions: the delivery of 
water and power in an environmentally sound and cost efficient manner. 
Ultimately, Reclamation will develop a forward looking 21st century 
water resource management program that will respond to the growing 
demand for water in the West, as opposed to costly crisis management as 
experienced in the Klamath and the Middle Rio Grande Basins.
    Reclamation's goal is to help avoid water use conflicts through 
better use of technology, targeted research, identification of long-
term potential crisis areas, and increased expertise about the 
Endangered Species Act. Examples of making improvements to existing 
irrigation systems include:
  --Installing water metering and measurement devices on outdated 
        irrigation systems to track the amount of water being used and 
        where.
  --Converting open ditches to pipeline to reduce evaporation.
  --Lining canals at reasonable cost to minimize seepage where it can 
        result in system-wide efficiency--some areas of the West can 
        reduce loss of by 50 percent or more.
  --Developing a partnership with USDA to install on-farm irrigation 
        evaluation program, in which field irrigation is evaluated for 
        distribution uniformity and efficiency. This would include 
        locating, designing, and providing for review of flow 
        measurement devices and data, installation of water control 
        devices and instrumentation within irrigation districts.
  --Using SCADA (Supervisory Control And Data Acquisition) system to 
        allow river managers to remotely monitor and operate key river, 
        pump, canal, and return flow control facilities by computer and 
        radio telemetry. SCADA equipment receives, accumulates, 
        records, and provides data on a real time' basis. Individual 
        stations can be set to continuously monitor river levels or 
        diversion flow rates. In addition, Reclamation and water 
        district managers can respond to daily water management needs 
        and emergencies in a timely fashion by controlling pump and 
        canal facilities remotely.
  --Conducting pump testing programs that provide accurate flow rate 
        measurement data and information on the efficiency of the 
        pumping plants that would improve efficiencies in managing both 
        water and energy use.
    Reclamation will also pursue the use of existing intrastate water 
banks where they are available, and to promote intrastate water banking 
as a concept to help resolve future water supply conflicts. In most 
situations, water banks provide added flexibility in dealing with 
environmental, tribal, Endangered Species Act, or other competing 
demands for contracted water supplies.
                 title xvi--water reclamation and reuse
    Question. Again this year, funding for the Title XVI program has 
been slashed. Local communities all over the southwest have invested 
hundreds of millions of dollars in water recycling projects. These 
projects provide a crucial link in the water supply chain in Western 
States. The small amount of Federal funding provided by Reclamation, in 
many cases, is the catalyst that makes these projects feasible for the 
local communities. If, as Reclamation states, their mission is 
providing water and power to the west; how can the Title XVI program be 
someone else's responsibility as stated in your program review?
    Answer. Reclamation's Title XVI projects, while important, are not 
part of Reclamation's core mission. The President's Budget request for 
these programs recognizes that we must maintain our existing 
infrastructure before we fund construction of new infrastructure. The 
PART process for Title XVI generated extensive information on program 
effectiveness and accountability, including the need for additional 
performance measures. The principal PART findings for Reclamation's 
Title XVI Water Reuse and Recycling program, with a PART rating of 
``Moderately Effective'' indicate the program is moderately well-
managed, although Reclamation's oversight of individual projects is 
limited by the strong degree of local control. Fiscal year 2004 funds 
will be directed to the completion of projects already under 
construction.
    Additional performance measures are currently being developed for 
Title XVI that should facilitate better long-term planning and provide 
a clearer linkage between Federal funding and progress towards 
outcomes.
    Question. Why will Reclamation not budget for these projects?
    Answer. Existing budget constraints have made it necessary to fund 
higher priority items.
                    energy and water development act
    Question. Commissioner Keys: A couple of years ago in the Energy 
and Water Development Act, Reclamation were given the responsibility to 
act as the clearing house for advanced water treatment technologies. 
How is this effort being undertaken?
    Answer. During 2001, Reclamation began development of a 
desalination clearinghouse. In 2002, a draft clearinghouse web site was 
created (www.usbr.gov/desal/). This site features information on 
technologies, publicly available reports, cost estimation techniques, 
and publicly available information. Coinciding with Reclamation's draft 
clearinghouse review process, the WateReuse Foundation 
(www.wateruse.org) published a request for proposal to create a 
salinity management clearinghouse web site. Salinity management is a 
component of desalination. Therefore in December 2002, Reclamation 
invited the WateReuse Foundation to meet and discuss how best to 
accomplish a water reuse and desalination clearinghouse web site so as 
not to duplicate efforts. Both organizations agreed to cooperate in the 
clearinghouse development.
