    [Senate Hearing 108-224]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 108-224

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2004
    =======================================================================

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 FIRST SESSION

                                       on

                               H.R. 2754/S. 1424

     AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2004, AND FOR OTHER PURPOSES

                                   __________

                          Department of Defense--Civil
                              Department of Energy
                           Department of the Interior
                           Nondepartmental witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

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                                     senate
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                          COMMITTEE ON APPROPRIATIONS

                         TED STEVENS, Alaska, Chairman
    THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
    ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
    PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
    CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
    MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
    CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
    RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
    JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
    ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
    BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
    LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
    KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
    MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
    SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
                        James W. Morhard, Staff Director
                     Lisa Sutherland, Deputy Staff Director
                  Terence E. Sauvain, Minority Staff Director
                                     ------

                  Subcommittee on Energy and Water Development

                     PETE V. DOMENICI, New Mexico, Chairman
    THAD COCHRAN, Mississippi            HARRY REID, Nevada
    MITCH McCONNELL, Kentucky            ROBERT C. BYRD, West Virginia
    ROBERT F. BENNETT, Utah              ERNEST F. HOLLINGS, South Carolina
    CONRAD BURNS, Montana                PATTY MURRAY, Washington
    LARRY CRAIG, Idaho                   BYRON L. DORGAN, North Dakota
    CHRISTOPHER S. BOND, Missouri        DIANNE FEINSTEIN, California

                               Professional Staff

                                   Clay Sell
                                  Tammy Perrin
                            Drew Willison (Minority)
                           Nancy Olkewicz (Minority)

                             Administrative Support
                                  Erin McHale

                                C O N T E N T S

                                  ----------

                            Wednesday, March 5, 2003

                                                                       Page
    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................     1
    Department of the Interior: Bureau of Reclamation................    85

                           Wednesday, March 12, 2003

    Department of Energy:
        Office of Science............................................   125
        Office of Energy Efficiency and Renewable Energy.............   142
        Office of Nuclear Energy, Science and Technology.............   152

                             Monday, April 7, 2003

    Department of Energy:
        Office of Environmental Management...........................   189
        Office of Civilian Radioactive Waste Management..............   205

                            Thursday, April 10, 2003

    Department of Energy: National Nuclear Safety Administration.....   247

                           Nondepartmental Witnesses

    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................   301
    Department of the Interior: Bureau of Reclamation................   414
    Department of Energy.............................................   450

        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.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                           WEDNESDAY, MARCH 12, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:32 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Pete V. Domenici (chairman)
    presiding.
        Present: Senators Domenici, Craig, and Dorgan.

                              DEPARTMENT OF ENERGY

                               Office of Science

    STATEMENT OF DR. RAYMOND L. ORBACH, DIRECTOR

                 OPENING STATEMENT OF SENATOR PETE V. DOMENICI

        Senator Domenici. The Senator from Nevada will probably be
    along shortly. Senator Craig, nice to have you here.
        Today the subcommittee is going to review the Department of
    Energy's fiscal year 2004 budget request for, one, the Office
    of Energy Efficiency and Renewables, and the Office of Science
    and the Office of Nuclear Energy. In that regard, we will hear
    from Dr. David Garman, Assistant Secretary for Energy
    Efficiency and Renewable Energy. We will hear from Dr. Ray
    Orbach, Director of the Office of Science, and Mr. Bill
    Magwood, the Director of the Office of Nuclear Energy and
    Science Technology.
        All of these witnesses have appeared before the
    subcommittee before and are well known to us. We look forward
    to your testimony today.
        Let me summarize just a moment. It will not take me very
    long, Senator Craig, and then we will go right to the
    witnesses.
        The budget request for renewable energy under Mr. Garman is
    $444 million, an increase of $24 million, about 6 percent over
    the current year. However, more than all of the increases put
    toward the President's initiative, an initiative that may
    displace much of our dependence on foreign oil in years to
    come, the so-called hydrogen research for the hydrogen car.
        Under this subcommittee, we would more than double the
    amount spent for that endeavor to $88 million. Unfortunately,
    many of the traditional areas of renewable research, such as
    biomass, renewable research, geothermal and wind, are proposed
    to be cut. And that is below current levels in order to fund
    this initiative. I am not sure that will hold. But somehow or
    another, we will work it out.
        I continue to believe in the importance of the balanced
    portfolio. Our country must increase the diversity of energy
    production in order to reduce our dependence upon unstable
    sources of foreign energy. Under any scenario, renewable energy
    technologies will play a dramatic role in our energy future,
    recognizing the priorities of the administration, while
    continuing to address the priorities of many of the Senators on
    this subcommittee may prove to be a real challenge this year.
        However, in addition to what we just talked about, the
    budget request for nuclear energy has elements of both good
    news and bad news. For me, the most notable new development,
    and Larry Craig, I think you would be interested in this, is
    the administration's request for $63 million to continue the
    advanced fuel cycle initiative. I am very pleased that someone,
    somehow, has worked through the Office of Management and
    Budget, and the Executive Branch has finally recognized that
    this is a truly long-term initiative of great significance. And
    the sooner we start, the sooner we will find out if and when it
    will be available as part of the nuclear cycle.
        We have long believed that the country must move ahead to
    the next generation of fuel cells that generate less waste,
    extract full energy benefit from each gram of fuel. This is a
    long-term effort that requires a much larger investment by the
    Department.
        Senator Reid and I have worked hard in our position of
    chairman and ranking member and vice versa in this effort the
    last few years. And to see the administration embrace the
    importance is truly gratifying.
        Generally, the whole area of R&D is a mix of good news and
    some of bad news. The administration, with much help from this
    subcommittee, has begun to correct many years of neglect. The
    Department has now in place the structure of a well thought-out
    R&D program and addresses the near-term goal of bringing a new
    plant online through nuclear power in 2010 while performing the
    R&D necessary for nuclear power to support growing demand for
    worldwide electricity over the next 50 years, a Generation IV
    program and advanced fuel cycle initiatives.
        However, the request is not all good news, as the
    Department proposes the elimination of new funding for the
    Nuclear Energy Optimization Program. And perhaps you will
    address that for us a bit. I know you work for the
    administration. Nonetheless, we would appreciate your
    evaluation for us as to what that does to the program; that is
    the program of continued and maximum use of nuclear power
    plants.
        Finally, the budget request for the Office of Science, it
    is only a little better than flat for the coming year. The
    Department of Energy is the Federal Government's largest
    supporter of physical science. And as such, I remain concerned
    about the tremendous imbalance in the Government's investment
    in physical sciences versus life sciences. NIH's budget has
    doubled in 5 years, while DOE's science can probably claim and
    prove that it has been slightly higher than inflation.

                              PREPARED STATEMENTS

        Past successes in biomedicine have been built upon the
    strong foundation of the physical and computational sciences
    that are present in DOE. However, we will not be equipped to
    take advantage of these remarkable new opportunities in
    genomics, nanotechnology, and advanced materials and other
    areas unless we increase the funding for DOE science.
        The rest of my statement can be made a part of the record.
    Senator Cochran has a statement. It will be made a part of the
    record immediately following mine.
        [The statements follow:]
                 Prepared Statement of Senator Pete V. Domenici
        Today, the Subcommittee will review the Department of Energy's
    fiscal year 2004 budget request for the Office of Energy Efficiency and
    Renewable Energy; the Office of Science; and the Office of Nuclear
    Energy.
        In that regard, we will hear from Mr. David K. Garman, Assistant
    Secretary for Energy Efficiency and Renewable Energy; Dr. Ray Orbach,
    Director of the Office of Science; and Mr. Bill Magwood, Director of
    the Office of Nuclear Energy, Science and Technology.
        All of the witnesses have appeared before the subcommittee before
    and are well known to us. We look forward to your testimony today.
        This is the Subcommittee's second hearing this year but our first
    opportunity to review the Administration's budget request for the
    Department of Energy. Overall, the Administration is seeking $21.7
    billion for programs and activities of the Department within the
    jurisdiction of this subcommittee. That is a $785 million increase over
    the current year enacted level of $20.89 billion (or approximately 4
    percent).
        That increase appears reasonable, but it must be viewed in its
    proper context. Almost all of the increases for the Department occur in
    the nuclear weapons and nonproliferation programs of the NNSA, in the
    Department's environmental clean-up programs, and in proposed funding
    for the Yucca Mountain project.
        The programs we are reviewing today, which make up just over $4
    billion of the Department's budget, would increase by less than
    inflation, or 2 percent over the current year enacted level.
        The budget request for renewable energy research under Mr. Garman
    is $444 million, an increase of $24 million (6 percent) over the
    current year level. However, more than all of the increase is put
    toward the President's exciting hydrogen initiative that may displace
    much of our dependence on foreign oil by 2020. Hydrogen research under
    this subcommittee would more than double to $88 million in fiscal year
    2004.
        Unfortunately, many of the traditional areas of renewable research,
    such as biomass, geothermal and wind, are proposed to be cut below
    current year levels in order to fund the President's agenda.
        I continue to believe in the importance of a balanced energy
    portfolio. Our country must increase our diversity of energy production
    in order to reduce our dependence on unstable foreign sources of
    energy. Under any scenario, renewable energy technologies will play a
    dramatic role in our energy future. Recognizing the Administration's
    priorities while continuing to address the priorities of many Senators
    on this subcommittee may prove to be a real challenge this year.
        Likewise, the budget request for Nuclear Energy has elements of
    both good news and bad news. For me, the most notable new development
    is the Administration's request for $63 million to continue the
    Advanced Fuel Cycle Initiative.
        I have long believed that the country must rapidly move ahead with
    a next-generation fuel cycle that generates far less waste and extracts
    the full energy benefit from each gram of fuel. This is a long-term
    effort that requires a much larger investment by the Department.
    Senator Reid and I have worked hard to sustain this effort for the last
    several years and I am pleased to see the Administration embrace this
    important initiative.
        I am generally encouraged with the progress in nuclear R&D. The
    Administration, with much help from this subcommittee, has begun to
    correct many years of neglect. The Department now has in place the
    structure of well-thought-out nuclear R&D program that:
      --addresses the near-term goal of bringing a new plant on line
            through the Nuclear Power 2010 program;
      --while performing the R&D necessary for nuclear power to support the
            growing demand for electricity world-wide over the next 50
            years through the Generation IV Program and the Advanced Fuel
            Cycles Initiative.
        However, the request is not all good news, as the Department
    proposes elimination of new funding for the Nuclear Energy Plant
    Optimization program and a 50 percent cut to the well regarded Nuclear
    Energy Research Initiative. We will address these concerns and others
    as best we can.
        Finally, the budget request for the Office of Science remains only
    a little better than flat for the coming year.
        The Department of Energy is the federal government's largest
    supporter of physical sciences. As such, I remain concerned about the
    tremendous imbalance in the government's investments in the physical
    sciences verses the life sciences. For example, NIH's budget has
    doubled in 5 years while DOE Science cannot even keep up with
    inflation.
        Past successes in biomedicine have been built upon the strong
    foundation of the physical and computational sciences. However, we will
    not be equipped to take advantage of remarkable new opportunities in
    genomics, nanotechnology, advanced materials, and other areas unless we
    increase funding in DOE Science.
        Each of the program areas before us today will present unique
    challenges and opportunities for this subcommittee. I will look forward
    to engaging each of our witnesses today and working with the Senator
    Reid and the members of the Subcommittee to put together the best
    possible bill.
        I will yield now to Senator Reid and any other Senator that would
    like to make an opening statement.
        Thereafter, we will hear from Mr. Garman, Dr. Orbach, and finally
    Mr. Magwood.
                                     ______

                   Prepared Statement of Senator Thad Cochran
        Mr. Chairman, I'd like to thank the Undersecretary and Directors
    for testifying before this committee today. The work you do is very
    important to my state and to me. I'd like to commend David Garman, the
    Director of the Office of Energy Efficiency and Renewable Energy, for
    the work he does with biomass research.
        This scientific research is so important to a rural, agricultural
    state like Mississippi. Biomass energy is estimated to contribute over
    7 percent of Mississippi's total energy consumption--that amount is
    double the national average. The majority of our lumber facilities burn
    wood waste to generate steam for industrial processes. Biomass offers
    special opportunities for benefitting Mississippi's economy by keeping
    energy dollars in our state and by providing jobs in rural areas where
    biomass is produced. By using their wastes for energy, disposal costs
    are avoided, and industries are better able to compete.
        The principal biomass waste streams that occur in Mississippi are
    generated by agriculture (e.g., cotton gin waste), wood products
    manufacturing (e.g., sawdust and wood scraps), animal wastes from
    confined feeding operations, and municipal solid waste collections
    (e.g., paper and cardboard, demolition waste, lawn and tree trimmings).
        Last year I visited a biomass plant in Winona, Mississippi and
    inquired about plans for using federal funds that were appropriated in
    the fiscal year 2003 omnibus bill. I learned that the Winona biomass
    project can enter its final stages of discovering the organism which
    will cause the heated biomass to turn into gas. Once that organism or
    ``bug'' is discovered, the plant can operate from start to finish where
    chips of wood can be input, burned and then gasified into ethanol. In a
    town like Winona, that sort of success has great economic development
    potential.
        I am pleased to learn that the Department is concentrating its
    biomass research efforts on the catalysts needed for biomass gasifiers.
    Many communities, beyond the scientific community, will benefit from
    this work.
        I would also like to commend the Mississippi Diagnostic
    Instrumentation and Analysis Laboratory at Mississippi State
    University. I am pleased to see that you're funding good science, like
    the joint Los Alamos-Mississippi State project that we hope will be
    useful for both DOE and Homeland Security. A continuing concern is how
    do we take this magnificent science and turn it into the new
    technologies DOE needs to accelerate cleanup. I am hopeful that you
    consider using organizations such as DIAL at Mississippi State to turn
    your science into technologies that will be used at the DOE sites.
        Mr. Chairman, with your permission I have a question I'd like to
    submit for the record.

        Senator Domenici. And I yield now to Senator Larry Craig
    for his comments. And then we will take the witnesses.
        Senator Craig.

                        STATEMENT OF SENATOR LARRY CRAIG

        Senator Craig. Well, thank you, Mr. Chairman. I will be
    brief. And I do appreciate a chance to speak now. I have to
    pull out about 3:00 to attend something else.
        But first of all, I want to visit Bill Magwood. We have
    been working very closely since Secretary Abraham announced
    that the INEEL and Argonne-West would be DOE's lead lab for
    nuclear energy. And certainly the chairman has been a leader in
    advancing this cause for some time. He spoke to it a few
    moments ago.
        But I do appreciate the hard work that you have put into
    the transition at the Idaho National Engineering Environmental
    Laboratory and the new mission that we are talking about. I
    have looked at the administration's budget request for nuclear,
    and I am pleased by what is there. It is much improved. The
    chairman just mentioned it. The previous administration had
    pretty much zeroed things out. If we are going to advance the
    cause of nuclear in the next generation, we have to get at it.
    You are getting at it, and we appreciate that.
        Obviously last year, the Chairman and I met with you, the
    Vice President, Secretary Abraham. And we talked about
    Generation IV reactor development, to get it beyond the design
    or the study on papers to the actual step forward. And clearly,
    that is what we are about now. And we thank you for that. And,
    Mr. Chairman, I lay a great deal of the effort to your credit
    for the work you have done there.
        But we must keep trying to fix the Argonne layoff
    situation. It is unacceptable to do it, if we are going to try
    to grow nuclear. You do not fire one year and hire the next
    year, when you have top quality scientists on board ready to
    go. And that is really an issue that I think has to get
    resolved as we move forward.
        Dr. Orbach, I do appreciate your presence. I have read your
    testimony. Although the Office of Science program does not have
    a large presence in Idaho, you are doing a lot of extremely
    valuable work. I want to highlight one area, and that is fusion
    energy. Yesterday I introduced the Fusion Development Act of
    2003. Senator Dianne Feinstein and I have worked cooperatively
    on that as cosponsors. President Bush has been focused on the
    movement of this Nation in a clean, sustainable hydrogen
    economy. That is certainly important.
        We have invested a fair amount in it so far, and we are a
    ways down the road toward that. Obviously, continued
    development and infrastructure become a major hurdle to
    overcome. The President has acknowledged that fusion energy, if
    we can make it practical and affordable, will be one of the
    ways to get us to that hydrogen future. The other way is,
    obviously, nuclear energy. And I will be working on that front
    as well, as we work to craft this bill.
        David, it is great to have you back before us. Between this
    committee and the Energy Committee, we have been seeing you
    quite often here on the Hill. And that is always appreciated.
    The work you have done in the past year and of course the work
    you did for Senator Murkowski is well recognized.
        We also had you recently on a visit to Idaho. And I
    appreciate your effort to take the time to better understand
    what we do out there and the kind of work that goes on. And
    while you were there, I suspect you heard us talk about some
    agriculture and some bioenergy initiatives.
        The issue that the Governor, while Senator, worked with me
    on was fish-friendly turbines. They say it cannot be done. And
    while some of our friends do not like to admit it, the
    adjustment and the management of the Snake and the Columbia
    River systems is beginning to establish record fish runs. We
    have clearly stopped the decline in five of these critical
    species. And there is now movement upward. And part of that is
    beginning to understand, manage the river, retrofit many of
    these hydro facilities with fish-friendly turbines. That work
    began at Bonneville. It is working upriver. And it is
    critically important to the West, to all of us, and to the
    fisheries of our country.
        So thank you very much for being here. We look forward to
    your testimony.
        Mr. Chairman, thank you.

                    PREPARED STATEMENT OF SENATOR HARRY REID

        Senator Domenici. Thank you, Senator.
        Senator Reid's statement will also be made a part of the
    record.
        [The statement follows:]
                    Prepared Statement of Senator Harry Reid
        Thank you, Mr. Chairman. I am glad to see that you are feeling a
    little better than you did last week. Senator Cochran filled in nicely
    for you at the hearing, but we all missed you.
        Today is the second in a series of five budget oversight hearings
    for the Energy and Water Development Subcommittee. Last Wednesday, the
    Subcommittee heard testimony from the Bureau of Reclamation and the
    U.S. Army Corps of Engineers.
        Today we will hear from three witnesses:
      --Dr. Raymond Orbach, the Director of DOE's Office of Science;
      --Mr. Bill Magwood, the Director of the Office of Nuclear Energy; and
      --Mr. Dave Garman, the Assistant Secretary for the Office of Energy
            Efficiency and Renewable Energy.
        Good afternoon, gentlemen, thank you for coming. Senator Domenici
    and I both appreciate you taking the time to join us. My duties on the
    Floor may require me to depart early today, but my staff will remain
    here and will report back on what transpires. I do have a series of
    questions for each of you and would ask, at this time, that they be
    made a part of the record. I hope each of you can respond quickly
    because the Chairman and I rely on your answers to help us make
    informed funding decisions.
        I plan to keep my comments very brief today, but do want to
    highlight several issues concerning the budget requests for each of the
    three DOE offices represented today.
        Dr. Orbach, I have reviewed the budget for the Office of Science
    and, by and large, I suspect that you and I share some of the same
    frustrations with it. The administration's budget request provides your
    office with a mere 1.4 percent increase. While I am somewhat comforted
    by the notion that the ramp-down in construction funding for the
    Spallation Neutron Source actually allows a research budget increase of
    closer to 4.5 percent, my overall impression is that the request is
    weak and shortsighted.
        I hope that we are able to improve on that a little bit before
    Congress completes work this year. As I have said many times before,
    funding for research in the hard sciences is one of the very best and
    most appropriate investments of taxpayer dollars that Congress can
    make. Very few things that we do here can make our country safer or
    more secure than maintaining a scientific and technological edge.
        For many years now Chairman Domenici and I have watched as the last
    two administrations have sent ever-escalating budget requests up here
    for the National Institutes of Health that have far outstripped the
    increases requested for the Office of Science. The imbalance between
    funding for the physical science and the biological sciences was
    getting to be staggering, particularly because both disciplines rely on
    each other so much.
        This year, the disparity has lessened, but not in the way I had
    hoped. Rather than the usual 14-15 percent increase for NIH, the
    administration has chosen to request an additional 7-8 percent. Again,
    over the long-term, this is very short-sighted.
        I am, however, pleased that the administration has decided to take
    the long view on another important international effort, though.
    Earlier this year, the administration announced that the United States
    would re-join the international burning plasma fusion program, the so-
    called ITER project. This was a wise decision that I hope will be
    followed-up with robust budget requests.
        I am also very pleased with the work you are doing on the Genomes
    to Life Program and with the impressive pace of the nanotechnology
    program.
        You have been on the job now for nearly a year to the day and I
    hope you are enjoying your time in one of the greatest jobs our Federal
    Government has to offer.
        Mr. Garman, my guess is that we are going to hear a lot from you on
    the subject of hydrogen today. The administration's initiative has
    certainly gotten a lot of attention, both positive and negative.
        My inclination is to try to be as supportive as possible. I am
    pleased that the administration has decided to tackle a big, long-term
    renewable energy effort to complement the shorter-term focus on the
    deployment of promising technologies that dominates much of the rest of
    your budget.
        My staff has been talking to me about the potential of the
    ``hydrogen economy'' for years, so I want to help as best I can.
    Obviously, the devil will be in the details in how this program comes
    together, but those are details that we can work out as we move
    forward.
        One immediate concern that I do have is that it appears that you
    cut many of your other programs in order to accommodate the increases
    for hydrogen. Particularly hard-hit is your geothermal program, which
    is down $16 million.
        I realize that you were probably told to go find the additional
    dollars for hydrogen at the very last minute, long after you thought
    your budget had been put to bed, but ultimately, your overall portfolio
    must be balanced.
        Good luck as you move forward.
        Mr. Magwood, as you know I have been very supportive of your
    programs during my years as Chairman and Ranking Member of this
    Subcommittee. I am supportive even though it sometimes puts me in an
    awkward spot due to that very visible word ``nuclear'' in your office's
    title.
        I support strong budgets for you because, as I mentioned earlier,
    long-term, stable, investments in scientific research and development
    is what makes our Nation strong.
        My biggest problem with nuclear power comes at the end of the fuel
    cycle. However, I firmly believe that investments in the future of
    nuclear power can produce reactors that are safer and will not produce
    the deadly waste streams that plague the current generation of
    reactors.
        To the extent that there will be an on-going waste stream, it will
    be investments in the science that solves all or most of the disposal
    problem.
        This is why I am pleased that your Advanced Fuel Cycle Initiative
    seems to be coming along nicely. Senator Domenici and I both have been
    interested in transmutation of waste for years, so we are both pleased
    that the Department is preparing to invest some resources in this area.
        I need to be careful not to steal too much of Chairman Domenici's
    thunder in talking about what I know to be one of his favorite
    programs, so I will stop here.
        Again, thanks to our witnesses for appearing today.

        Senator Domenici. Let us proceed then with the witnesses.
    Let us start with Dr. Orbach.

                         STATEMENT OF RAYMOND L. ORBACH

        Dr. Orbach. Thank you, Mr. Chairman.
        Senator Domenici. You are welcome.
        Dr. Orbach. I would like to thank you and the members of
    the committee for your support for the Department of Energy and
    specifically the Office of Science. This is the beginning of my
    second year now as director. And I have enjoyed my relationship
    with you very much.
        I hope I can submit my testimony for the record and just
    make a few comments and introductions.
        The investment of basic research of the Office of Science
    supports the work of more than 8,000 researchers and students
    at more than 250 universities and Department of Energy
    laboratories. This year we reached 18,000 users of our
    facilities. Our budget, as we have submitted it to you, is
    roughly half for the operation of those facilities, and then
    the other half for the research that is carried out across the
    country, and indeed the world. That half is about equally
    divided between universities and laboratory personnel.
        We support as much research in the universities as we do in
    the laboratories. All of that, both the components for
    university and laboratories, are competed together with the
    peer review process, so that everybody has an equal chance at
    funding. Just because someone is in a research laboratory does
    not mean that they have an advantage over anyone else.
        The Office of Science is privileged to be responsible for
    these large facilities. We think we complement the national
    effort because of our commitment to long-term funding, high
    risk with high payoff, and multidisciplinary teams.
        Just to comment on our highlights of the budget, the areas
    that are priorities for the Office of Science; Senator Craig,
    as you have noticed, we have joined ITER now as a partner. We
    are pleased to take our place as a partner in this very
    important development. The consequences of fusion energy are
    recognized in the National Energy Policy on an abundant and
    clean source of energy.
        High-performance computation remains a high priority. This
    budget contains $14 million to begin looking at different
    architectures so that we can find the structures that will
    enable us to solve major problems, scientific discovery through
    simulation and computation. We are working now with three, and
    we hope four, vendors to try their structures out on real
    science problems that we want to solve.
        The Spallation Neutron Source, which will be the leading
    source for neutron science in the world for at least a decade
    or more, now that Europe has decided not to go in this
    direction, is well under way and on track and on budget. We
    look forward to that operation giving the United States primacy
    again in neutron science.
        Four of our five nanotechnology centers currently are
    contained within the fiscal year 2004 budget. Nanotechnology is
    an opportunity that the Office of Science is pursuing
    aggressively. We are pleased that our scientists will have
    access to these world-class facilities that are nowhere else
    found but in the United States.
        The life sciences, the Genomes to Life program is
    proceeding well. I want to thank you, Mr. Chairman, for your
    support for this program. We are now expanding it to produce
    the energy requirements that this country faces and also to
    help with carbon sequestration.
        Finally, in this budget there is a new initiative for
    teacher education, for workforce development. We have a line
    item that will enable us to bring, on a pilot basis, teachers
    to our laboratories where we will work with them during the
    summer and then follow up in their classroom, providing support
    for them.
        A program like this used to exist in the mid-1990's, and we
    are anxious to begin it again. We have quantitative evidence
    that the students whose teachers have gone through this program
    fare much better on examinations in both science and
    mathematics than a comparable category, a control group, of
    students whose teachers had not experienced these
    opportunities.
        We have had some major accomplishments this year. We are
    very proud of Mr. Raymond Davis, Jr., for receiving the Nobel
    Prize in physics for his work on neutrinos. I think it marks
    the beginning of development in cosmology where we will be
    working at the very small in order to predict the behavior of
    the very large. Mr. Davis' citation from the Nobel Committee
    points that out as the beginning of the relationship between
    the experiments we do here on Earth and what we observe at the
    very large.
        Finally, we have, through our materials program and our
    nanotechnology program, been able to accomplish something I
    think that all of us should take pride in, and that is
    restoring sight. We have been able to implant a small chip in
    the retina of a person who lost their sight over 30 years ago.
    By use of our materials sciences--this is not a simple task to
    keep electrical contacts stable in the vitreous humor of the
    eye--that person was able to see.
        So far, we are operating only at a small number of pixels,
    only 16. But we have underway a 1,000-pixel implant, which will
    enable a person who was blind to read a large-print newspaper.
    Over 200,000 Americans each year suffer from retinal disease.
    This program, we hope, will combine the material science
    characteristics of the Office of Science with the medical
    profession, showing again how the physical sciences can aid the
    medical profession in accomplishing their goals.