    Developments in desalination technology in the last 10 years have 
dramatically altered the capability of desalination systems to meet 
national water needs. Promising technological advancements are in the 
area of reduced membrane fouling, improved pretreatment systems, and 
increased energy recovery. Under the Desalination Research Act, we are 
also investing in development of new desalination processes such as low 
cost evaporation, chlorine resistant membranes, membrane distillation, 
and membrane bioreactors. In early fall 2001, Reclamation provided 
recommendations for technologies that should advance to the 
demonstration phase to Congress.
    Question. Are there any promising technologies?
    Answer. Promising technologies ready for demonstration, pursuant to 
the Desalination Act, include a sea water and inland brackish water 
test bed commercialization project (focusing on energy efficiency, feed 
water pretreatment, increased membrane life, concentrate disposal, 
environmental impact, increased scale of economies, and boron removal); 
Membrane Bioreactor System commercialization effort (focusing on 
decentralized drinking water treatment of waste waters to replace 
conventional treatment plants); Devaporation commercialization effort 
in an inland rural area (which would feature concentration disposal 
and/or renewable energy powered rural water treatment and low-cost) and 
testing of a small-scale renewable energy/desalination systems suitable 
for rural and Native American communities; and demonstration of a novel 
method to produce fresh water and employ innovative concentrate 
disposal methods, utilizing geothermal energy. Non-traditional 
technologies that may offer lower costs and higher efficiencies are 
currently being reviewed. These include technologies such as freezing 
with clathrates, magnetics, ultrasonics, adsorption, and other novel 
separation processes.
                          california bay-delta
    Question. In the recently enacted Omnibus legislation, a provision 
was inserted to clarify Reclamation's authority for feasibility studies 
for Los Vaqueros water storage project, Upper San Joaquin water storage 
project and Sites reservoir storage project. This clarification was 
necessary due to the budget request for CALFED funding without a clear 
authorization. Are there other issues likely to arise this year that 
would require additional clarifying legislation? If Reclamation is 
going to continue to request funding for the CALFED Bay Delta 
Restoration Program, I would recommend that the Administration actively 
try to resolve the authorization question for the overall project. We 
have put ``band-aids'' on this program for 2 years due to the 
authorization stale-mate and I am unsure of how much longer the 
subcommittee will be able to continue this practice. Please carry that 
message back to your superiors.
    Answer. With the provision of feasibility authority in the Omnibus 
legislation, Reclamation possesses adequate authority to expend the 
current year appropriations for the CALFED activities delineated in the 
legislation. Reclamation remains hopeful that legislation will advance 
in this session to provide Federal agencies with the necessary program 
authorization to fulfill the goals and commitment of the CALFED Bay-
Delta Program, and assure completion of program elements in a balanced 
and integrated fashion.
                   western area power administration
    Question. The Fiscal Year 2004 Budget Request for the Western Area 
Power Administration proposes to shift to the Bureau of Reclamation, 
the obligation to fund the $6 million annual contribution to the Utah 
Reclamation Conservation and Mitigation Commission Trust Account which 
provides important work in conservation and mitigation programs 
associated with the Central Utah Project. This trust account was 
established under Public Law 102-575, the Central Utah Project 
Completion Act with other contributions being made by all the 
Stakeholders and project beneficiaries including the State of Utah, the 
Central Utah Water Conservancy District and the Interior Department. 
Western has been providing payments into the account since 1992 on 
behalf of the power-user beneficiaries.
    Do you support ending Western's responsibilities to contribute into 
this account and transferring this funding obligation from Western to 
Reclamation, and if so why have you not built this contribution into 
your Fiscal Year 2004 Budget Request?
    Answer. Reclamation has just recently become aware of the 
Department of Energy's proposal to transfer Western Area Power 
Administration's obligation to provide funds annually to the Utah 
Reclamation Mitigation and Conservation Committee to Reclamation and is 
very concerned. Maintaining this source of funds for the Mitigation 
Commission is important to continuing the very valuable ecosystem 
improvement projects the Commission is carrying out in Utah. We would 
welcome an opportunity to work with the subcommittee, the Mitigation 
Commission, and the Western Area Power Administration on a mutually 
acceptable solution.
                 title xvi--water reclamation and reuse
    Question. The Fiscal Year 2004 Budget Request identifies that the 
Title XVI reuse project program will be funded at $12.6 million. This 
is a dramatic reduction from past years' congressional decisions. 
Please explain how the Bureau arrived at this funding level given the 
importance of providing assistance to projects that are proceeding to 
construction that depend on meaningful Federal assistance.
    Answer. Reclamation's Title XVI program, while important, does not 
serve Reclamation's core mission. Also, these projects must compete 
with other Reclamation activities and projects for funding. Because of 
Reclamation's aging infrastructure, we must be careful to ensure that 
we direct sufficient resources toward maintaining our existing 
facilities, and not just focus on building new ones.
    Question. Based on response to question 1, could you please explain 
the budget's reference to the Program Assessment Review Tool (PART). In 
your budget justification, you note that water reuse is not a ``core 
mission'' and therefore should not be a priority. This seems at odds 
with the history of the Bureau and its purpose. Could you provide me 
with an understanding of how the Administration defines the Bureau's 
mission? Please identify the individuals who conducted the PART and the 
expertise they hold in conducting such a review.
    Answer. Although the Bureau's ``core function'' has not been 
defined by law, the Administration's use of the term generally refers 
to those programs that directly focus on water delivery and/or power 
generation. The purpose of the water recycling program is to identify 
and investigate opportunities for reclaiming and reusing wastewater and 
naturally impaired ground and surface water, and to provide financial 
and technical assistance to local water agencies for planning and 
development of water recycling projects. While in this regard, it is an 
important part of the bureau's mission, budget constraints prevented 
the bureau from funding this program at higher level. Bureau staff 
worked in consultation with OMB in conducting the PART process.
                              desalination
    Question. I note that the Administration is placing new priority on 
desalination research. In its budget request, it appears that most of 
the requested research funding is slated to support this priority. Is 
this correct?
    Answer. The Science and Technology Program's total request was 
$9,305,000--of that, desalination and advanced water treatment amount 
to less than $3 million. The remaining program funds are directed to 
research that increases water delivery reliability, infrastructure 
reliability and efficiency, and decision support modeling.
    Question. How much requested funding within the Bureau-wide 
programs will be made available to support this new priority?
    Answer. Requested funding for desalination would be available from 
the following line items: Enhanced Science and Technology--
approximately $900,000 (one-third); Science and Technology's 
Desalination and Water Purification Research (cooperative research with 
external partners): $775,000; (3) Title XVI: approximately $1,000,000; 
(4) Science and Technology's Advanced Water Treatment Research 
$1,590,000. The total amount is $4,265,000. The Yuma Desalting Plant 
funded under the Colorado River Basin Salinity Control Program, Title I 
also has funding dedicated to research towards reducing its operating 
costs.
    Question. How much of the Bureau-wide programs will support water 
reuse research?
    Answer. Desalination research under the Western Water Initiative 
will be used to expand our desalination capabilities under the 
Desalination Research Act. With this additional funding, we will be 
better able to initiate several demonstration projects and expand our 
desalination clearinghouse, and facilitate coordination of all the 
parties involved with various aspects of improving desalination through 
research.
    Title XVI also authorizes research in this area. Treatment and 
subsequent reuse of impaired waters and desalination face common 
challenges as well as yielding complementary results--an increase in 
the usable supply of water. Title XVI research investments can 
simultaneously advance both reuse and desalination. It makes sense to 
fold these activities together as a part of a coordinated research 
strategy. To that end, last year we entered into an Memorandum Of 
Understanding with several interests in reuse and desalination (i.e., 
the WateReuse Foundation, American Water Works Association Research 
Foundation, Water Environment Research Foundation, and the National 
Water Research Institute) to identify common issues and coordinate 
research investments.
                 title xvi--water reclamation and reuse
    Question. Over the past several years, Congress has requested on 
several occasions that the Bureau provide us with the final reports 
detailing the Southern California Wastewater Recycling and Reuse 
Program and Bay Area Wastewater Recycling and Reuse Program? In light 
of the budget's stated priority for desalination and the further 
statement that reuse is not a ``core mission'' when can we expect that 
these reports will be transmitted to us? Should we anticipate that the 
stated budget findings on reuse means that we will receive a negative 
report?