                               PREPARED STATEMENT

        This is a great opportunity for us to present our programs
    to you. I want to thank you again for your support. This
    concludes my testimony. I will be pleased to answer questions.
        Thank you.
        Senator Domenici. Thank you very much. Your statement will
    be made a part of the record.
        [The statement follows:]
                    Prepared Statement of Raymond L. Orbach
        Mr. Chairman and Members of the Subcommittee, thank you for the
    opportunity to testify today about the Department of Energy's (DOE)
    Office of Science fiscal year 2004 budget request. I am deeply
    appreciative of your support for basic research, Mr. Chairman, and the
    support we have received from the other Members of this Subcommittee. I
    am confident that our fiscal year 2004 request represents a sound
    investment in our Nation's future. Through this budget we will
    strengthen core research programs, increase operating time at major
    scientific user facilities, and expand our capabilities for the future.
        This budget requests $3,310,935,000 for the fiscal year 2004
    Science appropriation, an increase of $47,059,000 over fiscal year 2003
    (see Figure 1), for investments in: Advanced Scientific Computing
    Research (ASCR), Basic Energy Sciences (BES), Biological and
    Environmental Research (BER), Fusion Energy Sciences (FES), High Energy
    Physics (HEP), Nuclear Physics (NP), Science Laboratories
    Infrastructure, Safeguards and Security, Workforce Development and
    Science Program Direction.
        These investments in basic research directly support the work of
    more than 8,000 researchers and students at more than 250 universities
    and at DOE's national labs. In addition, another 18,000 researchers
    annually take advantage of the major scientific user facilities
    operated on behalf of the Nation. The Office of Science is the steward
    of 10 national laboratories, which conduct and collaborate on the
    multi-disciplinary research that is essential to providing sustained
    progress toward the most difficult scientific questions and to ensuring
    that our Nation is able to respond rapidly in times of need.
        These researchers will advance the frontiers of nanoscale science;
    pursue the key questions at the intersection of physics and astronomy
    identified by the National Academy of Sciences; develop the knowledge
    base for bringing genomes to life with the potential to harness
    microbes and microbial communities to improve energy production and
    environmental remediation; advance the goals of the Administration's
    Climate Change Research Initiative and the National Energy Policy;
    begin negotiations to participate in the international fusion project--
    ITER; develop a new generation of computing architecture to identify
    and address performance bottlenecks in existing and planned systems;
    and bring the full potential of scientific computation to bear on the
    Department's scientific problems.
        The Office of Science is the single largest supporter of basic
    research in the physical sciences, providing approximately 40 percent
    of all Federal funds in this area over the past decade. It is also the
    steward, and by far the principal funding agency, of the Nation's
    research programs in high energy physics, nuclear physics and fusion
    energy sciences, as well as being the Federal government's largest
    source of support for materials and chemical sciences. The Office of
    Science also supports unique or critical pieces of U.S. research in
    scientific computation, climate change, geophysics, genomics, and the
    life sciences.
        Research projects supported by the Office of Science are selected
    on the basis of peer review and evaluation for quality, relevance and
    performance as emphasized in the President's Management Agenda and R&D
    Investment Criteria. These diverse and multidisciplinary programs rely
    upon the advice of the scientific community in developing daring and
    innovative research directions and facility capabilities. As a result,
    the program oversees one of the strongest research portfolios in the
    world--a strategic investment in the future technological strength and
    agility of the Nation.
        The Council on Competitiveness noted in its report Competitiveness
    2001, Strengths, Vulnerabilities and Long Term Priorities, that,
    ``Given the rising bar for competitiveness, the United States needs to
    be in the lead or among the leaders in every major field of research to
    sustain its innovation capabilities.'' Beginning with the impact on
    technology development of scientific discoveries in chemistry and
    electromagnetism at the end of the 19th century, scientific discovery
    has become the source of new technologies that are critically important
    to economic progress, energy and national security. We are in a period
    of rapid technological change. Advances in computing, communications
    and scientific instruments--many of them developed by SC--have
    transformed our society including the conduct of science. As a result,
    there are new scientific opportunities today that promise revolutionary
    technologies to come.

                            FIGURE 1.--OFFICE OF SCIENCE FISCAL YEAR 2004 PRESIDENT'S REQUEST
                                                   (B/A in Thousands)
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal Year     Fiscal Year
                                                                        Fiscal Year        2003            2004
                                                                       2002 Approp.     President's     President's
                                                                                          Request         Request
    ----------------------------------------------------------------------------------------------------------------
    Advanced Scientific Computing Research..........................         150,205         166,557         173,490
    Basic Energy Sciences...........................................         979,560       1,019,163       1,008,575
    Biological and Environmental Research...........................     \1\ 554,125         484,215         499,535
    High Energy Physics.............................................         697,383         724,990         737,978
    Nuclear Physics.................................................         350,589         382,370         389,430
    Fusion Energy Sciences..........................................         241,100         257,310         257,310
    Science Laboratories Infrastructure.............................          37,125          42,735          43,590
    Science Program Direction.......................................         149,467         137,332         150,813
    Workforce Development...........................................           4,460           5,460           6,470
    Safeguards and Security.........................................          45,770          43,744          43,744
    SBIR/STTR.......................................................      \2\ 99,668  ..............  ..............
                                                                     -----------------------------------------------
          Total Office of Science...................................       3,309,452       3,263,876       3,310,935
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes $68,822,000 of one time projects.
    \2\ Includes $36,391,000 from other programs.

                      fiscal year 2004 science priorities
        The fiscal year 2004 request supports major research programs that
    respond to DOE priorities and will contribute to the strength and
    vitality of the national research enterprise. Many of these research
    programs are conducted jointly with other Federal agencies and are
    illustrative of the wide array of scientific talent and resources that
    DOE brings to bear on critical national challenges:
      --Enter negotiations with representatives of the European Union,
            Japan, Russia and other international partners on construction
            and operation of a burning plasma experiment--the International
            Thermonuclear Experimental Reactor (ITER).
      --Continue to build on its leadership in high performance computing
            and networking to bring the full potential of scientific
            computation to bear on the Department's scientific and
            technical challenges. It will initiate a Next Generation
            Computer Architecture program to identify and address
            performance bottlenecks in existing and planned systems.
      --Continue construction of the Spallation Neutron Source, proceed
            with construction of three Nanoscale Science Research Centers
            (NSRCs) and initiate work on two others. These NSRCs--located
            at national laboratories in New York, Tennessee, Illinois, New
            Mexico and California--will provide scientists with an
            unmatched set of tools to design and build complex nanoscale
            materials.
      --Exploit its unique capabilities at the intersection of the physical
            sciences, the life sciences and scientific computation to
            continue and expand its effort to understand how the
            instructions embedded in genomes control the development of
            organisms, with the goal of harnessing the capabilities of
            microbes and microbial communities to help us to produce
            energy, clean up waste, and sequester carbon from the
            atmosphere.
      --Initiate a Laboratory Science Teacher Professional Development
            program for K-14 teachers in science and mathematics. Teachers
            will be competitively selected for a 4-8 week mentoring program
            by both scientists and master teachers at a national
            laboratory, followed by both additional 1 week mentoring visits
            and long term continuing support.
      --Exploit the capabilities of the world's finest set of research
            facilities in particle physics to attempt to find the answers
            to questions about matter and energy at the most fundamental
            level. What gives elementary particles their great variety of
            masses? Are there extra dimensions of space beyond the three we
            know? Why is there so little antimatter in the universe when we
            expect equal amounts of each were created in the Big Bang? What
            is the Dark Energy that causes the recently observed
            acceleration in the expansion of the universe and comprises
            fully two thirds of the mass and energy budget of the universe?
            What were the properties of the early universe before quarks
            and gluons condensed into protons and neutrons?
                            science accomplishments
        The Office of Science can trace its roots to the original
    legislation creating the Atomic Energy Commission in 1947, which had a
    charter to use fundamental research in nuclear physics and other
    physical sciences towards ``. . . improving the public welfare,
    increasing the standard of living, strengthening free competition in
    private enterprise, and promoting world peace.'' More than five decades
    later, the Office of Science can point to an extraordinary and diverse
    array of scientific discoveries that have led to dozens of Nobel
    Prizes, a draft map of the Human Genome, the creation of ``Bucky
    Balls,'' discovery of the quark structure of matter and the
    ``Accelerating Universe,'' major breakthroughs in medical diagnoses and
    nuclear medicine, and providing tools that allow researchers to ``see''
    at the atomic and subatomic scales, to simulate complex interactions
    and to collaborate across great distances.
        That history of discovery (which is documented on the Office of
    Science website, www.er.doe.gov/feature_articles_2001/June/Decades/
    index.html) continues to this day, with major accomplishments in the
    past year that are the result of our long-term, high-risk,
    multidisciplinary research and strong management practices.
        Two achievements in 2002 stand out as representative of the scope
    and magnitude of the research sponsored by SC. First is a technological
    miracle--restoring sight to the blind--being developed through an
    extraordinary marriage of biology and the physical sciences. The
    combination of diverse scientific disciplines such as these is a
    hallmark of Office of Science research and a particular strength of the
    DOE national laboratories. But realizing this remarkable technology
    also relies on the unique capabilities of industry (Second Sight,
    located in Santa Clarita, Calif.) and academia (the Doheney Eye
    Institute at the University of Southern California and North Carolina
    State University) in partnership with the national laboratories. In
    this project, specially designed MEMs (microelectro-mechanical systems)
    electrodes are positioned on the retinas of patients who have been
    blinded by disease, enabling them to convert light to electrical pulses
    that are received by the brain. Today's prototype enables a formerly
    blind patient to distinguish light from dark. Tomorrow's technology has
    the potential to restore almost full sight to the 200,000 people in the
    United States who are blinded every year by macular degeneration. This
    miracle of science is possible due to the long-term commitment of
    dedicated teams of scientists supported by DOE.
        The second was the award of the 2002 Nobel Prize for Physics shared
    by Raymond Davis, Jr., whose sublime experiments led to the capture of
    solar neutrinos, proving that fusion provides the Sun's energy and
    leading to the creation of an entirely new field of research: neutrino
    astronomy. Davis did his groundbreaking work while a researcher at
    DOE's Brookhaven National Laboratory, which is home to multiple Nobel
    Prize recipients. This is the most recent of the Nobel Prizes that have
    been awarded to DOE-supported scientists.
        In its announcement, the Royal Swedish Academy of Sciences said of
    Davis's accomplishment: ``This year's Nobel Laureates in Physics have
    used these very smallest components of the universe (neutrinos) to
    increase our understanding of the very largest: the Sun, stars,
    galaxies, and supernovae. The new knowledge has changed the way we look
    upon the universe.''
                                science programs
                     advanced scientific computing research
    Fiscal Year 2002 Appropriation--$150.2M; Fiscal Year 2003 Request--
            $166.6M; Fiscal Year 2004 Request--$173.5M
        The Advanced Scientific Computing Research (ASCR) program underpins
    DOE's ability to accomplish its mission through scientific computation.
    The ASCR program supports research in applied mathematics, computer
    science and high-performance networks and provides high-performance
    computational and networking resources to enable the advancement of the
    leading edge science that the DOE mission requires. ASCR delivers the
    power of advanced scientific computation and networking to the wide
    array of scientific disciplines supported by SC.
        In fiscal year 2004, ASCR will embark on research to identify,
    address and correct bottlenecks that presently constrain DOE's
    capabilities in modeling and simulation. A research portfolio in Next
    Generation Computer Architecture will be initiated to assess novel
    computer architectures and their prospects for achieving optimal
    performance for cutting-edge scientific simulations.
        In fiscal year 2004, the ASCR program will continue to develop the
    underlying mathematical algorithms, software building blocks and
    infrastructure for the ``Scientific Discovery through Advanced
    Computing,'' (SciDAC) program. SciDAC is an Office of Science research
    endeavor to produce the scientific computing, networking and software
    that DOE researchers will need for sustained progress at the scientific
    forefront in areas of strategic importance to the Department. The scope
    of the SciDAC program will be extended to include new activities to
    address the urgent need for a quantitative understanding of matter at
    the nanoscale.
        The ASCR program will also maintain the vitality of its basic
    research efforts in applied mathematics, computer and computational
    science, and network research to bolster the foundation for continued
    success in advancing scientific frontiers through computation.
        In fiscal year 2004, the Genomes to Life research activities in
    partnership with Biological and Environmental Research will be expanded
    to include new research in the applied mathematical sciences that will
    enable new computational techniques for the study of regulatory
    networks and metabolic pathways for microbial systems.
        Finally, in fiscal year 2004, ASCR will provide high performance
    computing and networking resources at the levels needed to meet Office
    of Science needs. The National Energy Research Scientific Computing
    Center, as a result of an enhancement in fiscal year 2003, will be
    operated at 10Tflops to meet the computational needs of nearly 2,400
    users. ESnet will be operated to provide state-of-the-art network
    services and capabilities to DOE-supported researchers nationwide to
    collect, analyze, visualize and distribute large-scale scientific data
    sets.
                             basic energy sciences
    Fiscal Year 2002 Appropriation--$979.6M; Fiscal Year 2003 Request--
            $1,019.2M; Fiscal Year 2004 Request--$1,008.6M
        The Basic Energy Sciences (BES) program is a principal sponsor of
    fundamental research for the Nation in the areas of materials sciences
    and engineering, chemistry, geosciences, and bioscience as it relates
    to energy. This research underpins DOE missions in energy, environment,
    and national security; advances energy related basic science on a broad
    front; and provides unique user facilities for the United States
    scientific community.
        In fiscal year 2004, construction will proceed on three Nanoscale
    Science Research Centers (NSRCs), project engineering design will be
    initiated on the fourth NSRC, and a Major Item of Equipment will be
    initiated for the fifth and final NSRC. NSRCs are user facilities for
    the synthesis, processing, fabrication, and analysis of materials at
    the nanoscale. The five NSRCs will be located strategically at national
    laboratories across the country in New York, Tennessee, Illinois, New
    Mexico, and California. These facilities, in conjunction with existing
    user facilities at these national laboratories, will provide a
    strikingly unique suite of forefront capabilities where the Nation's
    leading scientists can design and build complex nanoscale materials all
    in one place.
        The five NSRCs will be the Nation's critical focal points for the
    development of the nanotechnologies that will revolutionize science and
    technology. They will provide state-of-the-art nanofabrication
    equipment and quality in-house user support for hundreds of visiting
    researchers. The Centers will provide an environment for research of a
    scope, complexity, and disciplinary breadth not possible under
    traditional individual investigator or small group efforts. As such,
    the DOE Centers will be the training grounds of choice for the top
    graduate students and elite postdoctoral associates who will lead the
    future of scientific research.
        A high priority in fiscal year 2004 is continued construction of
    the Spallation Neutron Source (SNS) to provide the next-generation,
    short-pulse spallation neutron source for neutron scattering. The
    project, which is to be completed in June 2006, is on schedule and
    within budget with over half of the work completed as of the end of
    fiscal year 2002. At the end of fiscal year 2004, construction of the
    SNS will be 80 percent complete.
                     biological and environmental research
    Fiscal Year 2002 Appropriation--$554.1M; Fiscal Year 2003 Request--
            $484.2M; Fiscal Year 2004 Request--$499.5M
        Today, we have unprecedented opportunities to use advances in
    biology, computation, engineering, physics, and chemistry, to develop
    new solutions for challenges in energy, the environment, and health.
    The Biological and Environmental Research (BER) program is bringing
    these diverse fields together at DOE laboratories, universities, and
    private research institutes to find innovative approaches to address
    DOE challenges.
        In fiscal year 2004, the Genomes to Life program continues to
    develop novel research and computational tools that, when combined with
    our genomics, structural biology, and imaging research provide a basis
    to understand and predict responses of complex biological systems.
    Other BER efforts in the Life Sciences include Human Genome research
    and DNA sequencing and Low Dose Radiation research.
        BER contributions to the President's Climate Change Research
    Initiative include research in climate modeling, atmospheric
    composition, and regional impacts of climate change. Carbon cycle
    research will work toward understanding what fraction of carbon dioxide
    emissions are taken up by terrestrial ecosystems. New in fiscal year
    2004 are ecological research efforts to begin to bridge the knowledge
    gap between molecular level effects and the responses of entire
    ecosystems to natural and human-induced environmental changes.
        A key challenge in Environmental Remediations Science is to
    understand the subsurface environment and to then develop innovative
    options for clean up and protection. In fiscal year 2004, BER research
    will continue to develop new cleanup strategies, including
    bioremediation of metals and radionuclides and the treatment and
    disposal of high-level radioactive wastes stored in large underground
    tanks. The Environmental Molecular Sciences Laboratory is maintained at
    the leading edge of computational capabilities for enhanced modeling of
    environmental and molecular processes.
        Because of DOE's diverse capabilities across a range of scientific
    disciplines, BER Medical Applications research will continue to provide
    the medical community with novel devices and technologies to detect,
    diagnose, and treat disease. One example is research that will develop
    the capability to detect genes as they are turned on and off in any
    organ in the body with enormous impacts in developmental biology and
    the diagnosis of disease.
                             fusion energy sciences
    Fiscal Year 2002 Appropriation--$241.1M; Fiscal Year 2003 Request--
            $257.3M; Fiscal Year 2004 Request--$257.3M
        The Fusion Energy Sciences (FES) program leads the national
    research effort to advance plasma science, fusion science, and fusion
    technology--the knowledge base needed for an economically and
    environmentally attractive fusion energy source. The National Energy
    Policy states that fusion power has the long-range potential to serve
    as an abundant and clean source of energy and recommends that the
    Department develop fusion. It is the consensus of fusion researchers
    worldwide that the next frontier in the quest for fusion power is the
    creation and study of a sustained, burning (or self-heated) plasma. The
    Fusion Energy Sciences Advisory Committee (FESAC) has concluded that
    the fusion program is ready to proceed and has recommended joining the
    ongoing negotiations to construct the international burning plasma
    experiment, ITER, a strategy endorsed by the National Research Council
    (NRC) of the National Academy of Sciences. Following these
    recommendations, and an Office of Science reviewed cost estimate for
    the construction of ITER, the Administration decided to join the ITER
    negotiations.
        To be successful, the ITER negotiations must resolve not only
    citing of the project and an agreed-upon financial and procurement
    arrangement, but also satisfactory management and oversight
    arrangements. In these negotiations, the United States will strive for
    a robust management structure and an oversight program based on the
    principles of equity, accountability and transparency to ensure both
    the success of the project and the best use of taxpayer dollars.
        In light of the Administration decision to join the ITER
    negotiations, many elements of the fusion program that are broadly
    applicable to burning plasmas will now be directed more specifically
    toward the needs of ITER, while some longer range technology
    development activities will be curtailed. The majority of existing and
    proposed program elements, however, already contribute to tokamak
    science, thereby providing a strong base for our future contributions
    to and ability to benefit from ITER.
        Four areas characterize the FES program activities for fiscal year
    2004 and beyond. These are Burning Plasmas, which will include our
    efforts in support of ITER; Fundamental Understanding, which includes
    theory, modeling, and general plasma science; Configuration
    Optimization, which includes experiments on advanced tokamaks, advanced
    magnetic configurations, and inertial fusion concepts, as well as
    facility operations and enabling R&D; and Materials and Technology,
    which includes fusion specific materials research and fusion nuclear
    technology research. Integrated progress in all of these thrust areas
    is required for ultimate success in achieving a practical fusion energy
    source.
        The fiscal year 2004 budget supports a balanced fusion science
    program. The fiscal year 2004 budget request supports research in
    alternate confinement concepts, to include the final design and initial
    fabrication of the National Compact Stellarator Experiment facility at
    Princeton Plasma Physics Laboratory, facility upgrades and an increase
    in facility operations, research in inertial fusion energy and basic
    plasma science, as well as a focus on the use of high-end computational
    simulation.
                              high energy physics
    Fiscal Year 2002 Appropriation--$697.4M; Fiscal Year 2003 Request--
            $725.0M; Fiscal Year 2004 Request--$738.0M
        The High Energy Physics (HEP) program provides over 90 percent of
    the Federal support for the Nation's high energy physics research. This
    research seeks to understand the nature of matter and energy at the
    most fundamental level, as well as the basic forces that govern all
    processes in nature. High energy physics research requires accelerators
    and detectors utilizing state-of-the-art technologies in many areas
    including fast electronics, high speed computing, superconducting
    magnets, and high power radio-frequency devices. Until 2007, when
    Europe's Large Hadron Collider (LHC) is scheduled to begin operations,
    the United States is the primary world center for HEP research. In
    fiscal year 2004, the HEP program will concentrate on facility
    utilization, including direct support for researchers, as well as
    incremental facility upgrades.
        In fiscal year 2004, the Fermilab Tevatron Collider Run II will be
    in full swing. The Run II program will enable many advances and
    discoveries at the energy frontier, including: possible discovery of
    the long-sought Higgs particle, thought to be the key to understanding
    why particles have mass; providing even greater information about the
    heaviest known particle, the top quark, discovered at Fermilab in 1995;
    possible discovery of an entirely new class of particles that have been
    predicted, by many theories, to be present in Run II data; or unfolding
    of the as yet undiscovered space-time dimensions that have been
    postulated to complete the unification of fundamental interactions. A
    series of planned upgrades to the Tevatron accelerator complex, the
    major detectors, and computing facilities will continue in fiscal year
    2004 in order to enable a vigorous physics program that will maintain
    Fermilab's scientific leadership through the end of the decade. The
    NuMI/MINOS project, scheduled for completion in September 2005, will
    provide a world-class facility to study neutrino properties and make
    definitive measurements of neutrino mass differences.
        Building on the outstanding performance of the B-factory at the
    Stanford Linear Accelerator Center (SLAC), the HEP program will
    increase support for operation of the B-factory in fiscal year 2004 to
    break new ground in exploring the source and nature of matter-
    antimatter asymmetry in the B-meson system. The upcoming round of
    experimental results may provide evidence for new physics beyond the
    Standard Model of particle physics. Incremental upgrades are also
    planned in fiscal year 2004 for the accelerator to improve physics
    output and for the computing capabilities to cope with high data
    volumes.
        Continued U.S. participation in the LHC project at CERN is a high
    priority in fiscal year 2004. The U.S. contributions to the LHC
    accelerator and the ATLAS and CMS detectors are on schedule and within
    budget for the scheduled start-up date of 2007. Focus of this effort
    will begin to shift in fiscal year 2004 from construction to pre-
    operations for the U.S.-built detector components and to developing the
    software and computing infrastructure necessary to exploit LHC physics.
        Non-accelerator experimentation is a growing part of HEP research
    and offers many exciting opportunities for the future. Progress
    continues on particle astrophysics experiments and R&D in partnership
    with NASA. Collaborations on the Alpha Magnetic Spectrometer (AMS) and
    the Large Area Telescope (LAT), part of the Gamma-Ray Large Area Space
    Telescope (GLAST) mission, will be engaged in full detector fabrication
    and assembly in fiscal year 2004. The SuperNova Acceleration Probe
    (SNAP) will begin fabrication of detector prototypes in support of a
    2006 Conceptual Design. These experiments are working toward solving
    key mysteries in astrophysics and cosmology, including dark energy,
    high energy gamma ray sources, and antimatter in space, all of which
    play a role in the story of the origin and fate of the Universe. Other
    non-accelerator experiments are located at ground level, such as the
    Pierre Auger project and the Supernova Cosmology Project, or deep under
    ground, such as neutrino detectors.
        In addition, the program continues to support advanced technology
    R&D in fiscal year 2004 geared toward future accelerators, including a
    high-energy, high-luminosity Linear Collider. In January 2002, the
    HEPAP Subpanel on Long Range Planning stated that such a collider
    should be the highest priority of the U.S. HEP program.
                                nuclear physics
    Fiscal Year 2002 Appropriation--$350.6M; Fiscal Year 2003 Request--
            $382.4M; Fiscal Year 2004 Request--$389.4M
        The Nuclear Physics (NP) program supports fundamental nuclear
    physics research, providing about 90 percent of Federal support for
    this field. NP research advances our knowledge of the properties and
    interactions of atomic nuclei and nuclear matter in terms of the
    fundamental forces and particles of nature. It also supports the
    scientific knowledge-base, technologies and trained manpower that are
    needed to underpin DOE's missions for nuclear-related national
    security, energy, and the environment.
        The NP program seeks answers to questions in three broad areas. (1)
    The basic constituents of nuclei, the neutrons and protons (nucleons)
    are themselves each composed of three quarks and the gluons that
    ``carry'' the strong force between them. Yet, these quarks are
    ``confined'' and cannot be found individually in nature. Understanding
    this confinement and the transition from a nucleon to quark description
    of nuclear structure is a central question of the field. (2) The early
    universe, up to a millionth of a second after the ``Big Bang,'' is
    believed to have been a soup of quarks and gluons, a quark-gluon
    plasma. Creation of microcosms of this primordial matter in the
    laboratory is now being attempted in order to answer how the universe
    evolved at the very beginning of time. (3) The chemical elements are
    believed to have been created in stars and supernovae explosions, yet
    the nuclear reactions involved in this process involve nuclei far from
    the naturally occurring ones on earth. To answer how the elements were
    made (nucleosynthesis) requires producing exotic radioactive nuclear
    beams. Understanding the dynamics of supernovae also requires
    understanding the properties of the elusive neutrino which can only be
    detected in massive detectors.
        In fiscal year 2004, the NP program will focus on enhancing the
    operations of the program's user facilities, especially the
    Relativistic Heavy Ion Collider (RHIC), so as to bring all operating
    facilities to about 83 percent of optimal utilization. This will
    increase beam hours for research by about 5 percent over the fiscal
    year 2003 Request. Nuclear Theory, new Low Energy instruments, and
    increased support to non-accelerator research such as neutrino
    experiments are also strongly supported.
        In addition to increased operations at RHIC, fiscal year 2004
    funding will support an aggressive experimental program with the newly
    completed G0 detector at Thomas Jefferson National Accelerator Facility
    (TJNAF) to begin to map out the strange quark contribution to the
    structure of the nucleon. The MIT/Bates research program with the BLAST
    detector is being initiated in fiscal year 2003 with completion planned
    in fiscal year 2004. The two Low Energy user facilities (ATLAS and
    HRIBF) will also increase running schedules in fiscal year 2004 for
    nuclear structure and astrophysics studies.
        In fiscal year 2003-2005, the Sudbury Neutrino Observatory (SNO)
    will make sensitive measurements of the flux and spectra of solar
    neutrinos. Neutrino oscillations are evidence that neutrinos have mass,
    an observation that forces a re-evaluation of the existing Standard
    Model of particle physics.
                      science laboratories infrastructure
    Fiscal Year 2002 Appropriation--$37.1M; Fiscal Year 2003 Request--
            $42.7M; Fiscal Year 2004 Request--$43.6M
        The Science Laboratories Infrastructure (SLI) program plays a vital
    role in enabling the continued performance of world-class research at
    the Office of Science laboratories by funding line item construction
    projects to maintain the general purpose infrastructure (GPI) and the
    clean-up and removal of excess facilities. In fiscal year 2004, SLI
    will support six ongoing projects and one new start--seismic safety and
    operational reliability improvements at SLAC. Excess Facilities
    Disposition (EFD) will continue disposition of both contaminated and
    non-contaminated excess facilities, resulting in reduction of costs and
    risks while freeing-up valuable land. The fiscal year 2004 Budget
    Request also includes funding for the Oak Ridge Landlord subprogram.
                            safeguards and security
    Fiscal Year 2002 Appropriation--$45.7M; Fiscal Year 2003 Request--
            $43.7M; Fiscal Year 2004 Request--$43.7M
        Safeguards and Security reflects the Office of Science's commitment
    to maintain adequate protection of cutting edge scientific resources.
    In fiscal year 2004, Safeguards and Security will enable the Office of
    Science laboratories to meet the requirements of maintaining approved
    Security Condition 3 level mandates for the protection of assets.
    Integration of security into the laboratories' systems and continued
    risk management are also supported. In addition, critical cyber
    security tools and software will be purchased to respond to the ever
    changing cyber threat.
                             workforce development
    Fiscal Year 2002 Appropriation--$4.5M; Fiscal Year 2003 Request--$5.5M;
            Fiscal Year 2004 Request--$6.5M
        Workforce Development for Teachers and Scientists supports three
    subprograms: Pre-College Activities such as the National Science Bowl;
    the Undergraduate Research Internships for undergraduate students
    wishing to enter science, technology and science teaching careers; and
    Graduate/Faculty Fellowships for K-16 teachers of science, technology,
    engineering, and mathematics (STEM). Each of the subprograms targets a
    different group of students and teachers in order to attract a broad
    range of participants to the programs and expand the Nation's supply of
    well-trained scientists and engineers. Focus of this program is on the
    Physical Sciences and other areas of research which underpin the DOE
    missions and have, over the last decade, seen a marked decline in the
    numbers of undergraduate degrees awarded. Initiated in fiscal year 2004
    is the Laboratory Science Teacher Professional Development program that
    will provide long-term scientific community support from our National
    Laboratories for K-14 STEM teachers.
                           science program direction
    Fiscal Year 2002 Appropriation--$149.5M; Fiscal Year 2003 Request--
            $137.3M; Fiscal Year 2004 Request--$150.8M
        Science Program Direction enables a skilled, highly motivated
    Federal workforce to manage SC's research portfolio, programs,
    projects, and facilities in support of new and improved energy,
    environmental, and health technologies, and to provide continuous
    learning opportunities. Science Program Direction consists of four
    subprograms: Program Direction, Field Operations, Technical Information
    Management (TIM) and Energy Research Analyses (ERA).
        The Program Direction subprogram supports Federal staff in
    Headquarters responsible for directing, administering, and supporting
    the broad spectrum of scientific disciplines. The Field Operations
    subprogram is the funding source for the Federal workforce in the Field
    complex responsible for providing business, administrative, and
    specialized technical support to DOE programs. The TIM subprogram
    collects, preserves, and disseminates the scientific and technical
    information of the DOE. The ERA subprogram provides the capabilities
    needed to evaluate and communicate the scientific excellence,
    relevance, and performance of Office of Science basic research
    programs.
        As part of a restructuring effort, the Office of Science will focus
    on its Federal human capital in fiscal year 2004 to effectively respond
    to the science needs of the future and to the challenge of an
    anticipated 50 percent turnover of retirement-eligible senior
    scientists over the next 5 years. Also in fiscal year 2004, the Office
    of Science continues to support a corporate DOE information management
    system, the Electronic R&D Portfolio Management Tracking and Reporting
    Environment (ePME), which enables end-to-end tracking of research
    projects, information sharing across programs, and snapshots of the
    Department's R&D portfolio. ePME will integrate with the e-Grants
    functions of e-Government, the Department's e-Financial Management
    System, and the e-Procurement Modernization System.
                                   conclusion
        The Office of Science occupies a unique and critical role within
    the U.S. scientific enterprise. We fund research projects in key areas
    of science that our Nation depends upon. We construct and operate major
    scientific user facilities that scientists from virtually every
    discipline are using on a daily basis, and we manage civilian national
    laboratories that are home to some of the best scientific minds in the
    world.
        Our researchers are working on many of the most daunting scientific
    challenges of the 21st Century, including pushing the frontiers of the
    physical sciences through nanotechnology, exploring the key questions
    at the intersection of physics and astronomy, and opportunities at the
    intersection of the physical science, the life sciences and scientific
    computation to understand how the instructions embedded in genomes
    control the development of organisms, with the goal of harnessing the
    capabilities of microbes and microbial communities to help us to
    produce energy, clean up waste, and sequester carbon from the
    atmosphere. The Office of Science is also pushing the state-of-the-art
    in scientific computation, accelerator R&D, plasma confinement options
    and a wide array of other technologies that advance research
    capabilities and strengthen our ability to respond to the rapidly
    changing challenges ahead.
        I want to thank you, Mr. Chairman, for providing this opportunity
    to discuss the Office of Science's research programs and our
    contributions to the Nation's scientific enterprise. On behalf of DOE,
    I am pleased to present this fiscal year 2004 budget request for the
    Office of Science.
        This concludes my testimony. I would be pleased to answer any
    questions you might have.

        Senator Domenici. With that, we will proceed now to you,
    David.
        Mr. Garman, nice to have you here. How do you like your
    work?

                Office of Energy Efficiency and Renewable Energy

    STATEMENT OF DAVID K. GARMAN, DIRECTOR
        Mr. Garman. Oh, I like it a great deal, Mr. Chairman, and
    thank you. And thank you, Senator Craig, for your kind words. I
    appreciate this opportunity, and I appreciate the support of
    the subcommittee for our work.
        As you know, funding for activities in my office is split
    between the Energy and Water Development and the Interior
    Appropriations bills. Our overall budget request for fiscal
    year 2004 is $1.32 billion, a bit more than our request for
    fiscal year 2003. However, our fiscal year 2004 request for
    activities in the Energy and Water Development Appropriations
    is $37.2 million over the amount we requested for fiscal year
    2003.
        As the Chairman noted, our most notable expansion is in the
    area of hydrogen and fuel cell vehicles research and
    development, resulting from the President's Hydrogen Fuel
    Initiative announced during his State of the Union Address. I
    will say just a few words about hydrogen before highlighting
    other elements of our proposal.
        Our hydrogen technology subprogram is a key component of
    the President's Hydrogen Fuel Initiative. Our fiscal year 2004
    request is $48.1 million above our fiscal year 2003 request.
    This does not include additional funds that have been requested
    for hydrogen in the Offices of Fossil and Nuclear Energy. Our
    total hydrogen request is over $100 million. These funds would
    be used to establish a national research effort on hydrogen
    storage, to enhance technology development for hydrogen
    production from renewables and distributed natural gas, to
    accelerate work on codes and standards development, to
    accelerate work on hydrogen education, and to validate some
    hydrogen infrastructure technologies to support fuel cell
    vehicles and their test and evaluation.
        The increase in funding is designed to enable the industry
    to make a commercialization decision on hydrogen fuel cell
    vehicles and infrastructure by 2015. We believe this can help
    bring affordable hydrogen fuel cell vehicles to the showroom
    floor by 2020.
        For our solar energy technology program we are seeking
    $79.7 million, essentially the same as our fiscal year 2003
    request. We want to continue our work to bring down the cost
    and improve the reliability of solar photovoltaic systems.
        Our wind energy technology program has been successful in
    bringing down the cost of electricity generated from wind. Wind
    energy systems have been the fastest growing source of
    electricity worldwide for over a decade and are now providing
    cost-competitive power in high wind speed areas. As a result,
    our focus for wind R&D has shifted to larger blades and
    turbines using advanced materials that will allow economically
    viable development in the lower wind speed areas that are
    present more evenly across the Nation.
        In fiscal year 2004, we are requesting $41.6 million for
    wind energy, which is $2.4 million less than our fiscal year
    2003 budget request. This request is in alignment with our
    projected needs to achieve our goals.
        For our hydropower technology work, we are requesting about
    $7.5 million, the same level of funding we requested last year.
    As Senator Craig pointed out, our work in this area focuses on
    improving the environmental performance of hydropower plants by
    developing turbines that reduce fish injury and improve
    downstream water quality.
        Geothermal energy offers promise as a base load renewable
    energy resource, particularly in the Western United States. Our
    program focuses on exploration and reservoir technologies and
    drilling research to enable industry to locate and produce new
    geothermal fields at greatly reduced cost. In fiscal year 2004,
    we are requesting $25.5 million for these activities, $1
    million less than our fiscal year 2003 request.
        Biomass and biorefinery systems present some interesting
    challenges and opportunities for us. We know how to make power,
    as well as a variety of individual fuels, chemicals, and
    products from biomass. But we do not know necessarily how to do
    it affordably and competitively. We believe that the synergies
    of an integrated biorefinery that makes both power, products,
    and fuels cannot only help us reduce our dependence on imported
    oil, but expand economic opportunities in rural areas of the
    country.
        For the first time, we have brought together a diverse
    industry together and produced a vision, an R&D road map, that
    is helping us to restructure our biomass program and to focus
    on the most promising long-term opportunities for these
    technologies.
        We have also dramatically improved the collaboration
    between the Department of Energy and the U.S. Department of
    Agriculture. In that connection, the farm bill has provided $14
    million in mandatory biomass funding, which we are going to
    jointly manage with the Department of Agriculture under the
    direction of the Biomass Research and Development Board
    established under the Biomass R&D Act of 2000.
        In fiscal year 2004, we are also requesting almost $77
    million for electricity reliability, slightly more than our
    fiscal year 2003 request. That program consists of four main
    areas, including high temperature superconductivity,
    transmission reliability research, distribution and
    interconnection energy storage research, and the renewable
    energy production incentive.
        We are creating a new program office in the Department
    bringing various transmission-related activities together. We
    look forward to presenting more information to you about that
    in the weeks ahead.

                               PREPARED STATEMENT

        For now I ask that my full statement appear in the record.
    I am happy to answer any questions the committee may have,
    either now or in the future.
        Senator Domenici. It will be made a part of the record.
    Thank you very much.
        [The statement follows:]
                     Prepared Statement of David K. Garman
        Mr. Chairman, Members of the Subcommittee, I appreciate the
    opportunity to testify before you today on the fiscal year 2004 budget
    request for the Office of Energy Efficiency and Renewable Energy
    (EERE).
        As you know, the EERE budget is split between Energy and Water
    Development and Interior Appropriations Bills. Our overall budget
    request for fiscal year 2004 is $1,320,000,000 compared to
    $1,318,651,000 requested in fiscal year 2003. Our fiscal year 2004
    request for our Energy and Water Development programs totals
    $444,207,000, or 34 percent of EERE's budget, compared to $407,000,000
    requested in fiscal year 2003. The most notable programmatic expansions
    are in the area of hydrogen and fuel cell vehicles research and
    development (R&D), reflecting the priorities and recommendations of the
    President's National Energy Policy, the Department of Energy's (DOE)
    mission, EERE's Strategic Plan, and the EERE's Strategic Program
    Review.
        This request reflects EERE's streamlined new organization. Two
    years ago, EERE was divided into 31 programs, in 17 offices, stovepiped
    into 5 market sectors. Overlapping layers of management and duplicative
    and inconsistent business systems generated significant inefficiencies
    and made it difficult to ensure accountability and the most cost-
    effective application of taxpayer funds. Responding to the President's
    Management Agenda and our own Strategic Program Review, we launched a
    dramatic restructuring of the EERE program in June 2002. This
    restructuring streamlined our organization, eliminating up to four
    management levels, and centralizing administration functions into a
    single support organization with a focus on developing consistent,
    uniform, and efficient business practices. This is arguably the most
    dramatic restructuring in EERE's history.
      --The restructuring combined all the hydrogen and fuel cell
            activities, formerly scattered across two market sectors and
            three programs, into a single program for greater efficiency
            and synergy.
      --The restructuring combined all the bioenergy-related activities,
            formerly scattered across three market sectors and three
            programs, into a single program focused on advanced
            biorefineries. If successful, this research will allow waste
            plant matter to be turned into high value chemicals, fuels, and
            power.
      --The fiscal year 2004 budget is fully aligned with EERE's new
            management structure and strategic goals, allowing a strong
            linkage between congressional appropriations and the
            performance and productivity of EERE's research and development
            (R&D) and deployment activities.
        The fiscal year 2004 budget supports EERE's R&D and technology
    deployment efforts to provide Americans with increased energy security
    and independence through utilization of diverse domestic supplies,
    greater freedom of choice of technology, and reducing the financial
    costs and environmental impacts of energy utilization.
        As Secretary Abraham noted recently, the Department has ``. . . an
    ambitious, long-term vision of a zero-emissions future, free of
    reliance on imported energy.'' We must call upon science, technology,
    and the research talents in our national laboratories, universities,
    and industry to help us move beyond today's energy choices towards
    carbon-free generation of electricity and fuels, including hydrogen.
        Secretary Abraham has also made clear that all missions at the
    Department flow from our core mission to support national security.
    This EERE fiscal year 2004 budget demonstrates that the Department
    takes its responsibility toward national security seriously as it does
    its responsibilities toward science and technology. The Department has
    taken a deliberate and integrated approach to its research and
    development portfolio, using the strengths of all DOE programs to
    address this central mission. Clearly, environmental security and
    economic security underpin national security and each is sustained by
    science.
        What is more, there is only one way to build an integrated budget
    and that is to engage in a vigorous and disciplined planning process
    that forces programs to set priorities.
        Our EERE fiscal year 2004 budget request has been developed with
    these challenges and opportunities in mind.
                    the president's hydrogen fuel initiative
        Mr. Chairman, the big news in our fiscal year 2004 budget is, of
    course, the President's Hydrogen Fuel Initiative, which directly
    supports EERE's number one priority to dramatically reduce or even end
    dependence on foreign oil.
        Our nation currently imports 55 percent of our oil--a dependence
    that is projected to rise to 68 percent by 2025. Since two thirds of
    the 20 million barrels of oil we consume each day is used for
    transportation, we must focus on finding alternative, domestic fuels to
    power our transportation system if we ever expect to reverse this
    trend.
        In his recent State-of-the-Union address, President Bush announced
    a groundbreaking plan to transform our nation's energy future from one
    dependent on foreign petroleum, to one that utilizes the most abundant
    element in the universe--hydrogen. The concept for this initiative is
    simple, yet profound--create automotive operating systems that run on
    hydrogen rather than gasoline. The benefits will be considerable and
    widespread. Hydrogen can be produced from diverse domestic sources,
    freeing us from a reliance on foreign imports for the energy we use at
    home. Hydrogen can fuel ultra-clean internal combustion engines, which
    would reduce auto emissions by more than 99 percent. And when hydrogen
    is used to power fuel cell vehicles, it will do so with more than twice
    the efficiency of today's gasoline engines--and with none of the
    harmful emissions. In fact, fuel cells' only byproduct is pure water.
        On February 6, 2003, at an event on energy independence in
    Washington, D.C., featuring new uses for fuel cells including
    automobiles, the President reiterated his commitment to his new
    Hydrogen Fuel Initiative stating, ``The technology we have just seen is
    going to be seen on the roads of America. And it's important for our
    country to understand that by being bold and innovative, we can change
    the way we do business here in America; we can change our dependence
    upon foreign sources of energy; we can help with the quality of the
    air; we can make a fundamental difference for the future of our
    children.''
        During his speech on energy independence, the President also
    provided details of his initiative stating, ``We must make hydrogen
    more plentiful and produce it in the most efficient, cost-effective
    way. That is one of our challenges . . . We must increase the capacity
    of hydrogen storage systems. And we must put in place the
    infrastructure to get hydrogen to the consumers. There would be nothing
    worse than developing a car and having no place for somebody to find
    the fuel. People aren't going to buy many cars if they can't refuel
    their car.''
        To support the President's vision we need to make the necessary
    research and development investments to develop vehicles powered by
    hydrogen fuel cells and the infrastructure to support them. The
    President's Initiative will accelerate research and development on
    hydrogen production, delivery, storage and distribution, and establish
    the necessary safety-related codes and technology standards. In
    addition, it will accelerate the demonstration of fuel cell vehicles
    and hydrogen infrastructure so that these technologies can be validated
    under real world conditions.
        The government's role here is clear. We will coordinate and cost-
    share the high-risk R&D work of numerous private sector partners and
    our national network of science laboratories. Government coordination
    of this undertaking will also help resolve one of the difficulties
    associated with development of a commercially viable hydrogen fuel cell
    vehicle: the ``chicken and egg'' question. Which comes first, the fuel
    cell vehicle or the hydrogen production and delivery-refueling
    infrastructure to support it? The President's Initiative, in
    conjunction with FreedomCAR--the public-private partnership with U.S.
    automakers launched last year to accelerate the development of
    practical, affordable hydrogen fuel cell vehicles--answers the question
    by proposing to develop both systems in parallel. By so doing, federal
    investments will help to advance commercialization of hydrogen fuel
    cell vehicles and infrastructure by 15 years, from approximately 2030
    to 2015.
        To meet this challenge, the President's fiscal year 2004 budget
    request commits $1.7 billion over five years for the FreedomCAR
    partnership and Hydrogen Fuel Initiative. This includes $1.2 billion
    for hydrogen and fuel cells--$720 million in ``new'' money (i.e., not
    included in baseline projections of spending). EERE's overall fiscal
    year 2004 budget request for the FreedomCAR partnership and Hydrogen
    Fuel Initiative is $256.6 million. There is an additional $15.5 million
    for hydrogen production research requested by the Offices of Fossil and
    Nuclear Energy, and $0.7 million requested by DOT Research Special
    Projects Agency.
        Mr. Chairman, we stand on the cusp of revolutionary change in
    personal transportation in this country--and the world. The President
    has completely recast this Nation's vision of personal transportation
    by describing a future where vehicles will be fueled by hydrogen--and
    he is taking the steps necessary to lead us to that future.
          fiscal year 2004 energy and water development budget request
        For fiscal year 2004, we request a $37,207,000 increase above our
    fiscal year 2003 amended budget request.
        Let me now briefly review the portfolio of Renewable Energy
    Resources programs within the Office of Energy Efficiency and Renewable
    Energy. Before I begin, I'd like to highlight how the President's
    Management Agenda has helped us focus our resources and become better
    stewards of the taxpayers' dollars. For example, the R&D investment
    criteria help us guide budget decisions to ensure we fund only
    activities that can provide real public benefits and that the private
    sector would not undertake without our help. And the budget-performance
    integration initiative, through the Program Assessment Rating Tool
    (PART), has helped us to focus on continuing to improve our performance
    goals, and to identify program planning and management strengths and
    challenges.
        Two years ago, the President's Management Agenda pointed out that
    Federal government R&D programs in general ``do not link information
    about performance to our decisions about funding. Without this
    information, decisions about programs tend to be made on the basis of
    anecdotes, last year's funding level, and the political clout of local
    interest groups.'' This year, our funding request is in better
    alignment with what it will take to achieve our goals.
    Hydrogen Technology
        The Hydrogen Technology Subprogram is a key component of the
    President's Hydrogen Fuel Initiative.
        The program works with industry to improve efficiency and lower the
    cost of technologies that produce hydrogen from renewable energy
    resources and natural gas. In addition, the program works with the
    national laboratories to reduce the cost of technologies that produce
    hydrogen directly from sunlight and water. Hydrogen can be used in
    stationary applications for residential, commercial and industrial fuel
    cells, as well as in fuel-cell powered vehicles. Development of this
    clean energy carrier will lessen our dependence on imported fuels in
    both stationary and transportation applications.
        In fiscal year 2004, we request $87,982,000 ($48,101,000 more than
    our fiscal year 2003 budget request) for the Hydrogen Technology
    Subprogram (there is an additional $15.5 million in the Offices of
    Fossil and Nuclear Energy for a total of $103.5 million). This will be
    used to establish a national research effort on hydrogen storage; to
    enhance technology development for hydrogen production from renewables
    and distributed natural gas; to accelerate codes and standards
    development; to create a major hydrogen education effort; and to
    validate hydrogen infrastructure technologies to support fuel cell
    vehicle test and evaluation.
        Our fiscal year 2004 budget request represents a significant
    consolidation and realignment in the Hydrogen, Fuel Cells, and
    Infrastructure Technologies Program when compared to the fiscal year
    2003 budget request. This budget request reflects the functional
    priorities of the program: hydrogen production and delivery, hydrogen
    storage, hydrogen infrastructure validation, safety and codes/standards
    related to hydrogen and its infrastructure, and education and
    crosscutting analysis. The new budget structure consolidates all
    electrolyzer research and development under production and delivery.
        In addition, the fiscal year 2004 request proposes that all fuel
    cell activities be performed under Interior and Related Agencies
    Appropriation. This is a change since some fuel cell work was requested
    under Energy and Water Development Appropriation in fiscal year 2003.
    Also, all hydrogen production, delivery, and storage work is proposed
    to be under the Energy and Water Development Appropriation request in
    fiscal year 2004. This is a change since some hydrogen storage and off-
    board natural gas reforming work was requested under Interior and
    Related Agencies in fiscal year 2003.
        The increase in funding for fiscal year 2004 compared to the fiscal
    year 2003 request enables hydrogen production, storage, and
    infrastructure technology goals to be accelerated 15 years to enable
    industry to make a commercialization decision regarding hydrogen
    infrastructure and fuel cell vehicles by 2015.
        Specific fiscal year 2004 program activities include:
      --Accelerating development of low-cost, small-scale reformers and
            separation technology to enable hydrogen generated from
            distributed natural gas to achieve $3.00 per gasoline gallon
            equivalent by 2005 and to be competitive with gasoline by 2010
            ($1.50 per gasoline gallon equivalent, delivered, pre-tax).
      --Accelerating and expanding research on the production of hydrogen
            from renewable resources to reach a 2008 goal of $2.55 per
            gasoline gallon equivalent at the plant gate.
      --Creating a national research effort in hydrogen storage
            technologies, based on low pressure, solid state materials, to
            enable achievement of 2010 goals of 2.0 kWh/kg (6 percent by
            weight hydrogen storage capacity), 1.5 kWh/l and $4/kWh.
      --Conducting operations of the Las Vegas fueling station to determine
            emissions and system efficiency. Initiating limited
            ``learning'' demonstrations of hydrogen refueling stations to
            support fuel cell vehicle test and evaluation.
      --Providing leadership in developing safety-related codes and
            standards and conducting necessary coordination with the
            international community so that U.S.-based technology can
            compete globally.
        These efforts support the Hydrogen Fuel Initiative, and will enable
    the development of hydrogen fuel cell vehicles for the showroom floor
    by 2020. Success of these programs will begin to eliminate the need for
    imported oil, while simultaneously beginning to eliminate emissions and
    significantly reducing greenhouse gases from America's transportation
    fleet without affecting the freedom of personal mobility we demand.
    Solar Energy Technology
        The EERE Solar Energy Technology Program develops solar energy
    systems that are more efficient, reliable, and affordable for
    converting sunlight into electricity, space heat, hot water, and
    lighting. A primary objective of the program is to increase the value
    of solar energy by putting it at the point of use, making it an
    integral part of super efficient, state-of-the-art residential and
    commercial buildings and industrial establishments.
        In fiscal year 2004, we request $79.7 million for the Solar Energy
    Technology Program, which is level funding with our fiscal year 2003
    request. The fiscal year 2004 activities are as follows:
        Under Photovoltaic (PV) Energy Systems, we will increase technology
    development to support module and systems reliability improvements. In
    thin film modules, we will increase funding for accelerated lifetime
    testing and diagnostics to determine failure modes in pre-commercial
    products. In systems, we will increase funding for the inverter
    initiative to accelerate attainment of a next-generation grid-tied
    inverter with a greater than twenty-year lifetime. We will begin the
    second year of three-year contracts under the PV Science Initiative
    with universities to develop next-generation PV materials and devices
    that have the potential for dramatic cost reductions. The PV Science
    Initiative will more fully develop new ideas and concepts that can
    replace conventional technologies with a new generation of lower-cost,
    easier-to-manufacture technologies. In the Thin Film Partnership, the
    program will continue funding the most promising industry cost-shared
    contracts on technologies making the greatest achievements.
        In Solar Building Technology Research, we will continue development
    of a polymer water heater capable of operation in cold climates and
    test a hybrid solar daylighting system.
        The Concentrating Solar Power subprogram will be phased-out in
    accordance with the National Academy of Science recommendations.
    Zero Energy Buildings
        The focus of the Zero Energy Buildings concept involves efforts to
    integrate renewable energy systems into building designs and
    operations, such as integrating photovoltaic, water heating systems
    and/or space conditioning systems. These buildings use renewable energy
    sources so that the buildings produce as much energy as they consume on
    an annual basis.
        In fiscal year 2004, we request $4.0 million for the Zero Energy
    Buildings program, $4.0 million less than our fiscal year 2003 budget
    request. The program will evaluate its activities to ensure no
    duplications or overlaps with Interior-funded efforts in the Building
    Technologies Program.
        As part of the reorganization of EERE in fiscal year 2002, Zero
    Energy Buildings activities have been moved from the Solar Energy
    Program to the Buildings Technologies Program. This shift will enable
    more effective access to the residential and commercial building
    industries for Zero Energy Buildings technology developers and expand
    the range of opportunities for industry participation and cost sharing.
    The Zero Energy Buildings activities will continue to maintain
    effective technical coordination with the Solar Energy Program.
        In fiscal year 2004, we will focus on completing the evaluation and
    monitoring of first generation Zero Energy Buildings homes, built by
    leading homebuilders, to verify a 50 percent reduction in annual
    utility bills to $600 per year for an average sized home in a temperate
    climate.
    Wind Energy
        Wind energy systems have been the fastest growing source of
    electricity worldwide for over a decade, and are now providing cost-
    competitive power in high wind speed areas. As a result, the
    Department's focus for wind energy R&D has shifted to advanced
    technologies to allow economically viable development in the nation's
    more widespread lower wind speed areas. These areas are on average five
    times closer to major load centers, providing an opportunity to relieve
    transmission constraints as a major wind energy barrier, and over
    twenty times more abundant than currently-economic high wind areas.
    Under the Technology Viability key activity, the program is underway
    with a broad range of cost-shared public/private partnerships coupled
    with laboratory supporting research and testing to achieve low wind
    speed development goals for both large turbines used for utility scale
    wind farms, and for smaller (<100 kilowatt) turbines for use in
    distributed power applications. The Technology Application key activity
    targets remaining technical and institutional barriers to wind energy
    use, including grid systems integration, resource assessment, outreach
    to states and stakeholders, and support for near-term industry needs
    such as certification testing.
        In fiscal year 2004, we request $41,600,000 for the Wind Energy
    subprogram, $2.4 million less than our fiscal year 2003 budget request.
    The request is in alignment with our projected needs to achieve our
    goals.
        In fiscal year 2004, the Wind Energy subprogram will select and
    commence several new industry partnership projects for concept studies,
    component development, and/or full system development under competitive
    solicitations issued in 2003 for both large wind turbines and small,
    distributed power scale turbines. It will also conduct research efforts
    in wind turbine aerodynamics, structures, materials, advanced
    components, and wind characteristics to support development of new and
    improved tools and technology for low wind speed system design and
    applications. Advanced systems integration studies will assess
    opportunities for coordinated operation of wind and hydropower
    generation, and production of hydrogen from wind and hydropower.
    Hydropower
        In the case of hydropower, the program focuses on improving the
    environmental performance of hydropower plants by developing turbines
    that reduce fish injury and improve downstream water quality. The
    Department has engaged the expertise of the national laboratories to
    study and better understand hydropower's biological and environmental
    effects. Study results have been critical to the development of design
    thresholds for industry to use in their efforts to improve existing
    turbine designs.
        In fiscal year 2004, we request $7,489,000 for the hydropower
    subprogram, the same level of funding as our fiscal year 2003 request.
        Under Technology Viability: Advanced Hydro Turbine Technology, we
    have increased funding in fiscal year 2004 by $500,000 to support
    testing of new prototype hydro turbines.
        Under Technology Application: Low-Head/Low-Power R&D, we have
    decreased funding in fiscal year 2004 by $500,000, to reflect a shift
    in funding to higher-priority testing of new prototype hydro turbines
    under Technology Viability.
        In fiscal year 2004, the hydropower subprogram will develop and
    test full-scale (greater than 1 MW) prototypes of retrofit and new
    environmentally friendly turbine designs under competitively selected
    public private partnerships awarded in prior years. The Department will
    also complete the low head/low power resource assessment of all 50
    states, identifying the undeveloped hydropower resources that could be
    developed without building new impoundments.
    Geothermal Technology
        The Geothermal Technology Development Program works in partnership
    with U.S. industry to establish geothermal energy as an economically
    competitive contributor to the U.S. energy supply, capable of meeting a
    portion of the Nation's heat and power needs, especially in the West.
    The program focuses on exploration and reservoir technologies, and
    drilling research because better understanding of geothermal resources
    and cost-effective means of accessing those resources will enable
    industry to locate and produce new geothermal fields at greatly reduced
    cost.
        In fiscal year 2004, we request $25,500,000 for geothermal program
    activities, $1 million less than our fiscal year 2003 budget request.
        In fiscal year 2004, the program will step up work on Enhanced
    Geothermal Systems (EGS) cost-shared projects at three competitively-
    selected sites. In fiscal year 2004, we will increase funding for EGS
    by $2.5 million over our fiscal year 2003 budget request due to the
    high priority of this program area and budget projections supporting
    the field development phases of the cost-shared projects. The program
    will also support at least five cost-shared, competitively-selected,
    exploration projects initiated with industry to validate new technology
    and find and confirm new geothermal resources within the United States.
    Biomass and Biorefinery Systems R&D
        In fiscal year 2004, we are requesting $69,750,000 for Biomass/
    Biorefinery Systems, a $16,255,000 decrease from our fiscal year 2003
    budget request.
        For the first time we have brought a diverse industry together and
    produced a vision and R&D roadmap that has increased the level of
    industry investment. This roadmap has allowed us to begin the process
    of rebuilding the program and focusing on the most promising long-term
    opportunities for these technologies. We have dramatically improved the
    collaboration among federal agencies, especially the Department of
    Agriculture (USDA). In addition, the Farm Bill provided direction and
    funding to USDA to work with DOE in advancing biomass technologies. In
    fact, the Farm Bill provides $14 million in fiscal year 2004 mandatory
    biomass funding for the Department of Agriculture, which DOE's Biomass
    Program will jointly manage at the direction of the Biomass Research
    and Development Board established under the Biomass R&D Act of 2000.
        The Department has focused its R&D efforts to high-priority, long-
    term technologies, both within the Biomass Program and the entire EERE
    portfolio. Earlier last year, the EERE bioenergy activities were
    integrated into one office to help focus resources on a limited and
    more coherent set of goals and objectives, increasing collaboration
    with industry, reducing overhead expenses, and exploiting synergies
    among similar activities in support of a future biorefinery industry.
    This focus on a clear set of goals, substantial leveraging of research
    funding with industry, and the transfer to industry of a number of
    demonstration activities that industry should continue to pursue
    without federal support has allowed a reduction in the need for funding
    to achieve our goals.
        Our fiscal year 2004 activities will include additional long-term,
    high-risk R&D in thermochemical conversion in support of biorefinery
    development. Efforts will continue on the testing of clean up and
    conditioning technologies and catalysts needed for biomass gasifiers.
    An industrial partner will validate the performance of an organism
    capable of fermenting multiple biomass sugars for ethanol production.
    Intergovernmental Activities
        Intergovernmental Activities support the program mission by
    providing consumers with improved choices for efficient and renewable
    energy products. Intergovernmental Activities are managed as part of
    the Weatherization and Intergovernmental Program, which is comprised of
    grant-related and technical assistance activities brought together
    through the reorganization of Energy Efficiency and Renewable Energy
    (EERE) in fiscal year 2002. Combining these activities will improve the
    Department of Energy's effectiveness in deployment of efficient and
    renewable energy technologies by streamlining administration of program
    funding and consolidating management of competitive awards. The former
    Renewable Implementation and Support activities have been given
    stronger focus by inclusion in the Weatherization and Intergovernmental
    Program.
        The Intergovernmental Activities subprogram receives appropriations
    from both the Energy and Water Development and the Interior and Related
    Agencies subcommittees. Interior activities focus on energy efficiency
    measures, while Energy and Water Development activities focus on
    maintaining working relationships with international and Native
    American tribal governments that inform and assist consumers with
    renewable and efficient energy options.
        In fiscal year 2004, we request $12,500,000 for Intergovernmental
    Activities, $2.307 million less than our fiscal year 2003 budget
    request.
      --The International Renewable Energy Program promotes clean U.S.
            exports, expanding the market of U.S. industries and reducing
            the cost of energy to our trading customers while improving
            their environment, reducing air and water pollution and
            greenhouse gas emissions, and creating new jobs. In fiscal year
            2004, we request $6.5 million for international activities (the
            same level of funding as our fiscal year 2003 request).
      --The Tribal Resources Program provides assistance to Native American
            Tribes and Tribal entities in assessing energy resources,
            comprehensive energy plan development, energy technology
            training, and project development. In fiscal year 2004, we
            request $6.0 million to assist Tribes in ways to use renewable
            energy technologies on Tribal lands. Funds will be awarded
            competitively.
        The U.S. Country Studies Program has completed its mission of
    showing how the United States could cost-effectively reduce global
    greenhouse gas emissions through energy efficiency and renewable energy
    exports and cooperative agreements with other countries. The funding
    has been shifted to support Administration initiatives such as the
    Energy Efficiency for Sustainable Development and the Global Village
    Energy Partnership Initiatives announced at the World Summit for
    Sustainable Development. DOE expects to leverage these investments with
    loans and private investments. The goal is to attain significant energy
    savings and environmental and quality-of-life improvements for the host
    countries and their governments and citizens.
    Electricity Reliability
        Electricity Reliability provides funds for our Distributed Energy
    and Electricity Reliability Program. This Program leads a national
    effort to develop a flexible, smart, and secure energy system through
    advanced technologies that improve capacity utilization of the
    transmission and distribution system and through tools that provide
    real-time information to system operators. This Program offers
    solutions that bridge both the supply- and demand-side of the energy
    equation and the need to upgrade our electric energy infrastructure.
        The National Energy Policy and the follow-up National Transmission
    Grid Study (NTGS) published in May 2002 identified critical needs to
    modernize the nation's electric delivery system. This budget initiates
    key responses to the 51 recommendations of the Grid Study including
    bottleneck assessment, interaction with FERC on standard market design
    and critical research and development needs. The fiscal year 2004
    program consists of four main areas: High Temperature Superconductivity
    (HTS), Transmission Reliability Research, Distribution and
    Interconnection, Energy Storage Research, and Renewable Energy
    Production Incentive.
        In fiscal year 2004, we request $76,866,000 for Electricity
    Reliability, $360,000 more than our fiscal year 2003 budget request.
        For the HTS program, we request $47.838 million in fiscal year 2004
    to develop applications of superconducting materials for the
    electricity delivery system. High temperature superconducting materials
    can be used to make wire conductors that are capable of carrying more
    current than existing conductors while having virtually no electric
    line losses of energy. The lack of electrical resistance of HTS
    materials makes it possible to have super-efficient generators,
    transformers, and transmission and distribution cables that reduce
    energy losses by half while using equipment that is about one-half the
    size of present electrical systems.
        Transmission system operations have been made more complex by the
    growing volume of wholesale power transactions. As a result, data
    collection and visualization tools for utility planners and system
    operators are required that boost diagnosis and response times and
    increase the efficiency of market operations. The Transmission
    Reliability activity has developed and installed prototype voltage and
    frequency monitoring and visualization tools that allow transmission
    operators to immediately recognize and correct system problems. Other
    reliability tools are being installed, such as prototype satellite-
    synchronized devices that afford operators a real-time view of system
    conditions, provide information for reliable operation of the grid, and
    enable more efficient operation of competitive electricity markets. In
    fiscal year 2004, we request $10.720 million to expand R&D on grid
    monitoring, data collection, and visualization tools.
        The Transmission Reliability R&D subprogram request is proposing a
    new initiative in fiscal year 2004--the National Transmission
    Infrastructure (NTI) Initiative, with requested funding of $3.0
    million. This initiative responds to the NTGS. The NTI Initiative
    addresses the technical and market-related recommendations in the NTGS
    that call specifically for DOE actions. Actions include ``national-
    interest'' transmission lines assessment, and advanced technologies for
    relief of transmission congestion, including sensors, monitoring and
    control for real time operation, advanced conductors, analysis of new
    system configurations and dynamics, and demand response. In addition,
    increased emphasis will be placed on field validation and testing and
    on providing more technical assistance to states and regions on topics
    such as regional resource and transmission planning.
        Interconnection, communications, and control systems are needed to
    allow for a more ``plug & play'' design that can revolutionize energy
    markets and create new products and services for industrial,
    commercial, and governmental consumers who are interested in hassle-
    free distributed energy solutions. The Distribution and Interconnection
    (formerly DER Electric Systems Integration) activity is developing
    standards, conducting tests, and performing analysis for the
    interconnection and integration of distributed energy technologies for
    customers and electric distribution systems. It includes activities to
    develop the microgrid concept, to analyze the impact of high levels of
    penetration of distributed energy devices on the distribution system,
    and to address technical, institutional, and regulatory barriers to the
    expanded use of distributed energy resources. In fiscal year 2004, we
    request $7.249 million for this Subprogram.
        The Energy Storage Research activity addresses important challenges
    in the efficient operations of electric generation, transmission, and
    distribution systems. As a peak shaving tool during times of
    transmission overload, or during price peaks, energy storage allows
    more efficient allocation of energy resources without necessarily
    producing additional emissions. Energy storage systems can be used to
    provide back-up power and power quality support to consumers,
    potentially saving billions of dollars in downtime costs, damaged
    equipment, and disrupted operations. In fiscal year 2004, we request
    $5.0 million for Energy Storage Research activities to support higher
    priority Transmission Reliability research and development, and take
    advantage of potential synergies with expected developments under the
    Vehicle Battery Program, which significantly increased its funding
    request for fiscal year 2004.
        The Renewable Energy Production Incentive Program stimulates
    electricity production from renewable sources owned by States or
    smaller private sector groups. In fiscal year 2004, we request $4.0
    million, the same funding level as our fiscal year 2003 budget request.
    Departmental Energy Management Program (DEMP)
        DEMP targets services at DOE facilities to improve energy and water
    efficiency, promote renewable energy use, and manage utility costs in
    facilities and operations. In fiscal year 2004, we request $2.3 million
    for DEMP activities, $700,000 less than our fiscal year 2003 budget
    request. DEMP will audit facilities to identify energy conservation
    opportunities; provide funding for best practices identification and
    dissemination; and accomplish energy conservation retrofits through
    direct funding and alternative financing.
    National Climate Change Technology Initiative (NCCTI)
        In response to the President's commitment of the United States to
    develop a sensible, science-based approach to the issue of climate
    change, facilitate progress toward achieving climate change goals,
    near-term and long-term, and implement the President's National Climate
    Change Technology Initiative, the Department has requested in fiscal
    year 2004 a total of $40 million for the NCCTI Competitive Solicitation
    program. Funding is requested in four R&D program accounts, as follows:
    Energy and Water Development: EERE (Energy Supply--$15 million) and NE
    (Energy Supply--$2.3 million); and Interior and Related Agencies: EERE
    (Energy Conservation--$9.5 million) and FE (Fossil Energy R&D--$13.2
    million).
        These funds will be used to support a NCCTI competitive
    solicitation aimed at exploring concepts, technologies and technical
    approaches that could, if successful, contribute in significant ways
    to: (a) future reductions in or avoidances of greenhouse gas emissions;
    (b) greenhouse gas capture and sequestration (permanent storage); (c)
    capture and conversion of greenhouse gases to beneficial use; or (d)
    enhanced monitoring and measurement of greenhouse gas emissions,
    inventories and fluxes in a variety of settings.
        The NCCTI competitive solicitation is intended to spur innovation
    and accelerate technical progress on climate change technology
    development. The competitively selected research will complement DOE's
    existing portfolio of climate change-related R&D activities, and will
    be consistent with their missions, goals and objectives. The Climate
    Change Technology Program will manage the NCCTI competitive
    solicitation.
    Facilities and Infrastructure
        The Facilities and Infrastructure budget addresses capital
    investments at two DOE laboratory sites: the National Renewable Energy
    Laboratory (NREL), and Oak Ridge National Laboratory (ORNL).
        NREL is the Nation's premier laboratory for renewable energy R&D.
    It also works to improve energy efficiency, advance related science and
    engineering, and facilities technology commercialization. In fiscal
    year 2004, we request $4.2 million for operating expenses.
        For ORNL in fiscal year 2004, we request $750,000 to complete the
    design of a new multistory building of approximately 52,000 square feet
    to provide facilities for EERE R&D activities. This building will be a
    state-of-the-art facility designed to operate as a demonstration of
    energy efficiency technology. Energy Star certification will be sought
    for applicable portions of the building.
        Fiscal year 2004 funding is requested to award the Architectural-
    Engineering contract for the project design and to provide project
    management. This budget provides half of the requested amount for
    Project Engineering and Design. Because industry will directly benefit
    from this facility, we are requiring 50 percent industry cost share for
    all phases of the project, including building design, as recommended in
    the National Transmission Grid Study. The project also is consistent
    with the ORNL Strategic Facilities Plan and complementary to the
    Facilities Revitalization Project of the DOE-ORNL Office of Science
    initiative to modernize their national laboratories.
    Program Direction
        Program Direction provides the federal staffing resources as well
    as associated properties, equipment, supplies and materials required
    for supporting the responsive management and oversight of programs.
    Program Direction also funds support service contractors, equipment,
    travel, and crosscutting activities.
        In fiscal year 2004, we request $16.577 million, $390,000 more than
    our fiscal year 2003 budget request.
                                   conclusion
        Mr. Chairman, Members of the Subcommittee, we welcome the challenge
    and the opportunity to play a vital role in this Nation's energy future
    and to support our national security.
        This completes my prepared statement. I would be happy to answer
    any questions you may have.