    Answer. The Southern California Comprehensive Water Reclamation and 
Reuse Study is under Departmental review. This document is the 
culmination of a 6-year study of Southern California's water supply 
needs at a regional level and the potential for cooperative 
consideration of effective ways of matching wastewater reclamation 
opportunities with possibilities for reuse of recycled wastewater 
throughout southern California. The Department is finalizing its review 
and identifying editorial changes that will be made to the draft report 
documents prior to submission to OMB and Congress.
    You also asked about the San Francisco Bay Area Regional Water 
Recycling Program, or BARWRP study. The Administration recently 
completed its review of the BARWRP Master Plan, and has raised several 
concerns with the Master Plan. Secretary Norton will relay these 
concerns when the BARWRP Master Plan is transmitted to Congress. I 
anticipate that the report will be submitted to Congress this year.
                              sumner peck
    Question. Mr. Reid. I am very concerned about the decision to take 
budget resources away from ongoing reuse projects and other priorities 
to fund $30 million in fiscal year 2004 for the settlement agreement 
between the U.S. and Sumner/Peck. Please provide me with a specific 
itemization on where the funds for the settlement are being provided in 
relation to specific program and project funding reductions within the 
fiscal year 2004 budget request.
    Answer. No funding reductions or offsets were proposed with respect 
to fiscal year 2004 funding for the Sumner Peck settlement, Sumner Peck 
Ranch, Inc. v. Bureau of Reclamation.
                              desalination
    Question. Over the past several years, Congress has supported 
important research and technology demonstration that has direct 
industry support through industry and university cost-shared 
assistance. I note that the budget request fails to identify how the 
Bureau intends to maintain this successful program. In your response, 
please explain how any funding under the new desalination priority will 
be used to support the ongoing reuse research needs.
    Answer. The budget request will build on the success of this 
Desalination and Water Purification Research program authorized by 
Congress in the 1996 Desalination Research Act. We propose to continue 
bench and pilot studies and now embark on a few selected demonstration 
projects to test actual applications of new technologies under real 
world conditions. Some of the research will benefit both reuse as well 
as desalination. Title XVI research funding will be dedicated to 
research that benefits both desalination and reuse as well as research 
related solely to reuse questions.
                                 ______
                                 
             Questions Submitted by Senator Byron L. Dorgan
                        western water initiative
    Question. I note that you have a new ``Western Water Initiative'' 
in your Fiscal Year 2004 Budget where you are requesting $11 million. 
Who developed this initiative?
    Answer. The Western Water Initiative was developed collaboratively 
by the Office of the Secretary with a team of Bureau of Reclamation 
senior leadership and program managers. The objective was to take a 
comprehensive look at long-term water needs and show how best to 
address them.
    Question. Was it ever offered to the White House as a larger Bush 
Administration Initiative?
    Answer. Yes, it was included in the fiscal year 2004 budget 
submitted to Executive Office of the President; discussions with OMB 
and the Office of the President staff are ongoing.
    Question. Why did they decline?
    Answer. Discussions are continuing on the future scope of the 
program.
    Question. Why was rural water not a part of the Initiative?
    Answer. Rural water is currently being reviewed and refined as a 
stand-alone program. The Department is in the process of drafting 
legislation to establish a structured rural water program within the 
Bureau of Reclamation. Reclamation recognizes that a significant need 
exists in many parts of the west for a clean and safe water supply. 
Further, it is our goal to work with those communities as well as with 
other Federal, State and local entities to address those needs in a 
cost effective manner.
    Question. Do you have construction authority under this Initiative?
    Answer. Currently no new construction authority is included under 
this initiative.
    Question. Part of your money for the Western Water Initiative is to 
be spent on ``Preventing Water Management Crisis.'' Aren't you creating 
a crisis in rural water with your Budget request?
    Answer. No, the Administration conducted a Program Assessment to 
evaluate the program's effectiveness. Once the areas related to program 
effectiveness are addressed, funding for the program in the future will 
be assessed.
    We have determined that the program could be more effective and 
welcome the opportunity to work with you on some overall approach and 
goal setting for the program.