        Senator Domenici. Mr. Magwood, you are last, but not least.
    Congratulations on the nuclear work. And we finally got some
    good funding in some big areas this year. It took about 3
    years, but we are there now. Proceed to give us a summary, and
    your statement will be made a part of the record.

                Office of Nuclear Energy, Science and Technology

    STATEMENT OF WILLIAM D. MAGWOOD, IV, DIRECTOR
        Mr. Magwood. Thank you, Mr. Chairman. This is an exciting
    year to be here before you speaking about the nuclear energy
    program. As you have observed, we have gone through a difficult
    time over the years. After many years of planning and many
    years of talking to our stakeholders in the research community,
    it is a pleasure to be here with a budget that really lays the
    groundwork for the future.
        The programs proposed in our budget reflect the
    administration's commitment to nuclear energy and one that is
    interested in doing what is necessary to get new nuclear
    technologies deployed in the United States and around the
    world. The salient change in our fiscal year 2004 budget
    request from previous years is the fact that we are now in the
    process, as Senator Craig mentioned, of integrating the Idaho
    National Engineering and Environmental Laboratory as part of
    our nuclear family. We are in the process of planning for the
    future of this laboratory and working with other labs across
    the country. I expect INEEL to become the center for our
    overall efforts to develop advanced nuclear reactor and fuel
    treatment technologies.

                         ADVANCED FUEL CYCLE INITIATIVE

        One of the activities at INEEL, in association with many
    other labs that we expect to see grow over the years, is our
    budget proposal for the Advanced Fuel Cycle Initiative (AFCI)
    that you mentioned earlier. With the $63 million proposed in
    fiscal year 2004, this is one of the Secretary's capstone
    initiatives. Through this major research program, we will
    develop proliferation-resistant nuclear fuel treatment and
    transmutation technologies that can reduce the volume and
    toxicity of spent fuel. We think this is a very important
    objective.
        There are many unique aspects of this program. It involves
    many of our national laboratories in a comprehensive and
    integrated fashion. It brings universities, particularly the
    University of Nevada-Las Vegas and Idaho State University, as
    key R&D partners. Most importantly, it leverages the experience
    and expertise of our international partners. Already, simply
    through signing cooperative agreements, we have gained $100
    million worth of research data.
        Senator Domenici. What is this on and from whom?
        Mr. Magwood. Working with our international partners
    through agreements we signed with France and Korea and most
    recently the European Union, we have gained access on----
        Senator Domenici. On what subject?
        Mr. Magwood. Advanced fuel cycles.
        Senator Domenici. Good.
        Mr. Magwood. Over $100 million worth of data has been
    available. This is very important.

                      GENERATION IV NUCLEAR ENERGY SYSTEMS

        For AFCI to be successful, however, it is important that we
    move forward with Generation IV nuclear power systems. Two
    years ago, when we launched the Generation IV program to
    develop advanced reactor technologies, we were able to reach
    out to the international community. We now have a total of 10
    countries in the Generation IV international forum, including
    the United Kingdom, Argentina, Brazil, Canada, France, Japan,
    Republic of Korea, Republic of South Africa, Switzerland and,
    of course, the United States working together on advanced
    technologies.
        The work of the forum has been very intensive and very
    cooperative. We are very pleased with what we have been able to
    accomplish. The level of international cooperation has been
    extraordinary. As an example, a French scientist was assigned
    to the INEEL for a year to help formulate the Generation IV
    technology road map. More recently, just this week, in fact,
    the U.K. Department of Trade and Industry has assigned one of
    its senior officials, Ms. Helen Wiser, to work at the
    Department of Energy for the next 2 years. I am pleased to say
    that she is here with me today to see her first Senate hearing
    in the United States.
        Last year, at a meeting in Japan, the Generation IV
    National Forum presented Secretary Abraham and other senior
    officials with the completed technology road map that
    identifies six important technologies for the future. One of
    these technologies, the Very High Temperature Reactor, is a
    technology that we are very interested in exploring. We believe
    that this technology could be the future source of cost-
    effective, commercial-scale production of hydrogen, the power
    of a growing economy, without emitting greenhouse gases and
    other pollutants.

                          NUCLEAR HYDROGEN INITIATIVE

        That brings me to our other major new initiative, the
    Nuclear Hydrogen Initiative, which is part of the National
    Hydrogen Fuel Initiative announced by President Bush. Through
    this program, we expect to develop and demonstrate by 2007 new
    technology that can produce hydrogen that could in the future
    be coupled with Generation IV nuclear power systems. This is
    very challenging work, but it is work that we believe can and
    must be done.

                               NUCLEAR POWER 2010

        Finally, it was around this time last year that Secretary
    Abraham announced the Nuclear Power 2010 Program. This effort
    is aimed at paving the way for the construction of new nuclear
    power plants by the end of the decade. We have started
    cooperative cost-share projects with three utility companies,
    Entergy, Exelon, and Dominion Resources, to demonstrate the
    early site-permitting process. We expect that this joint
    government-industry effort will result in three applications to
    the NRC this summer to obtain permits for sites operated by our
    R&D industry partners.
        In 2004, we will work with industry to respond to NRC
    questions as these applications achieve successful conclusion
    by 2005. While our tactical and regulatory demonstration work
    is proceeding well, it is clear that the business and financial
    issues facing prospective builders of nuclear power plants are
    the biggest hurdles that need to be overcome. This was
    highlighted by an independent study commission by the
    Department from Scully Capital last year. This financial
    advisory firm found that addressing key financial and business
    risks associated with building new plants is essential if we
    are going to see new plants in this country. We are continuing
    to discuss these risks with industry and hope to make future
    suggestions as to how those risks can be mitigated.

                               PREPARED STATEMENT

        With that, I will keep my oral remarks brief and look
    forward to your questions.
        Senator Domenici. Thank you very much.
        [The statement follows:]
                  Prepared Statement of William D. Magwood, IV
        Mr. Chairman, Senator Reid, and Members of the Subcommittee, it is
    a pleasure to be here to discuss the fiscal year 2004 budget submission
    for DOE's Office of Nuclear Energy, Science and Technology.
        Over the last 30 years, nuclear power has risen to become the
    second most important source of electric energy in the United States
    and at the same time, the most operationally economic. The benefits of
    nuclear power as a clean, reliable and affordable source of energy are
    a key to the economic and environmental underpinnings of this Nation. A
    central mission of the Department's nuclear energy research program is
    to help enhance the basic technology and, through some of the most
    advanced civilian technology research conducted today, chart a course
    to the next leap in technology. In fiscal year 2004, we are proposing a
    $388 million investment in nuclear research and development and for the
    Nation's nuclear science, technology and education infrastructure, a 6
    percent increase over the current year appropriation.
        This budget request responds to the President's priorities to
    deploy new generation capacity to fortify U.S. energy independence and
    security while making significant improvements in environmental
    quality. It builds on the important work started over the last 2 years
    to deploy new nuclear plants in the United States by the end of the
    decade, to develop advanced, next generation nuclear technology, to
    strengthen our Nation's nuclear education infrastructure, and it
    proposes exciting new priorities.
        In fiscal year 2004, we propose to launch the Nuclear Hydrogen
    Initiative to use high temperature nuclear energy systems for clean
    hydrogen production as part of the President's Hydrogen Fuel
    Initiative. We are also proposing the Advanced Fuel Cycle Initiative
    with research aimed at developing proliferation-resistant fuel
    treatment and fuel cycle technologies that can reduce the volume and
    toxicity of commercial spent nuclear fuel and maximize energy from
    nuclear fuel.
        During fiscal year 2002, we pursued significant management reforms
    in order to implement the President's Management Agenda (PMA),
    including a major reorganization to better reflect the Administration's
    priorities, improve overall management and reduce the number of primary
    organizational units from eight to three. To assure overall
    accountability, PMA performance measures were cascaded from the
    Director through our Associate Directors to the staff. We also placed
    great emphasis on developing meaningful R&D investment criteria and
    applying the criteria to our nuclear research initiatives. The nuclear
    program successfully recruited and hired new junior professional staff
    and we are working to put to new senior management team in place at the
    Idaho Operations Office, who will oversee the Department's activities
    at the INEEL and lead the continuing transition of this laboratory back
    to its nuclear research roots.
        The NE budget request also supports the infrastructure for
    production of medical research isotopes, space and national security
    power systems, and the site and security infrastructure for Argonne
    National Laboratory-West in Idaho. I will now provide you more detail
    on our nuclear R&D initiatives and the linkages between them.
                         advanced fuel cycle initiative
        Of the issues affecting future expansion of nuclear energy in the
    United States and worldwide, none is more important or more difficult
    than that of dealing effectively with spent nuclear fuel. After a long
    and difficult process, the country is moving forward with a geologic
    repository, and we are on schedule to submit a license application to
    the Nuclear Regulatory Commission by the end of 2004.
        With these successes, we are able to pursue research that can
    optimize the use of the first repository and possibly reduce the need
    for future repositories. As one of the Secretary's capstones, the
    fiscal year 2004 Budget proposes an aggressive research and
    demonstration program--the Advanced Fuel Cycle Initiative--with an
    investment of $63 million in fiscal year 2004 to explore advanced,
    proliferation-resistant nuclear fuel treatment and transmutation
    technologies that can reduce volume and toxicity of spent nuclear fuel
    for a geologic repository. If successful, these same technologies offer
    benefits of enhancing national security by reducing inventories of
    commercially-generated plutonium and enhancing energy independence by
    recovering the energy value contained in spent nuclear fuel.
        The Department is proposing a research program leading to
    demonstrate proliferation-resistant fuel treatment technologies to
    reduce the volume and radioactivity of high level waste, and the
    development of advanced fuels that would enable consumption of
    plutonium using existing light water reactors or advanced reactors.
    With the President's request, the Department will continue work toward
    demonstration of proliferation-resistant fuel treatment technology and
    continue design of transmutation fuels for future use with current
    reactor technologies.
        For the Advanced Fuel Cycle Initiative to be successful, advanced
    fuel treatment and transmutation research and development must be
    integrated with the development of Generation IV nuclear energy
    systems, particularly with those reactor technologies that can produce
    very high energy neutrons that would be needed to transmute a wide
    variety of toxic radioactive species. To support this goal, the
    Advanced Fuel Cycle Initiative will develop the advanced proliferation
    resistant fuels and fuel cycle systems for Generation IV reactors.
                      generation iv nuclear energy systems
        Two years ago, we launched the Generation IV program to develop
    advanced reactor technologies for commercial deployment after 2010 but
    before 2030. These advanced reactors offer significant advances in
    sustainability, proliferation-resistance, physical protection, safety
    and economics. Development of these reactors is being pursued by the
    Generation IV International Forum, a group of ten leading nuclear
    nations (United Kingdom, Argentina, Brazil, Canada, France, Japan,
    Republic of Korea, Republic of South Africa, Switzerland, and the
    United States), which last year selected six promising technologies for
    joint research, development, and demonstration. While the Department
    has not yet decided upon which of these technologies it will eventually
    focus, all of the technologies are of considerable interest. The six
    innovative, next-generation technologies include two gas-cooled
    reactors, one water-cooled reactor, two liquid-metal-cooled reactors,
    and a molten salt-based reactor concept.
        Key research objectives for these technologies will include such
    activities as demonstrating advanced fuels and materials. The goal of
    the initiative is to resolve the fundamental research and development
    issues necessary to establish the viability of these concepts. By
    successfully addressing the fundamental research and development
    issues, the concepts are highly likely to attract future private sector
    sponsorship and ultimate commercialization. In fiscal year 2003 and
    fiscal year 2004, the Department will establish international
    partnering agreements to guide joint research and begin research and
    development on several of the reactor concepts, including very high
    temperature reactors that would support cost-effective production of
    hydrogen.
                          nuclear hydrogen initiative
        Generation IV is closely linked to our new Nuclear Hydrogen
    Initiative, aimed at demonstrating economic commercial-scale hydrogen
    production using nuclear energy. Today, through electrolysis, we can
    convert water to hydrogen using electricity but we believe that for the
    future, very high temperature reactors coupled with thermo-chemical
    water splitting processes offer a more efficient technology for
    production of large quantities of hydrogen, without release of
    greenhouse gases.
        The hydrogen initiative grew out of the success of our Nuclear
    Energy Research Initiative, in particular, two investigator-initiated
    projects that identified a number of advanced reactor concepts capable
    of producing large quantities of hydrogen with high efficiency and low
    cost. Since then, we have awarded three additional NERI projects to
    study nuclear production of hydrogen. Beginning this year and under the
    international component of NERI (I-NERI), we are working in cooperation
    with Commissariat d'Energie Atomique (CEA) on a three-year effort to
    develop laboratory scale demonstration of the thermo-chemical water
    splitting process.
        The funds provided in fiscal year 2003 will allow us to accelerate
    the Nuclear Hydrogen Technology Roadmap so that by fiscal year 2004, we
    would begin implementing the research and development that is defined
    by the roadmap. We would also continue exploring laboratory scale
    demonstration of some of the key processes involved in nuclear hydrogen
    production, such as other thermo-chemical water splitting processes or
    high temperature electrolysis as well as development of high
    temperature heat exchangers.
                               nuclear power 2010
        The President's budget supports continuation of Nuclear Power 2010
    in fiscal year 2004 to demonstrate, in cost-shared cooperation with
    industry, key regulatory processes associated with licensing and
    building new nuclear plants in the United States by the end of the
    decade. As concluded in a business case study conducted in 2002 by
    financial advisory firm Scully Capital, addressing key financial and
    business risks associated with building and licensing the first few
    nuclear plants is essential to proceeding with new nuclear plants in
    the United States.
        In fiscal year 2004, the requested funds will continue to support
    the activities associated with submitting and achieving Nuclear
    Regulatory Commission (NRC) approval of early site permits and
    development of Combined Construction and Operating License
    applications.
        Last year, the Department initiated cooperative cost shared
    projects with three generating companies--Entergy in Mississippi,
    Dominion in Virginia, and Exelon in Illinois, to demonstrate the new
    regulatory process for siting new nuclear power plants. These companies
    are pursuing applications for Early Site Permits for new plants at
    sites where they currently operate nuclear power plants--at Entergy's
    Grand Gulf site, Dominion's North Anna site, and at Exelon's Clinton
    site. The Early Site Permits will be submitted to the NRC by the end of
    this fiscal year and in fiscal year 2004, we will continue our support
    of these regulatory demonstration projects to achieve successful NRC
    staff review and approval of the siting application in 2005.
        Key to the deployment of new nuclear power plants, besides a viable
    site, is selection of a nuclear power plant design and utility
    application for a combined Construction and Operating License from the
    NRC. In fiscal year 2003, the Department will solicit and award
    industry cost-shared projects to implement activities to achieve
    deployment of new nuclear power plants. This effort includes the
    necessary analysis and planning for technology selection and project
    cost determination, additional siting activities as appropriate,
    advanced reactor development and certification, and demonstration of
    the combined construction and operating licensing process.
                 university reactor fuel assistance and support
        The Department sponsors the University Reactor Fuel Assistance and
    Support initiative, which supports the enhancement of the U.S. nuclear
    science and technology educational infrastructure. The need for trained
    and qualified nuclear scientists has not diminished over the years, and
    in fact, because of increasing retirements in the nuclear field, demand
    today exceeds supply.
        We are very pleased that the President's budget includes $18.5
    million for this program for fellowships, scholarships, nuclear
    engineering research, and for critical support to university research
    reactors. In fiscal year 2002, the Department launched the Innovations
    in Nuclear Infrastructure and Education program, encouraging
    universities to form ground-breaking partnerships with national labs,
    the private sector, and other universities to strengthen nuclear
    engineering education and optimize the use of research reactors. In
    fiscal year 2002, DOE issued awards to four consortia of universities
    and their partners. In fiscal year 2003, DOE will be able to support an
    additional award and will continue support for this program in fiscal
    year 2004.
                       radiological facilities management
        This budget request also includes $63 million in funds to maintain
    critical research, isotope and space and national security power
    systems facilities at Oak Ridge National Laboratory, Los Alamos
    National Laboratory, Sandia National Laboratory, and Brookhaven
    National Laboratory in a safe, secure, and cost effective manner to
    support national priorities.
        The fiscal year 2004 budget request also includes $13 million in
    funds transferred from the National Nuclear Security Administration to
    continue the Uranium-233 project at Oak Ridge National Laboratory. This
    project is aimed at stabilizing materials left over from the Cold War
    to address a Defense Nuclear Facilities Safety Board recommendation,
    while extracting isotopes from the uranium that are needed for very
    promising medical research.
                  ineel--doe's command center for nuclear r&d
        Finally, this budget supports the Secretary's realignment of the
    mission of the Idaho National Engineering and Environmental Laboratory
    to focus the future of the site on nuclear research and development. As
    the Department's leading center of nuclear research and development,
    this laboratory is the ``command center'' for our efforts to develop
    advanced reactor and fuel cycle technologies, including development of
    space nuclear power and propulsion technologies.
        While the nuclear energy program involves the collective talents of
    universities, the private sector, international partners, and our
    national laboratories--Argonne, Los Alamos, Sandia, and Oak Ridge among
    them--the rebuilding of the Departments' nuclear program underway today
    would not be possible without the dedicated scientists, engineers and
    supporting staff of the Idaho National Engineering and Environmental
    Laboratory.
        Clearly, environmental cleanup will remain a major focus of the
    Department for the near-term but real progress is being made that will
    clear the way for expansion of nuclear research and development. With
    this year's budget, $110 million has been transferred from the
    environmental cleanup program to the Department's nuclear program to
    manage laboratory infrastructure and security.
        This year's budget request combines the infrastructure for the
    INEEL previously funded by the Office of Environmental Management, for
    the Test Reactor Area landlord, and for the infrastructure of Argonne
    National Laboratory West under the Idaho Facilities Management program.
    Similarly, the Safeguards and Security program, combines the security
    funds INEEL and Argonne-West, into a single program. With significantly
    challenges to security since September 11th, we are very pleased that
    our current-year appropriation is substantially higher than last year
    and that the fiscal year 2004 request, at $54 million, is about 13
    percent higher than this year.
                                   conclusion
        Mr. Chairman, and Members of the Subcommittee, this concludes my
    prepared statement. I would be pleased to answer any questions you may
    have.

        Senator Domenici. I have a series of written questions
    which we will submit. We would appreciate your answering them
    as soon as you can.
        And we would like to just talk with you for a little while
    here. Dr. Orbach, about 5 years ago, a number of science
    initiatives directed at the lagging activities of the United
    States in nuclear energy and nuclear activities were started by
    this subcommittee. One of the least noticed but most important
    is the study, which you were in charge of, to evaluate the low-
    level radiation and its actual effects rather than the formula-
    extracted radiation expectations that have been in existence
    for a long time using linear projections.
        Can you talk about that study for a minute? How is it
    going? And are you certain that it is moving ahead such that
    when we are finished, those who have never wanted this done and
    always thought we should stay stuck on that linear formula will
    be satisfied that it is done neutrally by peer excellent
    scientists?

                              LOW-LEVEL RADIATION

        Dr. Orbach. Yes, we currently have 53 research projects at
    laboratories and universities on low-level radiation. We have
    learned already that your last comment is correct, namely that
    the extrapolation from the high-end radiation to low doses
    simply is not accurate, does not work, and misses the essential
    biology. We found already in our probes and our research
    programs that there are intercellular activities that take
    place. One cell influences another. So the conventional idea
    that radiation would act only on the DNA of a particular cell
    simply does not hold up at these low levels. We have been able
    to look at adaptive responses, how cells adapt to radiation,
    bystander effects, how cells adjacent to cells that suffer
    radiation damage are affected. Individual genetic responses to
    radiation at this level are very different, and there may well
    be a genetic difference among individuals. We are
    mathematically modeling radiation risk, as well.
        We have received about 50 proposals for new research that
    will be peer reviewed later this spring. New emphasis for this
    research is to look at whole systems, rather than single cells.
    This peer review process will be done fairly and independently.
    As a consequence, those projects selected will be on the basis
    of scientific merit alone.
        Senator Domenici. But, Doctor, while I appreciate your
    knowledge on it and the fact that it is very widespread and
    exciting, on the other hand, the importance of this is to
    determine at a point in time, sometime, whether or not that
    formula is the right one to be using for low-level radiation
    doses.
        As you know, that formula has supplied the information for
    nigh on decades now as to what the negative effect might be of
    a certain dosage of low level radiation. The consequence of
    that might not seem like much, as we discuss here, but it is
    generally perceived as dramatic in America.
        It determines how much cement you have to put on a site
    that has once been exposed to low level radiation, so there is
    no fear on the other side of it. It establishes cleanup
    standards for all of the waste sites, because there has been
    such enormous fear that if that formula has been used and what
    we have done by way of spending money and the like to assure
    safety is rather extravagant even to an undisciplined eye and
    ear and mind, and now we have to kind of prove it over the
    years or we have the constant excessive costs that are
    attributable to the residue of nuclear activity.
        So where are we in that regard? Five more years? Ten more
    years? Will we come to some finality, as I have described it
    here?
        Dr. Orbach. I believe we will achieve a finality. I would
    like to provide for the record our best estimate of when we
    might be able to achieve that. What we have already discovered
    is what you have just stated, namely that the extrapolation is
    not an accurate way of describing the effects of low-level
    doses of radiation. To make that quantitative into standards of
    the sort you described, I would----
        Senator Domenici. It would be awhile.
        Dr. Orbach [continuing]. Need to look at it, and I will
    respond back to you with that.
        [The information follows:]
                      Low Dose Radiation Research Program
        The Low Dose Radiation Research Program has the challenge of
    conducting research that will inform the development of future national
    radiation risk policy for the public and the workplace. The Program has
    challenged scientists to quantify and understand the mechanisms of
    molecular and cellular responses to low dose exposures to radiation,
    currently 0.1 Gee (10 rads) or less, doses well below those previously
    studied using older, less sensitive research tools. Indeed, for the
    first time, some of our scientists have actually been conducting
    research at radiation doses that overlap or approach the maximum
    allowable radiation doses above background for the public (100 mrem/
    year above background) or for nuclear workers (500 mrem/year above
    background).
        Mathematical models are, and will continue to be, used to predict
    health risks from low doses of radiation by ``integrating'' information
    obtained from human epidemiologic studies and from laboratory research.
    Beginning in 1999, we asked an initially skeptical research community
    to study biological effects at very low doses. They have risen to the
    challenge with increasingly important and relevant ideas submitted and
    progress made each year. Most scientists in the field believe that we
    still do not know enough about the biological consequences of low dose
    radiation exposure to be able to completely model human health risk.
    However, this year the Low Dose Program is challenging scientists in
    the risk modeling community to begin a systematic evaluation of how the
    new data from research in this program can (or cannot) be used in new
    mathematical models that estimate the health risks of low dose
    radiation exposure. The program issued a call for new research, DOE
    Notice 03-20, on February 19, 2003, that builds on our previous
    research and is designed to jump start this process of biologically-
    based risk modeling. This exciting new research opportunity will also
    provide valuable feedback on additional laboratory research that is
    needed to make biologically-based risk modeling a reality.
        Our best estimate of the time required to reach sufficient
    understanding of the biological consequences of low dose radiation
    exposures to resolve the uncertainty and controversy surrounding the
    use of the linear no-threshold model is based on current budget levels,
    progress we have made to date, and the anticipated progress of current
    and future research. The new modeling research that will be funded
    later this year will require approximately 1\1/2\ to 2 years to
    complete. The results of this research will lead to new laboratory-
    based research aimed to fill remaining critical gaps in the information
    needed to develop the new biologically-based risk models for radiation
    exposure, a process that typically takes 3 years. Finally, results of
    this research will again be used to develop improved biologically-based
    risk models. Under current levels of funding, we estimate a total of 6
    to 7 years is required to accomplish the research described above.
        Given budget uncertainties as well as the uncertainties of
    research, progress could be somewhat faster or slower. As scientists,
    we never know if the next experiment will yield an unexpected
    breakthrough. If one or more critical breakthroughs occur over the next
    few years, progress could certainly be faster. At the same time, we
    cannot know for certain prior to the completion of ongoing and planned
    research if additional research will be necessary. If another round of
    laboratory research and modeling is required at the end of the process
    described above, it could, instead, be closer to 10 years before we
    have a definitive answer. We are certainly encouraged by progress that
    has been made to date and anxiously await the research results that
    will be forthcoming in the future.

        Senator Domenici. I would like to know that. And, sir, I
    would also like to know that for those who have complained
    about it not being the right way to do it--and I would like to
    hope that every step of the way you have gone to the scientific
    community and attempted to get the right answer. See, this is
    the real Achilles heel for the anti-nuclear people. The anti-
    nuclear people do not want this study to succeed, because so
    long as that formula is used, it is enormously expensive to do
    anything that has low-level radiation.
        And if it is wrong, which most scientists say it is, we
    ought to conclude that it is. So some would like you not to
    succeed. And I urge you, as the head person, to be aware of
    that and make sure that it is succeeding.
        Dr. Orbach. I commit myself to that. This is a study based
    solely on the science, on the quality of the science. And the
    judgments will be on that basis alone.
        Senator Domenici. Now you have another part of the
    science--Senator, would you like to participate? Do you want to
    make an opening statement or ask questions?
        Senator Dorgan. No. I am just listening to you. As soon as
    you are finished, I will ask some questions. But why do you not
    proceed?
        Senator Domenici. Thank you.

                                  NANOSCIENCES

        You have another very exciting activity within your domain
    of the nanoscience centers. Now there is no question that
    scientists that know, obviously including the great Dr. Davis
    who you have alluded to from Rice University, I believe, that
    got the Nobel because of research on nanoscience--and that was
    in the very early stages, very early determinations. But they
    have all concluded that this is something very fundamental in
    terms of its capacity to offer new and exciting things to be
    done and ways to do things going beyond the atomic structure
    that we currently assume is part of everything. We go inside of
    it, which is the nano part.
        Now we have five centers. One is in my State, a combination
    of Sandia, Los Alamos, an Air Force laboratory? Then you have
    four more?
        Dr. Orbach. Yes.
        Senator Domenici. Now are you in charge of those centers,
    or how are they being managed?
        Dr. Orbach. Yes, my office is in charge of those centers.
    They are administered through the Basic Energy Sciences Program
    within the Office of Science. All five of those centers were
    accomplished through, again, a peer review process. Each of
    them have held open workshops of the order of 400 scientists
    coming to each of the workshops. We have just had a very large
    meeting last week in Washington to talk about the initiatives.
        Each of the five, although, obviously, there has to be
    overlap, because some of the fundamentals are similar, choose
    their own areas of expertise where they can make the greatest
    contribution. The two laboratories in your State, for example,
    will be looking at the nano electronics area. This is because
    of the extraordinary expertise that both Los Alamos and Sandia
    have in that area. They will be looking not only at
    electronics, but also photonics, at the nano scale.
        So what we do is to build on the local strength of the
    laboratories to focus on specific areas of interest. The Luhan
    Center at Los Alamos is now the largest spallation source for
    neutrons in the United States, and that is closely coupled to
    the nanotechnology initiative. So we can do, not only
    statistics, but also dynamics in situ while the materials are
    being grown.
        We also are pursuing similar approaches using our light
    sources, or the spallation neutron source that is under
    construction at Oak Ridge.
        So each of the centers has its own flavor and its own
    focus. This will give the United States leverage over any other
    country in the world because, where it is true that each
    country is investing in what I call table-top nanotechnology,
    the United States is using very large facilities in intimate
    relationship to the nanotechnology growth and determination,
    physical property determination, centers so that, as we grow
    them, we can study their properties.
        This is something that no other country will have access to
    on their own soil and will give, we believe, American
    scientists and engineers and our companies a great advantage.
        Senator Domenici. And those centers are funded, albeit in
    small amounts, in this budget.
        Dr. Orbach. Yes, the three centers are funded for
    construction, including the one in New Mexico. The other two
    centers are either in the engineering design stage at
    Brookhaven National Laboratory, or we have an arrangement with
    the State of Illinois where they will build a building at
    Argonne and we will provide the equipment.
        So the latter two are in the initial stages. By 2008 all
    five laboratories are expected to be up and running.
        Senator Domenici. They had a meeting here, did they not,
    pretty recently, the nanoscientists?
        Dr. Orbach. Yes, indeed.
        Senator Domenici. I was there.
        Dr. Orbach. I think you were one of the principal
    spokesmen.
        Senator Domenici. Let me ask, on the other part of little
    things, microengineering, is that a specialty within the
    Department, or are those things being done just by the
    laboratories on microengineering or micromachines?

                                 MICROMACHINING

        Dr. Orbach. The micromachining is an integral part of this.
    It is a way of getting down to the nano scale.
        Senator Domenici. Yes. I understand.
        Dr. Orbach. It is being funded by ourselves, as well, yes.
        Senator Domenici. Have you seen a micromachine put on a
    chip?
        Dr. Orbach. I have seen the micromachines producing chips.
    I do not think I have seen one on a chip. That is wonderful.
        Senator Domenici. Have you seen--you have not seen a micro
    engine working on a chip?
        Dr. Orbach. Oh, yes, indeed. You can produce little motors
    now at the micron level or submicron level, which is very
    exciting.
        Senator Domenici. And you know how you have a chip now that
    has all the different things we talk about being on there?
    Micromachines are now so small and so controlled that you take
    a piece of material, much like the foundation of a chip, and
    you put on it scores and scores of little, tiny engines. And
    they are called microengines. And when they put the proper
    machinery on it to expand the size, you can actually watch
    these little, tiny, tiny machines work. They work just like a
    turbine, in and out. And they are trying to figure out in due
    course what you will use them for.
        Dr. Orbach. Oh, these have phenomenal applications. For
    example, in medicine----
        Senator Domenici. Right.
        Dr. Orbach [continuing]. These machines can be placed
    inside the body at the cellular level.
        Senator Domenici. Right.
        Dr. Orbach. Very exciting.
        Senator Domenici. And you may properly instruct the machine
    so that, for instance, they will remove the plaque in your
    heart instead of having surgery. At least they are thinking
    about that kind of thing.
        Let me complete just two more questions, and then move to
    nuclear. And then I will yield to the Senator.
        Let us talk about nuclear for a minute, one more with you.
    Who is in charge more or less of moving ahead to see that the
    United States is not, on the one hand, moving with a hydrogen
    engine and on the other hand leaving us without a way to make
    hydrogen in large quantities? We do not find hydrogen around.
    We have to go make it.
        And my understanding is, right now, there are only a couple
    ways to make it. One is natural gas. And we surely would not
    want to do that, I would not think. By creating huge new uses,
    there is going to be a shortage of natural gas soon. And the
    other would be some kind of nuclear reactors. Is that your
    area, or your area, or whose?

                                    HYDROGEN

        Mr. Garman. Actually, we are working on it together.
        Senator Domenici. Who is together?
        Mr. Garman. In the Department of Energy, the Office of
    Science, the Office of Energy Efficiency and Renewable Energy,
    the Office of Nuclear Energy, and the Office of Fossil Energy
    are all working together in a coordinated way. We have, in
    fact, been producing what we call our hydrogen posture plan,
    which is a way to describe to the Congress and the world
    precisely how we are working together to tackle some of the
    daunting technological challenges that we face, not only in
    production, but in storage.
        There is no one entity in the Department that should do
    that. We do hydrogen, but we depend on the work in his lab, for
    instance, to find a breakthrough in a hydride material to solve
    a storage problem. So we are going to work very closely
    together on all of these issues.
        Senator Domenici. Well, it should not surprise you, if we
    do an energy bill, and we are well on the way to having one
    written, we are surely going to have a major section on the
    research and development of the car engine and whatever the
    United States is going to need to produce the hydrogen in the
    future.
        Senator Dorgan. Senator, would you mind if I could ask a
    question about that?
        Senator Domenici. Go ahead.
        Senator Dorgan. I have to be upstairs at 3:30.
        Senator Domenici. Sure.
        Senator Dorgan. If I would be able to ask a question
    following up on the one you just asked----
        Senator Domenici. Go ahead.
        Senator Dorgan [continuing]. And then perhaps one of Dr.
    Orbach, as well.
        The issue of hydrogen production is one in which you can
    produce hydrogen from natural gas. You can also produce
    hydrogen from nuclear. But hydrogen is ubiquitous. It is
    everywhere. You can produce hydrogen through electrolysis by
    separating the hydrogen and oxygen in water. In fact, this past
    weekend I rode on a commercial bus that was on the city streets
    of a city out west that was a fuel cell bus being powered by
    hydrogen. The supply of hydrogen on a demonstration basis came
    from several different sources; one from solar energy, second
    from electrolysis, third from natural gas. And there are many
    other ways to produce hydrogen, as well.
        But Mr. Garman is quite correct, that we need to evaluate
    both production, transportation, and storage, all of which are
    important in moving towards this area.
        And I agree with you, Mr. Chairman, that stationary engines
    are important, as well as the issue of how to use fuel cells to
    power vehicles. And I am really anxious to work with you on
    this. I think we can make a real difference, both on the Energy
    Committee and also on the Appropriations Subcommittee dealing
    with these issues.
        Senator Domenici. We will.
        Senator Dorgan. The President has put his administration on
    course in support of this, which I think is very important. I
    have indicated I think it is timid in terms of funding, but I
    do not mean that as a heavy criticism, because it is no small
    feat to have this administration say, ``Let us move in this
    direction.'' I just want to make that point, because I am very
    excited about this and want to work with Mr. Garman and you and
    others on it.
        Can I just ask a question about the funding of other
    renewables? I asked you the question the other day, Mr. Garman,
    and indicated my concern about reduction in funding of biomass,
    level funding or slightly reduced funding in solar, wind, and
    some other areas. Has the decision to move toward fuel cells or
    a hydrogen-based economy meant that you have had to reduce what
    otherwise would have been provided for other renewables?

                                OTHER RENEWABLES

        Mr. Garman. No, sir. I do not believe it has. We looked at
    each of these programs independently. After you apply the
    congressionally-mandated reductions to the 2003 levels, funding
    for solar is down $4.1 million. But we still have $80 million
    to work with. Funding for wind is down $700,000. So we still
    have a very robust request in this area. In hydropower, funding
    is actually up a couple million dollars. And in geothermal
    funding, it is down $3.4 million. But again, we still have a
    robust $25.5 million program to work with.
        We do have a significant reduction in the biomass program
    of some $17 million in this account. That is substantial. We
    think that with the availability of the Department of
    Agriculture money, which was not available to us before, and
    the fact that we are revamping and restructuring this program
    to achieve greater results with the money we have, we have a
    very strong and vibrant biomass program. The biomass program is
    emerging to be the strongest it has been in years.
        Senator Dorgan. Well, some of us want to watch those
    renewable programs carefully. I am pleased you are there. I
    have a lot of confidence in your ability.
        Mr. Chairman, Mr. Garman came out to North Dakota and spoke
    to a wind energy conference. Seven hundred and fifty people
    showed up at a wind energy conference. They are very, very
    interested in the possibilities there.
        So, Mr. Garman, I look forward to working with you on a
    range of these issues.
        I would like to ask Dr. Orbach, you were at Riverside, as I
    recall----
        Dr. Orbach. Yes.
        Senator Dorgan [continuing]. Prior to this appointment. And
    we have talked previously about micro and nanotechnologies. I
    note the five centers. And I note the granting process that you
    are involved in with grant funds. You are well aware of my
    concern about where the grants in this country go from the
    Federal Government. We have a process that is kind of a
    perpetual process of renewal. Those large institutions that get
    the grants will always get the grants, because they are the
    major part of the peer review of who is going to get grants in
    the future.
        If you take California, Texas, Massachusetts, and New York
    and take a look at the amount of research money that goes from
    the largest researcher in the world, that is, the Federal
    Government, to those States, it predicts where future economic
    opportunities and future centers of excellence will be. And so
    I am very concerned about making sure that the great talents in
    the rest of the country are put to use on micro and
    nanotechnologies, as we proceed. And I know you are familiar
    with that, given the work that you were interested in at
    Riverside. I hope that you will keep that in mind in your
    current position as well.
        In your testimony, you say the two major achievements for
    2002, and you talk about them. Can you give me a notion of what
    you think you might be telling the committee next year about
    the two major achievements for 2003? What is out there that you
    think is really fascinating, right on the edge, that is going
    to be something that represents significant breakthroughs?