    Question. Your Environmental and Interagency Coordination 
Activities Budget and your Environmental Program Administration Budget 
are reduced from your fiscal year 2003 request. What is the reason for 
the reduction? It would appear inconsistent with your Western Water 
Initiative.
    Answer. The funding reductions to these programs are unrelated to 
the Western Water Initiative. Programs are evaluated each year and 
appropriate funds are requested according to the need.
                                  part
    Question. Could you provide the subcommittee with a copy of the 
papers on rural water that Reclamation submitted to OMB as a result of 
the PART review process that indicate your views on the rural water 
projects in the Bureau's Budget? What is Reclamation's position on 
providing rural water under Congressional authorized projects to 
Indians and non-Indians?
    Answer. I am pleased to provide the materials that Reclamation 
submitted to OMB during the PART review process.
    Reclamation recognizes that a significant need exists in many parts 
of the west for a clean and safe water supply. Further, it is our goal 
to work with those communities as well as with other Federal, State and 
local entities to address those needs in a cost effective manner. We 
also recognize the legislative requirements that Congress has placed on 
us for certain projects. However, through the PART evaluation, it was 
determined that clearly defined goals and criteria were needed in order 
to efficiently and effectively meet the needs of the beneficiaries as 
well as to stretch the limited Federal funds that are available for 
this purpose. The Department is in the process of preparing a 
legislative proposal which the Administration plans to submit to 
Congress to provide the programmatic structure and guidance that is 
necessary to move this effort forward.
                        rural water legislation
    Question. When the Secretary of the Interior appeared before the 
Senate Energy and Natural Resources Committee a couple of weeks ago on 
the Department's Budget, she made reference to the Department 
developing some proposed legislation on rural water. Can you provide 
some details on that proposal and the time frame for sending it to 
Congress? Will the Dakota Water Resources Act of 2000 be exempt from 
this legislation?
    Answer. The Department is in the final stages of drafting 
legislation to establish a structured rural water program within the 
Bureau of Reclamation. While Reclamation has been directed by Congress 
to plan, develop and construct 13 specific and individual rural water 
projects since 1980, we have been extremely limited in our ability to 
work with these and other communities that are in need of assistance 
prior to the passage of the specific project authority. This has 
resulted in inefficiencies and increased costs. It would establish 
overarching programmatic goals, set criteria and provide greater 
coordination among the various Federal, State and local programs 
related to rural water.
    It is unclear at this point whether the Administration's proposed 
legislation would exempt the Dakota Water Resources Act of 2000. Many 
of the projects and activities authorized in that Act are underway and 
we are working diligently with the State, the Garrison Diversion 
Conservancy District and the other entities in the region on these 
activities. As the proposed legislation moves to Congress, we look 
forward to working closely with you and other members with an interest 
in this important issue.
    Question. From your description of the legislation, it would appear 
that what we are doing in North Dakota under the Dakota Water Resources 
Act would be a model for your legislation. Would you agree?
    Answer. There are some aspects of the Dakota Water Resources Act 
that could be useful as a model for Reclamation's rural water program 
and we are looking carefully at how that program and others have worked 
to date.
    Question. Why was no funding provided for the MR&I program for the 
Garrison Project?
     Answer. The Garrison Diversion Unit was authorized August 5, 1965, 
amended in 1986 by the Reclamation the Garrison Reformulation Act, and 
further amended by the Dakota Water Resources Act of 2000. One of the 
components of the Garrison Diversion Unit is several MR&I projects in 
North Dakota that would serve several communities including four Indian 
reservations.
    Reclamation's rural water projects, including those in North and 
South Dakota, were rated under the Program Assessment Rating Tool 
(PART) and received a rating of ``Results Not Demonstrated.'' OMB found 
through the PART and Common Measures exercises that Reclamation's 
program needs stronger controls for project development, and that 
``lack of agency involvement during project development may result in a 
project that is not in the best Federal interest.'' OMB recommended 
that legislation be introduced which establishes a Reclamation rural 
water program with adequate controls and guidelines, and indicated that 
funding would be scaled back, including GDU MR&I programs, until such 
controls and guidelines were in place.
                             underfinancing
    Question. Can you discuss the consequences of under-financing the 
water projects under construction in the Reclamation program?