                              SCIENCE ACHIEVEMENTS

        Dr. Orbach. Well, if I could address the first part of your
    question, because I feel very strongly about it. Our
    responsibility in our office is to our Nation. If we are not
    careful, we are going to leave States behind in economic
    development. I have been working very hard through EPSCoR
    through the other programs we have in the Federal Government,
    to encourage economic development for every State.
        Your State has some absolutely first-class people and
    investments. The investment that I visited personally at North
    Dakota State University was impressive. Your Caterpillar
    relationships up there already show that you can work and work
    well.
        The program I was involved in was a sharing program between
    the North Dakota State University and the University of
    California Riverside. That program is underway. We are
    encouraging in the nanotechnology area scientists from all over
    the country to participate. And it is hard when the facilities
    are not available immediately and locally. So we are
    encouraging partnerships to enable that to happen. You will see
    me work very assiduously on the spreading of economic
    development opportunities across this Nation. Otherwise, we
    will leave States behind, and that is not acceptable.
        If you ask a scientist what is going to happen in a couple
    of years, it is always with some trepidation that they will
    respond, because we have been wrong so often in our
    expectations.
        I can say that there will be something exciting at this
    hearing next year. My guess is that it will be in the
    biological area, for example, Genomes to Life. The work there
    on hydrogen production, carbon sequestration, the new
    initiatives that we are looking at in the nanotechnology area
    in biology are going to be extraordinary.
        Some of our large machine designs are also coming along.
    The light source at Stanford, which is a free electron laser,
    will increase the intensity in the X-ray, hard X-ray region by
    10 orders of magnitude. We may enable biologists to be able to
    look at a single molecule and determine structure, rather than
    having to grow a single crystal, as they do now.
        Senator Dorgan. Do you have one publication, Dr. Orbach,
    that describes some of the really interesting areas of
    research?
        Dr. Orbach. Yes, we do. I would be delighted to provide
    that to you. Thank you.
        [The information follows:]
                           Accomplishments and Awards
                      basic research with historic results
        The Office of Science maintains our Nation's scientific
    infrastructure and ensures U.S. world leadership across a broad range
    of scientific disciplines. It supports research and development
    programs enabling the Department of Energy to accomplish its missions
    in energy security, national security, environmental restoration, and
    science.
        Office of Science research investments have yielded a wealth of
    dividends, including significant technological innovations, medical and
    health advances, new intellectual capital, enhanced economic
    competitiveness, and improved quality of life for the American people.
        Research supported by the Office of Science has made major
    contributions to development of the Internet; magnetic resonance
    imaging (MRI) and medical isotopes; composite materials used in
    military hardware and motor vehicles; and x-ray diagnostics of computer
    chips and other high-tech materials.
        Office of Science research investments also have led to such
    innovations as the Nobel Prize-winning discovery of new forms of
    carbon, non-invasive detection of cancers and other diseases, improved
    computer models for understanding global climate change and new
    insights on the fundamental nature of matter and energy.
        Research sponsored by the Office of Science has produced many key
    scientific breakthroughs and contributed to this Nation's well-being:
      --Helping to Develop the Internet
      --Computing for Science's Sake
      --Pioneering the Human Genome Project
      --Expanding the Frontiers of Discovery
      --Improving the Science of Climate Change Research
      --Enhancing National Security
      --Improving Energy Security
      --Medical Imaging
      --Restoring Sight to the Blind
      --Enabling World-Class R&D
                        helping to develop the internet
        The Office of Science helped develop the Internet. Really!
        In 1974, the Office of Science first connected its geographically
    dispersed researchers through a single network, a revolutionary, cost-
    effective mechanism that provided supercomputing power to civilian
    researchers and established a network model adopted by other Federal
    Government agencies and States for their researchers.
        Later, the Office of Science collaborated with DARPA, NSF and NASA
    to transform the many independent networks of the 1980's into a single
    integrated communications network that was the basis for today's
    commercial Internet.
        More recently, the Office of Science created the multicast backbone
    (M-Bone), the Internet videoconferencing virtual network that launched
    a new era in scientific collaboration in the early 1990's by linking
    anyone with a workstation with audiovisual capabilities and a high-
    speed connection to the Internet.
                          computing for science's sake
        The Office of Science long has been respected as the world leader
    in developing and using advanced computers as tools for scientific
    discovery and to achieve breakthroughs in targeted applications
    disciplines.
        It pioneered the transition to massively parallel supercomputing
    (involving 1,000 or more processors), producing the software, scalable
    operating systems and other technologies needed and demonstrating its
    value in fields ranging from seismic imaging to materials modeling.
        The Office of Science also installed the first supercomputer
    available to the civilian research community that broke the peak
    performance barrier of 1 teraflop--or a trillion operations per
    second--and developed the first civilian scientific application to
    achieve actual performance over 1 teraflop.
                      pioneering the human genome project
        The Office of Science initiated the Human Genome Project in 1986.
        It also developed DNA sequencing and computational technologies
    that made possible the unraveling of the human genetic code and
    published a complete draft of the DNA sequence of the human genome in
    2001.
        This historic undertaking to discover the genetic blueprint of
    human beings will enable scientists to identify more genes responsible
    for diseases and develop new and diagnostic and treatment
    possibilities.
        Now the Office of Science is harnessing the biotechnology
    revolution to develop clean energy and repair damage to our environment
    through the Genomes to Life Initiative.
                      expanding the frontiers of discovery
        The Office of Science funded the research that led to one of the
    great intellectual achievements of the 20th century: the discovery of
    all but one (the electron) of the most fundamental constituents of
    matter, namely quarks and leptons, which confirmed the Standard Model--
    physicists' current theory of matter and the forces of nature--and led
    to 13 Nobel Prizes.
        The Office of Science supported the 1996 Nobel Prize-winning
    discovery of a new form of carbon, known as ``Bucky Ball,'' which is
    spurring a revolution in carbon chemistry and may lead to a profusion
    of new materials, polymers, catalysts, and drug delivery systems.
        Now the Office of Science is underwriting research to solve the
    mystery of ``dark energy,'' perhaps responsible for the remarkable
    recent finding that the expansion of the universe is accelerating,
    rather than slowing due to gravity as expected.
                improving the science of climate change research
        The Office of Science initiated the Climate Change Research Program
    in 1978 to evaluate the environmental and health consequences of long-
    term energy solutions. This was the first research program in the U.S.
    to investigate the effect of energy-related emissions of greenhouse
    gases, especially carbon dioxide, on climate and the environment.
        The Office of Science also has developed software and computer
    systems to model and simulate environmental conditions and project
    climate change under varying emissions scenarios.
        The Office of Science's climate change research program is the
    third largest in the United States--and the only one that is focused
    specifically on improving the scientific basis to understand, predict,
    and assess the effect of energy-related emissions on climate and the
    environment.
                          enhancing national security
        The Office of Science has funded research leading to technologies
    that make our lives safer in many ways. These include:
      --neutron detectors that can identify concealed nuclear weapons and
            land mines and are used for arms control and nonproliferation
            verification;
      --new holographic computerized imaging technology that identifies
            hidden weapons, even non-metallic ones, through the clothing of
            airline passengers;
      --smoke detectors that sense smoke by detecting changes in the
            ionization of the air; and
      --advanced sensors that can detect explosives, narcotics, and
            chemical and biological agents--and many other innovations that
            will contribute to homeland security.
                           improving energy security
        The Office of Science has contributed to improved energy savings
    through several discoveries, including:
      --lithium batteries that offer high-energy storage capacity and an
            environmentally benign alternative to the harmful lead used in
            conventional batteries;
      --new and improved metals, plastics and other composite materials
            used in military hardware and motor vehicles; and
      --superconducting wires that can lead to more efficient types of
            power generation, transmission, and electrical devices--and
            thereby save energy and reduce emissions.
        In addition, the Office of Science's research into fusion energy is
    poised to pay big dividends. Scientists are figuring out the way the
    sun and stars produce their energy--and that can have broad
    applications for mankind, since fusion power holds important promise as
    a clean, inexhaustible energy source.
                                medical imaging
        The Office of Science is responsible for key advances in positron
    emission tomography (PET) and magnetic resonance imaging (MRI), which
    permit non-invasive and improved detection and diagnosis of medical
    conditions.
                          restoring sight to the blind
        The Office of Science is now sponsoring research and development of
    an artificial retina, which can restore sight in blind patients with
    macular degeneration, retinitis pigmentosum, and other eye diseases.
        A microelectronic chip implanted in the eye captures light signals
    and visual information, bypasses damaged photoreceptors, and
    electrically stimulates viable layers of the retina, thereby enabling
    the blind to see.
                            enabling world-class r&d
        Throughout its history, the Office of Science Development has
    designed, constructed and operated many of the most advanced research
    and development facilities in the world, which keep the United States
    in the forefront of scientific discovery and technological innovation.
        These include neutron scattering facilities, synchrotron radiation
    light sources, the superconducting Tevatron high-energy particle
    accelerator, the world's first linear collider, the continuous electron
    beam accelerator, the relativistic heavy ion collider (the highest-
    energy ``atom smasher'' in the world) and a Tokamak fusion test
    reactor.

        [Clerk's Note.--Attachments included with the preceding
    information have been retained in subcommittee files.]
        Senator Dorgan. Well, let me again say I will be anxious to
    work with you.
        And, Mr. Chairman, thank you for allowing me the
    opportunity to----
        Senator Domenici. You are welcome.
        I noticed when you mentioned the location of these science
    facilities, you mentioned the four big States. One little State
    does all right, New Mexico.
        Senator Dorgan. I just did not want to advertise it.
        But I know how well New Mexico does, Mr. Chairman.
        Senator Domenici. That is because we have those big nuclear
    laboratories and have to put up with all that nuclear stuff for
    so long. Such a terrible burden; that is what some people
    think. They want to close them up. If they have any more Los
    Alamoses or Sandias, open them up in our State. That would be
    fine.
        I am just kidding, you understand.
        Let me just say to all of you that I am very, very pleased
    with the way the whole Department is growing in terms of
    science. I am somewhat concerned that we move ahead as quickly
    as possible in the nuclear research areas, because there seems
    to me to be no way out for us and for the world but to find a
    new generation of nuclear power plants.
        And, Mr. Magwood, I know that you are charged with that.
    And we will try in our new energy bill to even broaden that
    authority and move on with it. You are charged under the Energy
    Department to move ahead with the next generation. You call it
    nuclear power IV. What does that phrase mean in terms of moving
    ahead with that research?

                          GENERATION IV NUCLEAR ENERGY

        Mr. Magwood. I think you are referring to the Generation IV
    Nuclear Energy Systems Initiative.
        Senator Domenici. Correct.
        Mr. Magwood. While we have very good technologies available
    today that are available to the market, the technologies such
    as the AP 1000, the ABWR from U.S. companies, and others that
    are available internationally, there is a prospect that we
    might be able to develop new advanced technologies that deliver
    on the original promises of nuclear energy, that is,
    technologies that are incredibly safe and present no
    conceivable hazard to people outside of the plant site,
    technologies that are extraordinarily economic and competitive
    even with natural gas, and technologies that eliminate the
    issues about proliferation.
        We believe this is possible in a new generation of
    technologies. What we have accomplished so far is that the
    international community has agreed on what those technologies
    might be. Now is the time, as you have mentioned, to move from
    the planning stage, now that we have decided what those
    technologies could be, to the laboratory and ultimately to the
    field to prove that these technologies work.
        Senator Domenici. Well, do you feel comfortable with the
    level of funding in the budget? Are there one or two items that
    you would like to share with us, either on the record or later,
    that are of importance to you with reference to being
    underfunded, as far as moving us forward in the nuclear area?
        Mr. Magwood. We really are on the very beginning of what I
    think is a very exciting time for our activities. There are
    things that we will be able to do as time goes on that will
    require more funding. For where we are right now, I think we
    are doing okay. I am very pleased with the budget request that
    we have put forth. I believe that as our plans become public,
    there will be opportunities in the future that will require
    additional resources, but I think well-deserved resources.