    Answer. The amount of underfinancing requested by Reclamation 
represents about 4 or 5 percent of the total scheduled program. We can 
reasonably expect to absorb that amount during a normal year due to 
non-budgetary delays. This is based on historical experience with such 
things as bad weather, construction delays, and environmental issues 
with projects.
    Question. Are we going to find project sponsors coming in and 
asking for more money than they need because of this issue, just so 
they can go to bid on contracts?
    Answer. I am not aware of any.
    Question. How does this affect the Garrison Project?
    Answer. At this point in time, we are not expecting any major 
delays to the Garrison Diversion Unit in fiscal year 2003 or 2004 due 
to underfinancing. Underfinancing is always applied in the manner that 
will cause the least negative impact.
    Question. How do they make up for this funding in their contracts 
for work?
    Answer. In a normal fiscal year, Reclamation has an appropriation 
available from Congress at the start of October, and has completed the 
process of identifying likely slippages in accomplishment by the end of 
November or December. General slippages are recovered in the next 
construction season.
    Question. Is this figure spread evenly across-the-board to every 
line in the Bureau's Budget?
    Answer. No, underfinancing will first be applied to projects and 
programs that are experiencing slippages due to the factors, such as 
construction issues, weather problems and environmental compliance 
issues.
                    interior's trust responsibility
    Question. What is Reclamation's view of carrying out the Department 
of the Interior's Trust responsibility to the four Tribes in North 
Dakota when it comes to water?
    Answer. Reclamation takes its trust responsibility to Native 
American Tribes seriously as we carry out the agency's programs. Water 
development for the benefit of tribes is generally, in and of itself, 
not considered as a trust responsibility, except perhaps where 
Reclamation may be involved in implementing Indian water right 
settlements. As we implement the issues raised by the Rural Water PART 
recommendation, the Administration will address existing rural water 
authorizations, including the planning, design, construction, and 
operation and maintenance of rural water systems on the Standing Rock, 
Spirit Lake, Fort Berthold, and Turtle Mountain Indian Reservations.
    Question. Some might say that by delaying or not funding Indian 
projects, it postpones a future Operation and Maintenance cost in the 
Bureau's Budget with regard to Indian water projects? Is this true?
    Answer. Yes, an indirect effect of delaying or not funding the 
construction of Indian water projects will result in fewer facilities 
and a smaller increase in operation and maintenance costs in the 
Reclamation's budget for that year.
                            red river valley
    Question. Can you discuss the status of the studies for the Red 
River Valley? I am told that the Garrison Conservancy District and the 
Bureau have developed an understanding on time frames and we should 
know more later this year whether the schedule is working. Is that 
true?
    Answer. Yes, Reclamation is diligently working with Garrison 
Diversion Conservancy District, the State agency designated by the 
Governor of North Dakota as their representative, to jointly prepare 
the Environmental Impact Statement. We are on schedule to complete the 
Environmental Impact Statement by December 2005.
    Reclamation has several Environmental Impact Statement activities 
currently underway which include agency consultations, identification 
of purpose and need, developing a process for screening alternatives 
for detailed study, and data collection to define the affected 
environment. Needs and Options activities in fiscal year 2003 include 
data collection of historic water use, projecting future population, 
estimating future water needs, biota transfer studies, developing cost 
estimates for alternatives to be evaluated in the EIS, and conducting 
follow-up water user meetings to determine interest in the proposed 
project. Aquatic needs and recreation needs studies will also be 
completed this year. The naturalized flow database will be completed, 
models selected, and modeling initiated to determine available water 
sources and to identify shortages.
                       reclamation's core mission
    Question. Mr. Keys, in your testimony, you stated that your fiscal 
year 2004 request has been designed to support Reclamation's core 
mission, which you said was to: ``Deliver Water and Hydropower, 
Consistent with Applicable State and Federal Law, in an Environmentally 
Responsible and Cost Efficient Manner.'' But I would argue that your 
budget does not support this mission this year. A good example is how 
it funds projects designed to deliver water to communities and Tribes 
through the municipal, rural and industrial water programs authorized 
under the Dakota Water Resources Act. Under-funding water projects in 
the budget request for the last several years--and particularly the 
drastic cut in the fiscal year 2004 budget that you are presenting here 
today--is neither cost efficient nor environmentally responsible. The 
quality of the water that those on Indian reservations in my State must 
deal with poses a real risk to health and safety. I have pictures of a 
6-month-old baby bathing in dirty water that is the color of coffee, 
and of people hauling water to many on the reservation that currently 
have no water supply. The water that is wasted when the Tribe tries to 
fill water bottles from a big tank with a hose is incredible, and the 
Tribe regrets that it does not have the resources for a more efficient 
system to preserve more of its precious water. Since you are not 
funding water delivery projects in North Dakota in a cost-effective and 
environmentally responsible manner, can you tell me some other ways 
that your fiscal year 2004 budget supports this mission?