                              DOMESTIC ENRICHMENT

        Senator Domenici. Let me just stay with you for a minute.
    The Department has commented on the need for a new domestic
    enrichment capacity as a means of maintaining a reliable and
    economical U.S. enrichment industry. One of the ventures that
    is being bantered around as an opportunity to accomplish this
    is led by the European consortium of Urenco, a company with a
    proven record in centrifuge enrichment technology. I know that
    you are familiar with that company and with that process, are
    you not?
        Mr. Magwood. Yes, I am.
        Senator Domenici. Do you have any concern that the efforts
    of Urenco to build a new facility in the United States would in
    any way pose a national security concern?
        Mr. Magwood. No, none at all.
        Senator Domenici. Do you believe that the development of
    new enrichment capacity is sufficiently important to the United
    States, as far as our energy security, that the development of
    this facility by Urenco should be encouraged and facilitated by
    the Department of Energy?
        Mr. Magwood. Absolutely. We are doing everything we can to
    help at this stage.
        Senator Domenici. That is already happening.
        Mr. Magwood. Yes.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. I thank you. And I thank all of you. And
    the questions we give you, please answer them as soon as you
    can.
        [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
     international thermonuclear experimental reactor project within fusion
        Question. Dr. Orbach, each of the sub-programs funded under your
    office are looking and planning towards substantial new research
    investments or construction of the ``next big user facility'' that will
    occupy the construction wedge that has been filled in recent years by
    the SNS construction project, and will be filled in the next few with
    the construction of the nanoscale science centers. Almost all of these
    projected expenditures are beyond what is contemplated in the projected
    baseline for the Office of Science. I would like to go over some of
    those with you.
        Dr. Orbach, you've outlined the Administration's recommendation for
    the United States to rejoin the international fusion energy
    experimental program, called ITER (for the International Thermonuclear
    Experimental Reactor.) Our participation in ITER will cost $1 to $1.5
    billion over the next 10 years. The Administration has proposed taking
    a very timid step down that path by requesting only $2 million for
    fiscal year 2004. When will the big expenditures come?
        Answer. Assuming that the negotiations proceed as planned,
    construction of ITER is currently planned to start in 2006, so we would
    expect to request construction funding in our fiscal year 2006 budget
    proposal. Also, the Administration has requested $12 million for fiscal
    year 2004.
        Question. Why should the Congress or our international partners for
    that matter, believe the Department will secure the resources to both
    make our international contributions and maintain a healthy program
    here in the United States?
        Answer. Secretary Abraham has stated publicly his intention to
    request additional funds for the construction of ITER as well as for
    the maintenance of a robust domestic fusion program. Further, President
    Bush said on February 6, in the context of the Hydrogen Fuel
    Initiative, that he looked forward to working with you on a successful
    effort on the ITER project.
        Question. Is the Administration prepared to request the increased
    budgets in future years to meet this large commitment without
    negatively impacting other Science programs?
        Answer. The Administration will continue to request budgets that
    honor our commitment to the ITER project while maintaining a strong
    research program across the Office of Science.
        Question. Since ITER represents only one of several promising
    fusion research directions, will the Department continue to fund
    alternatives to the ``tokamak'' path towards fusion that is the focus
    for ITER?
        Answer. Yes, the Secretary restated his commitment to a robust
    domestic program as he announced the President's decision to join the
    ITER negotiations. Part of that robustness is the continuation of our
    program in innovative confinement concepts as we strive to prepare for
    the most attractive energy embodiment of fusion in the future.
                               advanced computing
        Question. Last year, Japan raced ahead of the United States in the
    high-performance computing wars when it completed the world's fastest
    computer--the 40 teraflop Earth Simulator. As you are aware, the
    Japanese Earth Simulator was based on vector architecture that the U.S.
    supercomputing industry had largely abandoned. What does the United
    States need to do to catch up?
        Answer. As you may know, much of the U.S. computer industry takes
    exception to premise that we have lost leadership (broadly defined) in
    high-performance computing because of a single Earth Simulator.
    Nevertheless, I take your question as addressing leadership in the
    areas of computational science for which the Earth Simulator has been
    designed, such as climate change. To revitalize and/or ensure ongoing
    U.S. leadership in strategic areas of computational science, we need to
    initiate an aggressive R&D program based on a strategy to deliver world
    class supercomputers for scientific applications. The program must be
    coordinated with DOE-NNSA and other Federal agencies with high-
    performance computing missions, to leverage existing investments in
    high performance computing and to establish a single, inter-agency
    strategy for high-performance computing. We expect to participate in
    this endeavor by supporting academic researchers, national laboratory
    scientists and engineers in partnerships with the U.S. computer
    industry to tailor computer designs and to provide the software
    programming infrastructure needed to ensure maximum performance of
    codes on complex scientific systems. We need to establish a computing
    capability to solve key DOE civilian science mission problems that is
    at least a factor of 50 greater than the present.
        Question. What kind of supercomputing platforms do you need for the
    types of problems you are challenged with in the Office of Science?
        Answer. Our computational scientists need supercomputing platforms
    that are easy to use and are free of the bottlenecks that presently
    constrain the performance of their codes on scientific applications.
    Due to the breadth of the Office of Science research portfolio, we
    envision our high-performance computational needs will be met by a
    suite of super computer architectures and software programming
    environments. We expect this suite of architectures will consist of
    high-performance variations of scalar systems, vector architectures and
    approaches that are currently considered novel.
        Question. How will you get them and how much will it cost?
        Answer. We will foster the development of these systems by working
    with all interested U.S. vendors to influence future offerings to meet
    the needs of our computational scientists. Supercomputer platforms will
    be acquired based on a competitive evaluation and review of systems
    offered by vendors. Performance on actual scientific applications will
    be one of several review criteria. Before we are in a position to
    evaluate prospective systems, we need to embark on a long-term
    commitment of establishing research partnerships between application
    scientists, computer scientists and supercomputer designers.
        Although we expect to take advantage of commercial market drivers
    whenever feasible, we do recognize that these supercomputing platforms
    are likely to be in the specialty category of vendor offerings.
    Therefore, it is conceivable that each supercomputer platform could
    cost several hundred million dollars. Future special purpose
    architectures targeting certain applications might be cheaper if the
    full suite of partnerships mentioned above were supported.
        Question. Credible experts argue that we will need to spend an
    additional $500 million over what we have planned for the next 4 years
    in order to catch-up. Do you agree?
        Answer. The Administration is still in the process of developing a
    government-wide strategy for high-end computational science, so it is
    premature to directly answer your question.
                               nanoscale research
        Question. In fiscal year 2003, the Congress added $4.5 million to
    begin construction of the Center for Integrated Nanotechnology in my
    home State of New Mexico. This year, I am pleased to see the Department
    request $30 million more for the construction of this $75 million
    facility. The Department is also proceeding with construction of four
    other centers around the country. I am concerned that the current
    Science baseline budget does not include sufficient research dollars to
    effectively utilize the five nanoscale centers that will be constructed
    over the next few years--requiring an additional $350 million over the
    next 3 years. Are we building too many centers, too fast, without
    planning for the resources to utilize them?
        Answer. The five Nanoscale Science Research Centers that are under
    construction (one joint with the State of Illinois) as well as their
    subsequent operations funding which includes user support and research
    support are all accommodated within the Science baseline budget
    presented in the President's Budget Request. These Centers are a high
    priority for the Administration and the Department, because they offer
    unique capabilities and build on the investments in the major
    synchrotron radiation light sources and neutron scattering facilities
    that are already in place at the Department's laboratories.
                  genomes to life and other funding shortfalls
        Question. The Department wants to grow the ``Genomes to Life''
    program in a way that will realize the promises of the Human Genome
    Project, but that will require $850 million to build the necessary
    research facilities. In addition, you have expressed your desire to
    grow the Science Teacher Workforce Development program. Furthermore, we
    are always under pressure to provide additional money for better
    utilization of our existing science facilities. So, my questions to you
    are as follows. How do we find the resources to do all of these things?
    Or have we ``bitten off more than we can chew''?
        Answer. The President's budget request before the Congress
    represents a substantial step in allowing us to exploit the scientific
    opportunities before us. The programs that you mention are multi-year
    efforts, and we have to continue to prioritize and make tough choices
    in these times of constrained budgets. The completion of some projects,
    along with reduced funding requirements for the Spallation Neutron
    Source effectively provides a 5 percent increase in funding for
    science, allowing us to strengthen our research programs while also
    increasing operating times at our user facilities, and beginning a new
    pilot program at Argonne National Laboratory to train K-14 science and
    math teachers.
                               science education
        Question. Dr. Orbach, I appreciate the emphasis in your testimony
    on a $1 million pilot program for improving the science and math
    qualifications of teachers in our K-14 educational system in answer to
    the President's call for ``qualified teachers in the classrooms.'' As
    you know, such programs were conducted some years ago by the DOE. I
    know from many personal testimonies that these programs were highly
    successful in New Mexico. I really question whether you need any pilot
    program at all. My recommendation is that you simply restart the
    successful programs of a few years ago at levels far higher than $1
    million. Would you be willing to provide an estimate of how large a
    program the Department could undertake in fiscal year 2004 in this
    vital area?
        Answer. Our National laboratories have continued to support
    fellowship and internship opportunities through their education and
    workforce development offices. In most respects, these offices have
    dramatically improved in their quality assurance and efficiency. Our
    entire application, placement, tracking and evaluation system is
    online. The President's fiscal year 2004 request allows for a robust
    pilot program.
                          funding of science programs
        Question. Dr. Orbach, fiscal year 2004 is the third year of
    basically flat budget requests for the Office of Science. I think the
    Department and Administration must start requesting significant
    increases in the budgets for the Office of Science. Since that office
    is the largest supporter of research in most physical sciences, I fear
    that we are seriously jeopardizing the competitiveness of our Nation by
    short-changing developments in these areas. In fact, our rush to fund
    health sciences through the NIH, without comparable funding to the
    Office of Science, may prevent us from realizing our goals in the
    health sciences. After all, many developments in health sciences also
    require advances in the physical sciences, we need strong health and
    physical sciences to truly enable advances. Do you share my concern
    that we must do more to increase the Nation's talent pool in the
    physical sciences and that increased budgets for the Office of Science
    are critically important in future years?
        Answer. Senator, before answering, let me thank you for your strong
    support for science and education. I do share your concern. I believe
    that we need to do whatever we can to encourage U.S. students to choose
    careers in mathematics, science and engineering. It is for that reason
    that our budget request proposes a pilot program for training of K-14
    mathematics and science teachers. I would point out, however, that when
    a combination of reduced requirements for funding in one time programs
    and large construction projects are taken into account, funding for the
    Office of Science in the President's budget requests for fiscal year
    2003 and fiscal year 2004 represented increases for science well above
    the rate of inflation.
        Question. Do you believe the United States is in danger of losing
    its global competitive edge to the Japanese or the Germans or the
    French because the Federal Government has ignored basic research
    funding for the physical sciences?
        Answer. A strong program of basic research in the physical sciences
    and a scientifically literate workforce are essential to the continued
    innovation that underpins our global competitiveness, and I believe
    that the President's budget request for science will fund a strong and
    balanced program of scientific research for the Nation.
                          low dose radiation research
        Question. I helped initiate your important program in low dose
    radiation research a few years ago, to try to better determine health
    risks from exposures to low levels of ionizing radiation. This research
    could have far-reaching implications, from improved cleanup standards
    for DOE sites to better appreciation of the risks associated with
    operations involving radioactive materials. With the National Academy's
    seventh study on Biological Effects of Ionizing Radiation (called BEIR
    VII) nearing a conclusion, results from this program are especially
    timely. In past years, this budget has been reduced in budget requests,
    only to be restored by Congress. I appreciate that this year the
    request of $17.5 million is close to the current year level of $17.8
    million. But it's my understanding that the DOE's own program plan for
    this study calls for budgets of about $25 million. Is this work
    advancing the state of knowledge in this critical area at a pace to
    impact the BEIR VII study?
        Answer. Yes, while the Low Dose Radiation Research program is
    effectively in its fourth year of funding and, as you correctly note,
    funding has always been at a level $4 to $8 million below that
    recommended by the Advisory Committee for the Biological and
    Environmental Research program, the low dose program is already having
    a substantial scientific impact. Building on decades of radiation
    biology research we can now study the biological effects of radiation
    with research approaches that are 10, 100, or even 1,000 times more
    sensitive than those previously used. Progress has been made in our
    ability to study lower, more realistic doses of radiation by a
    combination of knowledge from past research, from new, more sensitive
    technology, and from advances such as those provided by the Human
    Genome Project. Today, for the first time, scientists have actually
    been conducting research that overlaps or approaches the maximum
    allowable radiation doses above background for the public (100 mrem/
    year above background) or for nuclear workers (500 mrem/year above
    background). The BEIR VII committee bases their report on information
    received from expert scientific testimony and from peer reviewed
    scientific publication. To date, the Low Dose Radiation Research
    Program has resulted in over 190 new papers in the scientific
    literature. The director at the National Academies for BEIR VII is well
    aware of the Low Dose Radiation Research Program and has been given a
    list of publications resulting from the program. Thus, the BEIR VII
    will certainly consider the results of this research program in their
    deliberations.
        Question. And is it resource constrained in its progress?
        Answer. We believe that the original estimate made by the
    Biological and Environmental Research Advisory Committee for a 10-year,
    approximately $220 million research program, while unconstrained by the
    realities of tight budgets, is still a reasonable estimate to optimize
    progress through the normal, iterative process of scientific discovery.
    To date, including the current fiscal year (fiscal year 2003), the
    program has invested approximately $82 million in new low dose
    radiation research.
                      science in an underground laboratory
        Question. Last year there was a review by NSF to explore deep
    underground sites for sensitive nuclear experiments. As part of their
    review, there was strong recognition that some experiments require the
    deepest location--like the Homestake mine--and others benefit more from
    the ultra-low background, ultra-clean conditions, and superb
    infrastructure associated with the Waste Isolation Pilot Plant at
    Carlsbad. I provided funding within the EM budget this year to start a
    neutrino experiment at WIPP. But logically, these experiments should be
    championed within the Office of Science. Will the Office of Science
    seriously evaluate and champion opportunities for key experiments in
    the environment provided by WIPP?
        Answer. The Office of Science endeavors to support the most
    interesting and promising experiments in all fields of basic research
    consistent with its mission. We are aware of scientific opportunities
    presented by a wide range of possible underground experiments, though
    we have not received any formal proposals for such experiments. We are
    also aware that there is an ongoing scientific debate about the
    technical criteria for an underground site that is dependent upon the
    needs the various experiments. Nevertheless, the Office of Science is
    keenly aware of the Waste Isolation Pilot Plant's (WIPP) mission to
    dispose of defense-related transuranic waste to protect human health
    and the environment. WIPP is a critical facility for the Office of
    Environmental Management's (EM) efforts to accelerate cleanup at sites
    across the DOE complex.
        Last year, as ordered by Secretary Abraham, EM completed a top-to-
    bottom review of its cleanup program and concluded that significant
    change was required in how the Department attacked risk reduction and
    cleanup of its sites. A major finding of the review was the need to
    realign the EM program so its scope is consistent with an accelerated,
    risk-based cleanup and closure mission. The review team underscored the
    necessity that EM should redirect, streamline, or cease activities not
    appropriate for accelerated cleanup and closure.
        Utilizing WIPP to conduct science experiments, no matter how
    meritorious, would represent a major commitment of EM financial and
    administrative resources for implementation and oversight of these
    activities, which would not be consistent with the Administration's
    accelerated cleanup initiative. A laser-like focus on EM's core mission
    is needed to realize the cleanup of the Cold War legacy in our
    lifetime.
                         global climate change research
        Question. The Department of Energy has had a long-standing role in
    the Global Climate Change research agenda. The White House just
    recently announced a new Global Climate Change strategy. Can you
    describe for me the role that the Department of Energy will have in the
    new White House agenda and the need for enhanced research on Global
    Climate Change that would take advantage of the assets in DOE's
    laboratories?
        Answer. The Department's role in the new White House agenda for
    climate change Research will focus on improving climate models by
    resolving major uncertainties in estimates of the sensitivity of the
    climate system to various factors such as clouds and aerosols. Climate
    change research supported by the Department will also help resolve the
    magnitude and location of the North American carbon sink, and provide
    improved methods and models for assessing the environmental and
    economic costs and benefits of climate change, and of different options
    and strategies for mitigating the change. Enhancements of Global
    Climate Change Research that would take advantage of assets at DOE
    laboratories include climate modeling and ecological processes.
    Enhanced climate modeling research would enable researchers to take
    greater advantage of computing facilities and computer science
    capabilities at DOE laboratories, and to allow climate and carbon cycle
    modelers at DOE laboratories to more fully utilize the data and
    information coming from other DOE climate change research programs such
    as the Atmospheric Radiation Measurement program and Ocean and
    Terrestrial Carbon Cycle Research programs to develop, test, and
    improve fully-coupled climate models. Enhancement of research on
    ecological processes would provide the opportunity to more fully
    utilize the unique interdisciplinary capabilities and facilities at DOE
    laboratories in molecular biology, ecological genomics, ecology, and
    computer modeling and simulation. The research would investigate how
    complex ecological systems respond to climate and atmospheric changes
    and how their capacity to, for example, sequester carbon from the
    atmosphere and adapt to or recover from potential adverse impacts of
    such changes can be enhanced.
                           science lab infrastructure
        Question. Dr. Orbach, the Office of Science manages 10 science labs
    that represent a Federal investment of tens of billions of dollars in
    the most advanced scientific user facilities in the world. The annual
    budget process seems to rarely reward the prudent and responsible
    program manager who reinvests in infrastructure to maintain the
    facilities. Two years ago this Committee initiated a Facilities and
    Infrastructure program for the NNSA to reinvigorate the NNSA weapons
    complex and it is starting to make a significant difference. Dr.
    Orbach, do you believe the Science facilities that you oversee need a
    significant infrastructure reinvestment to revitalize the Science Labs
    research facilities and would you be willing to budget for such an
    initiative?
        Answer. The Office of Science has identified over $1.5 billion of
    line item projects to renovate, modernize and replace existing
    buildings and support facilities at the SC laboratories to better
    support our research missions. A complete listing and description of
    the projects can be found at the SC web site: http://
    www.science.doe.gov/SC-80/sc-82 under ``Infrastructure Needs
    Assessment.'' I am working with the laboratories to develop a strategy
    for funding infrastructure improvements.
                   future nuclear energy budget requirements
        Question. Mr. Magwood, as I indicated in my opening statement, I am
    generally encouraged with the progress in nuclear R&D. The Department
    now has in place the structure of a well-thought-out nuclear R&D
    program that addresses the near-term goal of bringing a new plant on
    line through the Nuclear Power 2010 program; while performing the R&D
    necessary for nuclear power to support the growing demand for
    electricity world-wide over the next 50 years through the Generation IV
    Program and the Advanced Fuel Cycles Initiative. All of these
    initiatives require funding well in excess of what is provided in the
    current baseline?
        Answer. We are confident that the fiscal year 2004 budget request
    for these programs will meet the near-term needs of these programs,
    most of which are at the early stages of development. We will evaluate
    future funding needs as we more precisely define the areas of work and
    implement these initiatives. Clearly, significant resources would be
    needed to support the development, design, and deployment of innovative
    technologies to achieve the economic and energy security benefits of
    the programs. Whatever course our activities take, we expect the
    funding the Department requests to be highly leveraged with our
    international and U.S. industry partners.
        Question. What level of resources will be required to achieve the
    stated goals of each of these initiatives over the next 10 years?
        Answer. The Generation IV Nuclear Energy Systems Initiative is in
    an early stage of development. The highest priority Generation IV
    project is pursuing advanced nuclear technology that can produce both
    cost-effective hydrogen and very efficient electricity production. The
    out-year funding plan for Generation IV activities is currently being
    developed. Discussions with potential collaborating partners are
    underway and we anticipate substantial cost-sharing with both industry
    and the international community. The estimated costs for AFCI research
    and development over the next 10 years are presently under review by
    the Administration and have not been finalized.
        Question. What is the Department's funding strategy?
        Answer. The Department is in the early stages of implementing the
    Generation IV nuclear energy systems initiative and the Advanced Fuel
    Cycle Initiative. Regardless, the Department intends to leverage a
    modest Federal investment with collaboration with our international
    partners.
        Question. What kind of resources can we reasonably expect from
    international or industry collaborators?
        Answer. We are currently exploring cost-sharing arrangements for
    the design, licensing, construction, and startup of the Very-High-
    Temperature Reactor (VHTR) with potential domestic and international
    partners, both private and government. Substantial cost-sharing is
    expected. Over the past 3 years, the AFCI program has established two
    major international collaborative agreements which have provided over
    $100 million worth of analytical and experimental data to the program.
    One agreement is with the French Commissariat a l'Energie Atomique, and
    the other agreement is with the Paul Sherrer Institute in Switzerland.
    Also, the Secretary of Energy recently signed an agreement with the
    European Commission, which provides for collaborative AFCI research and
    development with European countries.
                          nuclear hydrogen initiative
        Question. Hydrogen technologies will only allow us to free
    ourselves from dependence on foreign oil if we can economically produce
    it in a manner that does not harm the environment. Current methods of
    producing hydrogen based on fossil-fuels are far too costly. I am
    hopeful that one or more of the Generation IV reactor technologies
    would allow us to generate hydrogen on a scale that would support a
    future hydrogen based economy. I commend the Department for requesting
    $4 million specifically for the nuclear hydrogen initiative. What level
    of resources would the Department need to develop and demonstrate on a
    pilot scale a nuclear reactor for hydrogen production?
        Answer. The Department's new Nuclear Hydrogen Initiative is
    designed to develop and demonstrate advanced technology hydrogen
    production systems using nuclear energy. The Department plans to
    achieve this goal by constructing progressively larger scale
    demonstrations using non-nuclear heat sources, designed and optimized
    to be eventually driven by heat from a high temperature nuclear system.
    The Department is also exploring partnerships with industry and the
    international community that could support a full-scale prototypical
    system to demonstrate the commercial scale production of hydrogen. With
    funds provided by Congress in fiscal year 2003, we are currently
    developing a hydrogen technology roadmap which will define the
    development program leading to a pilot scale experiment. The funding
    estimates for a pilot scale facility will be developed over the next
    several months.
        Question. Can we do it on the time-scale of the President's broader
    hydrogen timeline of 2015 to 2020?
        Answer. We believe nuclear-based production of hydrogen could be
    deployed on the time-scale of the President's 2015-2020 hydrogen
    timeline.
                         nuclear power 2010 initiative
        Question. Three years ago, this Subcommittee led the way in
    creating a new R&D program in Nuclear Energy Technologies. The effort
    has been focused on both near-term and longer-term development of next
    generation power reactors. There are great opportunities to deploy new
    reactors that would have superior economics, no possibility of a core-
    meltdown, reduced waste, and more proliferation resistant. I commend
    the Department for providing $35 million to support a near-term effort
    with the goal of having new advanced reactors operating in the United
    States by 2010. Can you elaborate on this program in greater detail and
    provide an update?
        Answer. The Department believes it is in the Nation's interest to
    deploy new baseload nuclear generating capacity within the decade to
    achieve the National Energy Policy objectives of energy supply
    diversity and security while minimizing the impact on the environment.
    To enable the deployment and operation of new, advanced nuclear power
    plants in the United States by the end of the decade, it is essential
    to demonstrate the new, untested Nuclear Regulatory Commission (NRC)
    regulatory and licensing processes for the siting, construction, and
    operation of new plant designs. In addition, research and development
    on near-term advanced reactor concepts that offer enhancements to
    safety and economics is needed to enable these new technologies to come
    to market.
        In fiscal year 2002, the Department initiated the Nuclear Power
    2010 program. This program is a joint government and industry cost-
    shared effort to identify sites for new nuclear power plants, develop
    advanced nuclear plant technologies, and demonstrate new regulatory
    processes that support a private sector decision by 2005 to order new
    nuclear power plants for deployment in the United States within the
    decade.
        As an initial step in the Nuclear Power 2010 program to demonstrate
    untested regulatory processes, the Department is cooperating with three
    power generation companies--Exelon, Entergy and Dominion Resources--to
    demonstrate the Early Site Permit (ESP) process at sites where these
    companies currently operate nuclear power plants (Clinton Nuclear Power
    Station, Grand Gulf Nuclear Power Station, and North Anna Nuclear Power
    Station, respectively). This regulatory process is intended to approve
    sites for the construction of new nuclear power plants in advance of a
    utility commitment and order for the nuclear plant. Within the scope of
    these 50/50 cost-shared industry cooperative projects, the three power
    generation companies will develop and submit formal ESP applications to
    the NRC by fall of 2003. NRC's approval of the then-submitted ESP
    applications is expected in early 2006.
        In 2003, the Department plans to expand its cooperation with the
    nuclear industry by soliciting additional cooperative projects with
    power companies or consortia of power and industry companies that
    implement power company plans to deploy new nuclear plants. Cooperative
    projects would include activities to demonstrate the combined
    Construction and Operating License (COL) process and develop a
    standardized advanced nuclear plant designs.
        The Department has also initiated in fiscal year 2003 a cost-shared
    project with industry to assess the construction schedule, manpower,
    and cost requirements of the new advanced nuclear plant designs being
    considered by power companies for near-term deployment and to identify
    promising improvements in construction methods and techniques to
    shorten the construction durations for these next new nuclear power
    plants.
        Question. Does the Department still plan on initiating a cost-
    shared project with a utility to demonstrate the ``Construction and
    Operating License'' process?
        Answer. The Department believes that demonstration of the combined
    Construction and Operating License (COL) process is essential to
    achieve near-term deployment of advanced nuclear power plants in the
    United States. In fiscal year 2003, the Department plans to issue a
    solicitation to seek proposals from power companies or consortia of
    power and industry companies for projects that enable a new nuclear
    power plant to be ordered and licensed for deployment in the United
    States within the decade. This project will provide for design
    completion of a standardized advanced reactor plant, preparation and
    submission of a COL application and support of NRC review, and hearings
    associated with the application.
        Question. What recommendations can you provide to this committee as
    to how the government can address the financial and business risk
    associated with building and licensing new nuclear plants?
        Answer. There are currently three ways that an electric generating
    company could finance a new nuclear plant: by obtaining commercial debt
    financing, through equity financing, or a combination of both. These
    options are not currently attractive because of significant financial
    barriers and risks associated with building the first few new nuclear
    plants. Last year, Sculley Capital, an independent financial advisory
    firm, conducted a study for DOE of barriers to new nuclear plant
    deployments and identified a range of financial assistance mechanisms
    that could address the financial risks associated with building the
    first few new nuclear plants. The study concludes that substantial cost
    improvements in the cost per kilowatt-hour would be realized following
    deployment of the first few plants, thereby allowing future builds to
    be fully competitive in the electricity marketplace. This study has
    sparked an ongoing discussion both inside the government and in the
    private sector, but no conclusions have yet been reached in either.
                       nasa's nuclear systems initiative
        Question. The fiscal year 2003 NASA budget proposed a ``nuclear
    systems initiative'' to develop new radioisotope power systems for on-
    board electric power on future space platforms. It would also conduct
    research and development on nuclear electric propulsion systems that
    would allow future space craft to speed throughout the outer reaches of
    the solar system. NASA has proposed spending up to $1 billion in the
    next 5 years. What has transpired over the last year?
        Answer. A significant amount of planning and coordination between
    NASA and the DOE has taken place in preparation for NASA's Nuclear
    Systems Initiative, now named ``Project Prometheus.'' Activities
    conducted under existing programs at DOE were focused to help prepare
    for the initiation of the effort. For example, with regards to the
    radioisotope power systems, a DOE contract was awarded to Lockheed
    Martin Astronautics for a Stirling Radioisotope Generator, and industry
    proposals for a Multi-Mission Radioisotope Thermoelectric Generator are
    now being evaluated by the Department. Also, the purchase of 1 kilogram
    of Pu-238 from Russia is underway.
        With regard to the nuclear electric propulsion part of Project
    Prometheus, NASA Research Announcements (NRA's) were issued for power
    conversion and electric propulsion technology contracts. Initial space
    reactor power system screening activities were completed using an
    integrated team of specialists from DOE laboratories and NASA centers
    to assess combinations of reactor and power conversion technologies and
    a briefing on these screening activities was provided to industry. DOE
    labs have also supported definition of three reactor concepts for
    future consideration. A draft RFP was also developed by NASA with
    support from DOE for mission and technology trade studies associated
    with a Jupiter Icy Moons Orbiter Mission (JIMO) in order to prepare for
    possible future industry engagement.
        These activities have helped to prepare for initiation of a
    coordinated effort between NASA and DOE as Project Prometheus now
    commences its first year.
        Question. What role will be DOE's role in this exciting new effort?
        Answer. DOE will continue as the executing agent for the
    development of Radioisotope Power Systems. These efforts will include
    the Stirling Radioisotope Generator (SRG), the Multi-Mission
    Radioisotope Thermoelectric Generator (MMRTG), the performance of
    safety analyses, and the procurement of additional Plutonium-238 as
    needed in support of the radioisotope program and potential future
    missions. For the development of space fission reactor technology, or
    the nuclear electric propulsion part of Project Prometheus, NASA and
    DOE are currently examining the best approach for management of the
    development effort within the Department. These reviews are ongoing and
    include consideration of possible participation by DOE's Offices
    Nuclear Energy, Science and Technology and Naval Reactors.
                      advanced nuclear medicine initiative
        Question. The Advanced Nuclear Medicine Initiative (ANMI) provides
    basic research and educational grants in the field of nuclear medicine.
    These R&D grants have yielded exciting results for the development of
    new radiopharmaceuticals, insights in radiobiology, and possible new
    methods of treating cancer. In recent years, the program has been
    funded at the level of $2.5 million per year. In fiscal year 2003,
    funding was dropped to zero. The Department has also proposed changing
    the manner in which it provides radioisotopes to the research
    community. The Department proposed this on the theory that it could
    reach agreement with other sources (most likely NIH) to support this
    important mission. Has the Department secured such an agreement? If
    not, what are the prospects?
        Answer. Department of Energy officials are at the beginning stages
    of discussion with officials of the Department of Health and Human
    Services, including the National Institutes of Health on the subject of
    obtaining support from NIH for production of isotopes associated with
    medical research sponsored by NIH. There is broad support for medical
    research in development of new radiopharmaceuticals both within the
    government and the private sector, and we are confident that as the
    benefit for this research is demonstrated that there will be increased
    support for offsetting the costs associated with the production of
    medical research isotopes.
        Question. Would you comment on the record how a DOE sponsored
    revolving fund might be used to support this mission?
        Answer. As was done with the Advanced Nuclear Medicine Initiative
    in fiscal year 2000, the revolving fund could be a suitable vehicle for
    supporting medical isotope research, including production of isotopes
    for such research.
                         advanced fuel cycle initiative
        Question. I commend the Department for supporting the Advanced Fuel
    Cycle work that this committee has strongly supported over the last few
    years. Will you describe for the committee some of the successes of the
    AFCI program, its relationship to the Generation IV reactor program,
    and what your expectations are for the next few years?
        Answer. The goals of the Advance Fuel Cycle Initiative are to
    develop fuels and fuel cycle technologies required for the Generation
    IV Nuclear Energy Systems Initiative and to develop advanced spent fuel
    treatment and transmutation fuel technologies to optimize the
    performance of the Yucca Mountain repository and delay or eliminate the
    technical need for a second repository.
        In fiscal year 2002, the program had several important
    accomplishments. In the area of spent fuel treatment, the Department
    developed UREX+ technology and successfully demonstrated the separation
    of uranium from commercial spent fuel at a purity level of over 99.99
    percent, which is equivalent to low-level Class C waste. Since spent
    fuel is made up of 95.6 percent uranium, this is clearly a major
    demonstration of the potential for reducing the volume of spent fuel
    destined for a geologic repository. Other major successes include the
    development and manufacture of advanced non-fertile fuels (i.e., fuel
    which does not produce plutonium during the fission process). Both
    nitride and metal advanced non-fertile fuels have been manufactured and
    have passed quality assurance standards necessary to qualify for
    irradiation testing in the Advanced Test Reactor. This activity
    directly supports Generation IV fast-spectrum reactor fuel development.
        As described in the AFCI Report to Congress, issued in January
    2003, the AFCI program is pursuing parallel paths, AFCI Series One and
    AFCI Series Two, to develop technologies both in support of the
    Generation IV program and spent fuel treatment and transmutation. AFCI
    Series One technology development is an intermediate term activity
    which is focused on the developing advanced spent fuel treatment
    technologies. Specifically, this technology separates various isotopic
    components from commercial spent nuclear fuel, including the extraction
    of uranium at a purity of greater than 99.99 percent for potential
    reuse, or storage as low-level waste. In addition, the program is
    developing proliferation-resistant fuel that can be recycled in
    existing light water reactors to extract energy and reduce the
    plutonium inventory in the spent fuel. In fiscal year 2003, AFCI plans
    to demonstrate the separation of a plutonium-neptunium and cesium-
    strontium on a laboratory scale. The successful demonstration of
    cesium-strontium, at a high purity, can provide a unique advantage to
    the repository program because it will allow the repository to be
    operated in a cold condition, by isolating all the short-term heat long
    in one drift, or above ground. The program is also in the process of
    fabricating several specimens of oxide fuels containing various
    combinations of uranium, plutonium, and neptunium for potential use in
    existing light water reactors as a means extending the energy resource
    of spent fuel and to reduce the inventories of plutonium. These
    advanced oxide fuels are planned for irradiation testing in the
    Advanced Test Reactor (ATR) in fiscal year 2004.
        AFCI Series Two technology development is a longer term activity
    (2020-2030 time frame). The main focus of AFCI Series Two is to develop
    advanced, non-aqueous technologies which are cost effective,
    environmentally sound, and capable of handling large volumes of fast
    reactor spent fuel. AFCI Series Two technology development also
    includes the development of advanced fuels for fast spectrum reactors--
    Generation IV reactors including the capability of these reactors for
    handling the transmutation mission. Application of AFCI Series Two
    transmutation technology can significantly reduce the long-term
    radiotoxicity and long-term heat load in the geologic repository.
        The research and development being conducted in the AFCI program is
    focused on producing results that will provide decision makers
    sufficient information on cost, schedule, and waste streams to inform
    decisions in fiscal year 2007 regarding the need for a second
    repository.
                             cuts to neri and nepo
        Question. Mr. Magwood, I appreciate the significant increase in
    budgets requested for Nuclear Energy. But I'm surprised that a program
    like the Nuclear Energy Research Initiative or NERI, that is the
    largest supporter of university-based research in this vital field, is
    targeted for a cut of 50 percent. I am also concerned that the Nuclear
    Energy Plant Optimization or NEPO program is targeted for no funding,
    when the Nation depends strongly on our existing nuclear plants to
    avoid having to replace them with more polluting alternatives. Can you
    please discuss the rationale for halving the NERI budget and killing
    the NEPO budget just when we are undertaking other important ventures
    to secure a future for nuclear energy in the Nation?
        Answer. First, I think it is important to make clear that we
    believe both the Nuclear Energy Research Initiative (NERI) and the
    Nuclear Energy Plant Optimization (NEPO) program are important and very
    successful programs. The programs have attracted significant
    international and private sector co-funding. Moreover, the important
    initiatives that we believe will form the base for our nuclear energy
    research program in the future--the Nuclear Hydrogen Initiative, the
    Generation IV nuclear energy systems initiative, the Advanced Fuel
    Cycle Initiative--all grew out of the success of innovative NERI
    research and development.
        While the funds requested for NERI in fiscal year 2004 represent a
    reduction from previous years, the budget request will allow us to
    support those projects that are continuing in the NERI and
    International NERI programs. During the coming year, we will refine and
    detail our plans for the Nuclear Hydrogen Initiative, Generation IV,
    and the Advanced Fuel Cycle Initiative. Once this is done, the
    Department will be in a position to evaluate NERI in fiscal year 2005
    in the context of our entire research portfolio.
        Regarding the NEPO program, we have successfully leveraged a small
    Federal investment with industry to address technical issues associated
    with the long-term operation of the Nation's existing 103 operating
    nuclear power plants. The program has funded a total of 33 projects
    during its first 3 years, addressing issues such as plant aging and
    electrical generation optimization. Thus, it is our hope that industry,
    who invests between $80 and $90 million dollars annually on research,
    will choose to continue some of these projects.
                 university reactor fuel assistance and support
        Question. For the current year, the Congress provided $18.5 million
    for the University Reactor support program. Can you give me an update
    on this effort?
        Answer. All current university programs efforts will be continued,
    including providing fuel to university research and training reactors,
    assisting university reactors to share their reactors with other
    universities and secondary schools for educational and training
    purposes, improving equipment and instrumentation at university
    reactors, and providing research grants to university nuclear
    engineering departments.
        The Department continues to award numerous fellowships and
    scholarships to students pursuing a nuclear engineering or a health
    physics degree and assisting students at minority universities to
    achieve a degree in nuclear engineering by partnering with a majority
    nuclear engineering institution; helping to reinvigorate the
    radiochemistry educational program through assistance to graduates,
    post-doctorates, and faculty; and conducting outreach to college
    freshman and secondary school students and teachers through the
    American Nuclear Society by providing teacher workshops in the basics
    of nuclear energy and engineering.
        Lastly, the Innovations in Nuclear Infrastructure and Education
    (INIE) initiative continues to maintain the Nation's university
    research reactor infrastructure by awarding the fifth INIE grant. The
    INIE program focus is to help strengthen the nuclear engineering
    infrastructure which is vital to producing the nuclear engineers the
    Nation requires for operation of its nuclear facilities, national
    laboratories, and universities.
        Question. Will this budget request allow the Department to expand
    its support to the regional reactor consortiums?
        Answer. The fiscal year 2004 budget request will enable the
    Department to continue support for five regional reactor consortiums.
    Four awards were made in fiscal year 2002, with the additional funds
    appropriated in fiscal year 2003; one additional award will be made.
    Two additional consortia have been selected for future award.
                                  uranium-233
        Question. The Congress has urged the Department to proceed with a
    Request for Proposal on a project to extract medically valuable
    isotopes from the excess uranium-233 stored at Oak Ridge National
    Laboratory. This is potentially a very exciting effort. Can you provide
    an update on this effort and tell when you expect the RFP will be out?
        Answer. The Department's project to treat its inventory of U233
    will greatly reduce the high cost associated with the storage of this
    material and demonstrate the Nation's leadership in the effective and
    responsible management of fissile materials. Perhaps more importantly,
    this project will provide researchers all over the country with ready
    access to isotopes that have shown considerable promise in treatment of
    various forms of cancer.
        The RFP was issued on June 13, 2002, and proposals were received on
    September 26, 2002. On February 14, 2003, the Department notified the
    bidders that were found to be in the competitive range required for the
    contract that their proposals would be evaluated for final selection.
    The evaluation process continues and we anticipate an award this
    summer.
                                      les
        Question. Mr. Magwood, the Department has previously commented on
    the need for new domestic enrichment capacity as a means of maintaining
    a reliable and economical U.S. enrichment industry. One of the ventures
    to accomplish this is led by the European consortium Urenco, a company
    with proven centrifuge technology. I know you are quite familiar with
    the company and their technology. Do you have any concern on your part
    that the efforts of Urenco to build a new facility in the United States
    would in any way pose a national security concern?
        Answer. The Administration places a high priority on ensuring
    nuclear nonproliferation safeguards are in place and that access to
    sensitive technology is controlled. The information available to the
    Department indicates that URENCO has acted responsibly with regard to
    the control of sensitive technology and the employment of non-
    proliferation safeguards.
        The Department of Energy believes that LES's plans for the
    deployment of centrifuge technology in the United States are of
    considerable national benefit. Deployment of an LES plant will help
    assure the important energy security objective of maintaining a
    reliable and economical U.S. uranium enrichment industry.
        Question. Do you believe that the development of new enrichment
    capacity is sufficiently important to U.S. energy security objectives
    that the development of a domestic facility by Urenco should therefore
    be encouraged and facilitated in some manner by DOE? If so, how?
        Answer. The Department believes there is sufficient domestic demand
    to support multiple commercial uranium enrichment plant operators in
    the United States and that competition is important to maintain a
    viable, competitive domestic uranium enrichment industry for the
    foreseeable future. The U.S. Government has encouraged the three Allied
    government partners in Urenco (Great Britain, the Netherlands and
    Germany) to continue its plans to deploy a new commercial uranium
    enrichment plant in the United States.
                        cost of depleted tails disposal
        Question. Pursuant to section 3113 of the 1996 USEC Privatization
    Act, DOE is obligated to accept depleted tails for disposal from
    domestic commercial enrichers, if the tails are declared low-level
    waste, and subject to the generator paying the cost of disposal. DOE
    has already agreed to accept post-privatization tails from USEC for
    disposal. Is this same option available for the depleted tails of any
    other commercial enrichment facility operating in the United States?
        Answer. The NRC has not characterized depleted uranium tails as
    low-level radioactive waste; therefore, Section 3113 of the
    Privatization Act does not obligate the Department to accept
    commercially generated depleted uranium tails for disposal. The
    Department agrees with the NRC, and would not support an initiative to
    declare depleted uranium tails as low-level radioactive waste.
    Nevertheless, in view of the Department's plan to build DUF6
    disposition facilities and the critical importance the Department
    places on maintaining a viable domestic uranium enrichment industry,
    the Department acknowledges that Section 3113 may constitute a
    ``plausible strategy'' for the disposal of DUF6 from the private sector
    domestic uranium enrichment plant license applicants and operators.
        The Department has two agreements to accept depleted uranium
    generated by USEC. In the first case, the government received $50
    million to accept 16,674 metric tons of depleted uranium generated by
    USEC during the privatization process. The second case is the June 2002
    agreement between USEC and DOE. While DOE agreed to accept title (but
    not custody until the Department is ready to disposition) to 23,300
    metric tons of depleted uranium hexafluoride as part of the agreement's
    consideration, USEC agreed to a range of important actions, including
    commitments to operate Paducah gaseous diffusion plant until replaced
    and to deploy advanced enrichment technology employing DOE technology.
        Question. Would one or both of the two conversion facilities under
    construction be available on the same terms and conditions to any other
    commercial enricher?
        Answer. No authority, procedures, or cost for such a service has
    been established. Were a commercial enricher to request such a service,
    the Department would give the request its full consideration.
        Question. What do you project to be the per kilogram cost of
    accepting for processing and ultimate disposal depleted tails from
    commercial generators?
        Answer. I note that Section 3113(3) of the USEC Privatization Act
    provides for reimbursement in an ``amount equal to the Secretary's
    cost, including a pro rata share of any capital costs.'' As full costs
    of providing such a service have not been established, and the
    procedures to implement a service of processing DUF6 for ultimate
    disposition have not been created, it is not possible to project a
    meaningful cost estimate at this time. However, should a commercial
    company request such a service, the Department would fully consider its
    request.
        Question. What is the per kilogram cost for the processing and
    disposal of the commercial tails that DOE has agreed to accept to date?
        Answer. The actual marginal cost of processing and disposal of the
    depleted uranium hexafluoride generated by USEC has not been
    determined. Once the Department's conversion facilities have been built
    and are operational, a reasonable estimation of the marginal cost to
    process commercial tails can be calculated. These tails will be
    converted and dispositioned as part of the Department's inventories. It
    is expected to take 25 years to completely disposition the Department's
    depleted uranium stockpile. It should be noted that USEC will maintain
    custody of the tails the Department has agreed to accept under last
    year's Memorandum of Agreement until such time that they are accepted
    for processing.
                                    hydrogen
        Question. Mr. Garman, the grand promise in the President's vision
    of a hydrogen economy is dependent upon us finding a way to produce
    hydrogen economically and cleanly. Today, the primary method for
    hydrogen production is methane reformation, which results in
    significant releases of greenhouse gases. Options for future production
    will be built around either high temperature chemical processes, or
    high-temperature electrolysis. I know you are also looking to reduce
    the cost of producing hydrogen from renewable energy technologies. But,
    as I look at the issue, I am once again forced to the conclusion that
    nuclear power remains the most likely technology that will allow us to
    produce hydrogen in large quantities, economically and cleanly. What
    renewable technologies are most promising for the production of
    hydrogen?
        Answer. As part of the Hydrogen Fuel Initiative, research underway
    in renewable hydrogen production technologies includes gasification and
    pyrolysis of biomass from forest, crop, and urban residues. Wind-
    powered electrolysis is another high potential pathway being
    researched, recognizing that 40 million tons of hydrogen per year
    (about half the U.S. light duty fleet energy requirement) could be
    produced using the wind resources of North Dakota alone, based on
    calculations by scientists at the lab. Water splitting through
    photolysis is being researched as well as solar-concentrated high
    temperature water splitting chemical cycles. Many of the aspects of
    solar-concentrated high temperature water splitting chemical cycles
    would be similar to methods using high temperature nuclear.
        Finally, while hydrogen production from methane reformation
    (without sequestration) would result in carbon releases to the
    atmosphere, fuel cell vehicles using compressed hydrogen produced from
    natural gas would still use 50 percent less energy and emit 60 percent
    less carbon dioxide on a ``well-to-wheels'' basis compared to a
    gasoline-powered vehicle.
        Question. How do they compare and contrast to the nuclear option?
        Answer. Producing hydrogen from renewable energy sources or using
    the nuclear option can both potentially eliminate associated greenhouse
    gases. Nuclear-enabled high temperature chemical cycle water splitting
    is a promising route to hydrogen production with near-zero greenhouse
    gas emissions. This approach relies on the success of the next
    generation nuclear energy technology, i.e., Generation IV (GenIV). The
    GenIV nuclear reactor, would be the heat source for the high
    temperature cycle needed to produce hydrogen. This technology will
    require large central facilities and a hydrogen distribution network.
        National energy security is assured through energy diversity. The
    renewable energy options being researched can support energy security
    through a diversity of feedstocks and processes. Renewable technologies
    such as biomass gasification or pyrolysis, ethanol reforming, wind
    powered electrolysis, and photo-electrochemial water splitting
    potentially offer the ability to provide distributed production at the
    point of use without an extensive hydrogen delivery infrastructure. In
    addition, renewable technologies such as high temperature chemical
    cycles using solar collectors as the energy source can help leverage
    the research being performed to develop the Generation IV nuclear
    technology.
                                  biomass r&d
        Question. Mr. Garman, I note the 21 percent reduction the
    Department has proposed for biomass R&D. Among the renewable
    technologies under your purview, only biomass and hydrogen offer great
    promise in helping the country to wean itself off our dependence of
    foreign oil. As gasoline prices are projected to peak well in excess of
    $2 per gallon this spring, I find it odd that biomass took such a large
    hit. Can you explain your rationale?
        Answer. The Department recognizes the tremendous potential of a
    well-focused biomass R&D program to develop biorefinery technologies
    that can produce fuels, power, and high-value chemicals and other
    products. Nevertheless, Congressionally-directed activities reduced the
    coherence of this program and significantly constrained the ability of
    our scientists and engineers to move these important technologies
    forward. Thus, when we made the tough choices about funding the most
    important research for our Nation's energy security, environmental, and
    economic goals, we decided to shift funds from the biomass program
    where the effectiveness of our R&D work was already reduced into other
    areas, particularly our longer-term hydrogen and fuel cell R&D.
        EERE's budget reflects numerous factors: Administration priorities,
    efficiencies realized by combining all biomass research under one
    program, alignment with the Administration's R&D investment criteria,
    program performance, expected public benefits, and bringing to
    completion research on some technology applications that are ready to
    be commercialized. It is also important to recognize that in fiscal
    year 2004, DOE will continue collaborating with USDA in order to
    leverage both agencies' resources as we are doing in fiscal year 2003.
    In fiscal year 2003, under a joint solicitation required by the Biomass
    R&D Act of 2000, USDA will award $14 million and DOE $5 million for
    cost-shared R&D work identified in the Act.
        Question. I also understand government-wide investment in biomass
    technologies is increasing in other departments, particularly USDA. But
    I do not believe Energy should cede its leadership role in technology
    development to another agency. Will you elaborate on the government-
    wide effort and Energy's role in that?
        Answer. In fiscal year 2003, under a joint solicitation required by
    the Biomass R&D Act of 2000, USDA will award $14 million and DOE $5
    million for cost-shared R&D work identified in the Act. USDA's focus is
    on environmental performance, economic viability, and feedstock
    production. DOE's focus is on faster and cheaper conversion of biomass
    to fuels and other bio-based products, and on syngas clean-up and
    conditioning. DOE plays a lead role in seeking to reduce the production
    costs of sugars and syngas (sugars platform and syngas platform),
    intermediates needed in the production of several chemicals and fuels.
    In addition, DOE funds R&D on conversion processes for producing fuels,
    materials and chemicals that will leverage the two platforms.
                   high temperature superconductivity center
        Question. Mr. Garman, I note that funding requests for Electric
    Reliability and High Temperature Superconductivity remain flat between
    fiscal year 2003 and fiscal year 2004. That surprises me a little,
    given the importance to the Nation of maintaining and improving
    reliability of our electricity supplies, and the potential immense
    impact that high temperature superconductivity can make to increase
    efficiency of many electrical processes. Are you confident that we are
    doing as much as we can do to improve our electric reliability and to
    utilize high temperature conductors as quickly as possible?
        Answer. Yes, I am confident that we are doing as much as we should
    do. I agree that maintaining and improving the reliability of our
    electric supplies is a priority. The Electricity Reliability budget was
    increased by $360,000 in the fiscal year 2004 request, to $76.9
    million. Within this budget, High Temperature Superconductivity R&D is
    $47.8 million, the same as our fiscal year 2003 request and $15.5
    million (+48 percent) above the fiscal year 2002 level. We have also
    increased our fiscal year 2004 request for Transmission Reliability R&D
    by $3.0 million. The Department reduced its request for the Energy
    Storage program by $2.6 million, as mature technologies such as battery
    storage system are handed off to industry for commercialization, and as
    synergies with the transportation battery program are realized. In
    addition, the Department supports development of distributed energy
    technologies located closer to the point of end use, thereby increasing
    the chance that the electricity grid will stay in balance.
        Question. Please provide an update of this effort and describe the
    types of commercial possibilities exist?
        Answer. The Department recognizes the broad potential benefits of
    superconductivity in our future electrical system. The fiscal year 2004
    request will support development of pre-commercial prototypes for 100-
    megawatt generators, longer distance power cables, fault current
    limiters, and larger-scale flywheel electricity systems. Also, the
    ``next generation'' of superconducting wire is expected to accomplish
    performance milestones needed for fiscal year 2005 use in equipment--a
    breakthrough for improving performance and reducing cost. Successful
    equipment research and development completion and availability of
    ``second generation'' wire will lead to commercial opportunities for
    advanced, cost-effective, power equipment that generally is half the
    size of conventional alternatives and has only half the energy losses.
    In addition, commercial possibilities also exist in defense
    applications of these technologies.
        We note that the Department's budget for electricity reliability
    and high temperature superconductivity has grown by more that 50
    percent since fiscal year 2001. We believe we can reach the end of the
    current research agenda by 2010, if we are able to focus our funding on
    achieving the goals and avoid directed projects that do not contribute
    to the goals.
        Question. In order to achieve commercial successes, what level of
    investment should be made in R&D over what period of time?
        Answer. The current level of funding is appropriate to bring about
    continual research advances, while still following a well-conceived
    research roadmap. Program successes include establishing world
    leadership in processing of ``first generation'' High Temperature
    Superconductivity wire as well as in development of advanced power
    equipment prototypes using this wire. Another success is the discovery
    at DOE laboratories of methods to make ``second generation''
    superconducting wire, able to achieve program cost and performance
    goals, which are based on advancing the technology to the point where
    commercial success is possible. We believe we can reach the end of the
    current research agenda by 2010, if we are able to focus our funding on
    achieving the goals and avoid directed projects that do not contribute
    to the goals.
                             demonstration projects
        Question. Mr. Garman, the Department did not propose to continue
    funding for a number of demonstration projects that have been initiated
    over the last several years. I understand you are attempting to get
    more from your R&D dollars, and you are not interested in duplicative
    demonstrations or funding projects that should properly be financed by
    the private sector. At the same time, this committee is well aware of
    unique cases where it is preferable to use appropriated dollars to
    demonstrate technologies before they become commercially attractive.
    Given these considerations, what criteria would you suggest to this
    subcommittee in evaluating the many requests for demonstration projects
    from Senators?
        Answer. As you point out, there are unique cases in which it is
    appropriate to demonstrate technologies before they become commercially
    attractive. We strive to use the Administration's R&D investment
    criteria to guide all of our activities, including demonstrations. One
    criterion useful for evaluating demonstration proposals is the
    existence of significant market barriers to commercialization. These
    market barriers are conditions that do not satisfy the needs of a fully
    competitive market. Such a determination can only be made on a case-by-
    case basis, depending upon the market the technology faces. If the
    analysis indicates that we can reduce the market barriers, or validate
    the technology, we may propose a demonstration. Conversely, if we
    cannot show that there are market barriers forcing underinvestment by
    industry, we will not pursue the demonstration.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                diagnostic and instrumentation laboratory (dial)
        Question. Mr. Chairman, I'd like to thank the Undersecretary and
    Directors for testifying before this committee today. The work you do
    is very important to my State and to me. I'd like to commend David
    Garman, the Director of the Office of Energy Efficiency and Renewable
    Energy, for the work he does with biomass research.
        This scientific research is so important to a rural, agricultural
    State like Mississippi. Biomass energy is estimated to contribute over
    7 percent of Mississippi's total energy consumption--that amount is
    double the national average. The majority of our lumber facilities burn
    wood waste to generate steam for industrial processes. Biomass offers
    special opportunities for benefiting Mississippi's economy by keeping
    energy dollars in our State and by providing jobs in rural areas where
    biomass is produced. By using their wastes for energy, disposal costs
    are avoided, and industries are better able to compete.
        The principal biomass waste streams that occur in Mississippi are
    generated by agriculture (e.g., cotton gin waste), wood products
    manufacturing (e.g., sawdust and wood scraps), animal wastes from
    confined feeding operations, and municipal solid waste collections
    (e.g., paper and cardboard, demolition waste, lawn and tree trimmings).
        Last year, I visited a biomass plant in Winona, Mississippi and
    inquired about plans for using Federal funds that were appropriated in
    the fiscal year 2003 omnibus bill. I learned that the Winona biomass
    project can enter its final stages of discovering the organism which
    will cause the heated biomass to turn into gas. Once that organism or
    ``bug'' is discovered, the plant can operate from start to finish where
    chips of wood can be input, burned and then gasified into ethanol. In a
    town like Winona, that sort of success has great economic development
    potential.
        I am pleased to learn that the Department is concentrating its
    biomass research efforts on the catalysts needed for biomass gasifiers.
    Many communities, beyond the scientific community, will benefit from
    this work.
        I would also like to commend the Mississippi Diagnostic
    Instrumentation and Analysis Laboratory at Mississippi State
    University. I am pleased to see that you're funding good science, like
    the joint Los Alamos-Mississippi State project that we hope will be
    useful for both DOE and Homeland Security. A continuing concern is how
    do we take this magnificent science and turn it into the new
    technologies DOE needs to accelerate cleanup. I am hopeful that you
    consider using organizations such as DIAL at Mississippi State to turn
    your science into technologies that will be used at the DOE sites. Mr.
    Chairman, with your permission I have a question I'd like to submit for
    the record.
        I am pleased to see that you're funding good science, like the
    joint Los Alamos-Mississippi State project that we hope will be useful
    for both DOE and Homeland Security. A continuing concern however is how
    do we take this magnificent science and turn it into the new
    technologies DOE needs to accelerate cleanup? Have you considered using
    organizations such as DIAL at Mississippi State to help bridge the
    ``valley of death'' to turn your science into technologies that will be
    used at the DOE sites?
        Answer. The ``valley of death'' issue is a major concern of ours
    and we have been developing strategies to efficiently transfer
    scientific results to cleanup applications. First, we will work
    directly with site cleanup personnel to identify problem areas where
    science can make a significant impact and to further collaborate with
    the site on these specific issues. This will ensure that our scientific
    results are directly transferred to the sites for further development.
    We regularly conduct technical exchange workshops and find these
    invaluable, and will expand these at major cleanup sites. In addition,
    we have found that frequently, scientists want to take their work to
    the next stage themselves or at least provide technical support
    throughout the development. We encourage appropriate Environmental
    Management Science program researchers to develop partnerships with
    applied organizations, such as DIAL.
        Question. What future plans do you have to work with DIAL?
        Answer. The Environmental Management Science program will continue
    to select projects through competitive peer review that focus on the
    Department's cleanup problems. A key research area continues to be
    techniques to characterize and monitor contaminated sites. In
    partnership with the national laboratories and universities, DIAL is
    likely to be competitive in this area.
                                     ______