    Answer. The President's fiscal year 2004 request for the Garrison 
Diversion Unit in North Dakota is $17.314 million. It includes funding 
that will support activities such as the continued progress on the Red 
River Valley Water Supply Study and Environmental Impact Statement; 
construction of the Standing Rock Irrigation project; operations and 
maintenance of the Oakes Test Area; minimum maintenance to assure 
reliability of completed facilities; management of approximately 22,100 
acres of Wildlife Development Areas and 34,862 acres at Lonetree Game 
Management Area and Kraft Slough developed to mitigate project impacts 
and enhance the environment; and ongoing work to mitigate project 
impacts on the Audubon and Arrowwood National Wildlife Refuges.
    In addition, it provides funding to carry out the Secretary's 
responsibilities to operate and maintain the existing rural water 
facilities on the Standing Rock, Spirit Lake, Fort Berthold, and Turtle 
Mountain Indian Reservations. Funds are also provided to continue 
operation, maintenance, and replacement activities at Jamestown Dam and 
Reservoir.
    The President's request also includes funding to continue 
operation, maintenance and replacement activities at Heart Butte Dam 
and Reservoir and Dickinson Dam and Reservoir. Project benefits include 
flood control, irrigation, and recreation, fish and wildlife. Heart 
Butte reservoir provides a water supply for 7,188 acres of irrigation 
along the Heart River.
                     science and technology budget
    Question. What role does your Science and Technology Budget play 
with regard to the rural Western States?
    Answer. Within the Science and Technology (S&T) budget the Advanced 
Water Treatment line item is largely directed to research that benefits 
rural and Native American communities' water supply and treatment 
needs. For example, we are researching questions and developing 
desalination and water reuse technologies with an eye toward making the 
systems affordable, reliable, and appropriate for rural areas that need 
clean and safe potable water supplies. The S&T budget is primarily 
directed to research that benefits all of the western States in that it 
has application across Reclamation. The S&T program uses a steering 
committee to identify research needs and establish relative priorities 
across the Bureau. Our Great Plains office, which represents the lion's 
share of rural States, has a representative on that committee. In 
addition, each region receives a portion of S&T funding to direct to 
region-specific priorities.
                           drought assistance
    Question. In your budget document you state ``Requests for 
emergency and planning drought assistance out weigh the funding 
available. There are still many interested States and tribes that have 
not developed drought contingency plans focusing on preparedness, 
mitigation, and response activities.'' Why do you continue to request 
such a little amount of money for this area ($900,000) when Congress 
repeatedly provides 4 and 5 times that amount when we finish with your 
budget?
    Answer. Throughout the budget planning process, Reclamation must 
balance the multiple priorities of the budget against a number of 
factors, including the multiple priorities of the Department of the 
Interior. The requested amount represents a balance between this and 
other priority activities. The requested level of funding will meet the 
needs that are anticipated, keeping in mind that budgets are prepared 
as much as 2 years in advance. However, depending upon weather 
conditions, greater need and therefore greater requests have been 
received in recent years. When drought conditions have been most severe 
and demand is greater then the funds available, as has been the case 
over the past few years, we have directed the appropriated funds to 
emergency response, although we consider planning to be an important 
aspect of mitigating the effects of the continuing drought conditions 
in the West.

                          SUBCOMMITTEE RECESS

    Senator Cochran. Commissioner Keys, it is good to have a 
westerner who talks with a southern accent and I am glad 
Sheffield, Alabama, taught you how to say things right.
    Mr. Johnston, we appreciate your presence this morning and 
your contribution and your statement.
    Thank you all very much. The hearing is recessed.
    [Whereupon, at 12 noon, Wednesday, March 5, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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