                   Questions Submitted by Senator Harry Reid
                                    science
        Question. In the fiscal year 2003 Conference Report, we instructed
    you to reprogram funds, if necessary, to respond to the challenge of
    the Japanese Earth Simulator Computer. I believe the Earth Simulator is
    a warning shot across the bow for American computing companies and
    research. Does your advanced computing strategy adequately address the
    need for a robust investment in American supercomputing to maintain
    American competitiveness?
        Answer. The fiscal year 2004 budget request for Advanced Scientific
    Computing Research includes $14 million for research in next generation
    computer architectures (NGA) for scientific simulation. The NGA allows
    us to embark on an R&D investment strategy to provide future high
    performance computing resources that are optimized for scientific
    simulations in areas of strategic importance to the Department.
        Question. Given the remarkable successes of the Human Genome
    Project, can you help the Committee understand the new science drivers
    behind the Genomes to Life program?
        Answer. The Human Genome Project, and DOE's associated Microbial
    Genome Program, determined a representative human DNA sequence and the
    DNA sequences of a rapidly growing number of microbes (nearly 100),
    most with direct relevance to DOE mission needs in energy and the
    environment. While the availability of genomic DNA sequence information
    has revolutionized the way scientists think about and do biology it is
    only a first of what will certainly be many very large steps. An
    organism's DNA sequence is the blueprint, the complete set of genetic
    instructions, which biology uses to create a living, working organism.
    It gives scientists a complete list of all the parts (proteins for
    example) along with the genetic on/off switches and rheostats that the
    organism uses to make sure that all of its genes are active only at the
    right time and place. However, the DNA sequence doesn't tell us what
    all those parts do, how they actually work, how they interact with each
    other, how they are regulated, and how different organisms, microbes in
    the case of the Genomes to Life program, interact with each other.
    These uncertainties are the scientific drivers for the Genomes to Life
    program. In the end, we want to understand microbes of interest to DOE
    so well that we have computational models that accurately predict their
    behavior in response, for example, to environmental contaminants,
    elevated atmospheric carbon dioxide. With this understanding we can use
    those microbes to develop biology-based solutions to DOE needs--
    abundant sources of clean energy, new solutions for cleaning up DOE
    waste sites, removal of excess carbon dioxide from the atmosphere.
        Question. We have a large capital investment in the Office of
    Science user facilities that serve many users at universities and
    laboratories. Are we operating these facilities at maximum capacity in
    the fiscal year 2004 budget to meet the needs of these scientists?
        Answer. The science user facilities are operating in the fiscal
    year 2004 request between 83 and 100 percent of maximum capacity. It is
    always difficult to find the right balance among completing priorities
    for facility operations, research, construction, etc. We are satisfied
    that we have allocated the funding in the request to achieve the best
    balance possible.
        Question. As I mentioned in my opening statement, I am pleased that
    the United States has resumed its participation in the ITER project.
    However, the dollar levels look very low for our first year
    participation. Are the funds in the budget adequate to fulfill our
    international requirements?
        Answer. The proposed fiscal year 2004 participation is of a
    preparatory nature, 2 years in advance of the start of construction,
    planned for fiscal year 2006. In this sense, the $12 million request is
    sufficient to begin our involvement.
        Question. As a follow-up, the U.S. participation seems fairly
    modest compared to that of several of the international partners. Are
    you satisfied that it appears that the United States will be just a
    junior partner in ITER? Is a larger role something we should aspire to?
        Answer. As just noted, the proposed fiscal year 2004 level of
    funding does not necessarily presage the level of U.S. participation
    during construction. With regard to that participation, the
    Administration wishes to make a significant contribution to this
    project. The ultimate answer to your question of participation levels
    will depend on the final number of interested parties, and I will note
    that South Korea has recently expressed interest in joining the
    negotiations.
        Question. Are you having any problems attracting top flight
    scientists to your labs given the deteriorating condition of many of
    these facilities? If so, what can Congress do to address the situation?
        Answer. Recruitment of new staff is particularly critical at this
    time as the generation that helped build the labs retires and the labs
    compete in the job market to replace them. While it is always difficult
    in hot new areas like genomics and nanoscience, decaying facilities and
    sites, lack of adequate housing for post-doc and graduate students, and
    salary gaps are making recruitment even more difficult. I should add
    that retaining the current staff is not easy either.
        We have anecdotal comments from Lawrence Berkeley, Brookhaven and
    Oak Ridge National Laboratories that scientists are, in fact, declining
    job offers based on the condition of working space offered them. Their
    concerns range from quality of facilities and equipment and appearance
    to location and amenities.
        Berkeley, Brookhaven and Oak Ridge are our oldest laboratories.
    Overall, 24 percent of the building space at our laboratories is more
    than 50 years old. We have identified over $1.5 billion, $1.2 billion
    of this total is for buildings, of line item projects to renovate,
    modernize and replace our existing buildings to better support our
    research missions. A complete listing and description of the projects
    can be found at the SC web site: http://www.science.doe.gov/SC-80/sc-82
    under ``Infrastructure Needs Assessment.'' We appreciate the support
    from Congress of the President's funding requests to modernize the
    Science laboratories.
        Question. A few years ago you office supported an education
    program. I see that your fiscal year 2004 budget proposes a new
    workforce development program. Does this program address the workforce
    development needs of the scientific community?
        Answer. Our approach to science workforce development is to have a
    comprehensive plan to expand the pipeline of students interested in,
    attracted to, and retained into science and technology careers. To do
    so, we have a major effort in offering mentor-intensive internships to
    undergraduate students at our national laboratories drawn not only from
    the typical 4-year research institutions but also from non-research
    institutions and community colleges. We also have a Faculty and Student
    Teams program that is aimed at developing long-term relationships
    between the faculty of small non-research institutions and the
    scientists at our national laboratories.
        Of particular interest to us, is the proposed Laboratory Science
    Teacher Professional Development program. If our Nation is to have a
    sufficient number of physical scientists and engineers, we need to
    address the serious declines in these majors among U.S. citizens. A
    number of commissions and studies have shown that the best route to
    stimulating student interest is through qualified and exciting teachers
    especially in the middle school years. Our teacher professional
    development program is aimed at attacking this problem through mentor-
    intensive research and focused science-discovery experiences for K-14
    teachers. It will forge long-term relationships between the national
    laboratory scientists and our Nation's science teachers. Through this
    approach we believe we can produce a group of teachers who will be
    agents of change and inspiration to their students and local
    educational communities. We believe this comprehensive plan will
    utilize the unique human and scientific resources of the national
    laboratories to help support the future science workforce development
    of the Nation.
        Question. What is so different about your office's approach to High
    End Computing? What are you doing to develop this important area and
    what are the benefits?
        Answer. There are three major differences to our office's approach
    to High End Computing. First, we will conduct this effort within the
    context of an inter-agency strategy in High End Computing, to leverage
    resources and to provide the strong, broad commitment needed to sustain
    this long-term strategy. Second, we will engage our scientists with
    computer design researchers and with U.S. computer vendors through
    research collaborations, to evaluate computer system bottlenecks and to
    identify cost-effective solutions. Third, we will support research in
    the software programming environment to ensure that future
    supercomputer platforms are easy to use as soon as they become
    available.
        Question. What actions have you taken in the last year to assure
    the integrity of the Lab Directed Research and Development process?
        Answer. The Office of Science implemented the following policy
    changes to ensure that the LDRD program at its laboratories is executed
    in full compliance with all Congressional and DOE regulations.
      --My office issued detailed guidance on the roles and
            responsibilities for Headquarters, DOE Site Offices/Operations
            Offices and the Laboratories regarding adequate reporting and
            effective oversight of the LDRD program.
      --For the first time in the Office of Science, I can personally
            assure you that a single Federal official--the site office
            manager--will carry out a prospective review of the
            laboratories' proposed LDRD projects, ensure their relevance to
            DOE missions and concur in each project.
      --Also, my office developed supplemental implementation guidance for
            reporting LDRD charges on other Federal agency funded work for
            others (WFO) projects and it is being implemented by each Site
            Office.
      --The Office of Science provided the necessary data to the CFO's
            office for the annual LDRD financial report to Congress. This
            report provides information and analyses to comply with
            congressional requirements, and supports the conclusion that
            the LDRD funds clearly benefit the national security missions
            of the Department by providing innovative new research to
            underpin future mission capabilities.
      --In addition, each year the Science laboratories analyze and report
            the benefits provided to defense and non-defense customer
            categories as a percentage of total LDRD project dollars. They
            demonstrate that LDRD benefits are commensurate with the
            percentage of funds received.
        I have made a personal commitment to ensure that we are fully
    responsive to Congressional guidance on LDRD and will strive to make
    our improved processes work efficiently and effectively.
                     energy efficiency and renewable energy
        Question. I see that you have zeroed out funding for the
    Concentrating Solar Power portion of the solar energy budget. I have
    been told by many energy scientists, including researchers at the
    National Renewable Energy Lab (NREL), that CSP holds significant
    promise for long-term energy potential. Why have you given up on
    Concentrating Solar Power and what is it going to take to get you to
    focus on it again?
        Answer. EERE's budget reflects numerous factors: Administration
    priorities, alignment with the Administration's R&D investment
    criteria, program performance, expected public benefits, and bringing
    to completion research on some technology applications that are ready
    to be commercialized. Concentrating Solar Power was identified as a low
    priority area because of a study by the National Academy of Sciences in
    2000 that recommended: ``[The Department] should limit or halt its
    research and development on power-tower and power-trough technologies
    because further refinements would not lead to deployment.'' The study
    also suggested that the Department reassess market prospects for solar
    dish/engine technologies. Based on these recommendations, the fiscal
    year 2003 budget began phasing out the CSP program, and the fiscal year
    2004 budget terminates it.
        In 2002, the Department sponsored two independent technical reviews
    of Concentrating Solar Power: the first by Sargent & Lundy (S&L), an
    engineering firm that conducts due-diligence studies in the power
    sector; the second a review by the National Research Council (NRC) of
    the S&L study. In November 2002, the NRC submitted its review of the
    initial S&L study. The NRC found that many of the conclusions from the
    S&L study were reasonable, but also identified several limitations and
    deficiencies in the S&L analysis, which S&L has agreed to address. We
    are awaiting the final report from Sargent & Lundy, and based on our
    review of that and the NRC review DOE will reevaluate the possibility
    of future Federal support for CSP.
        Question. In the last two conference reports we have carried
    language directing the National Renewable Energy Laboratory (NREL) to
    deploy some of their technologies in Nevada in partnership with
    industrial and university partners. It is my understanding that this
    effort is working out well for everyone involved, but I would be
    interested in your thoughts.
        Answer. Within the scope of this Congressionally-directed activity,
    DOE and NREL staff identified a variety of RDD&D opportunities in
    fiscal year 2002 that the indicated Nevada constituencies might conduct
    to complement existing renewable program efforts and provide benefits
    to Nevada and the U.S. Southwest. In response to a targeted
    solicitation, nine proposals were selected for award from among 36
    proposals. Work on eight of the nine projects commenced in October
    2002. The ninth project with Pulte Homes for a Zero Energy Home
    demonstration project/information center has been delayed due to the
    departure of Pulte's project lead. Alternate builders are being sought
    to support Pulte's end of the project and complete the award
    negotiations. With the fiscal year 2003 appropriations only recently
    concluded, no new awards have been made. In general, the implementation
    process is proceeding smoothly but it is too early to characterize the
    possible program technology and regional energy benefits that may
    result from this funding.
        Question. Biomass seems to have taken a substantial cut in the
    fiscal year 2004 request. By all accounts this program has been very
    successful. Why are you cutting back at this time?
        Answer. The Department recognizes the tremendous potential of a
    well-focused biomass R&D program to develop biorefinery technologies
    that can produce fuels, power, and high-value chemicals and other
    products. Nevertheless, Congressionally-directed activities reduced the
    coherence of this program and significantly constrained the ability of
    our scientists and engineers to move these important technologies
    forward. Thus, when we made the tough choices about funding the most
    important research for our Nation's energy security, environmental, and
    economic goals, we decided to shift funds from the biomass program
    where the effectiveness of our R&D work was already reduced into other
    areas, particularly our longer-term hydrogen and fuel cell R&D.
        EERE's budget reflects numerous factors: Administration priorities,
    efficiencies realized by combining all biomass research under one
    program, alignment with the Administration's R&D investment criteria,
    program performance, expected public benefits, and bringing to
    completion research on some technology applications that are ready to
    be commercialized. It is also important to recognize that in fiscal
    year 2004, DOE will continue collaborating with USDA in order to
    leverage both agencies' resources as we are doing in fiscal year 2003.
    In fiscal year 2003, under a joint solicitation required by the Biomass
    R&D Act of 2000, USDA will award $14 million and DOE $5 million for
    cost-shared R&D work identified in the Act.
        Question. When you took over as Assistant Secretary 2 years ago,
    you expended a substantial amount of time and effort in reorganizing
    the Energy Efficiency and Renewable Energy office. One of the unique
    features of the final organization chart was the creation of a Board of
    Directors for EERE. You assured us at the time that the Board of
    Directors was going to be a panel of your brightest minds and was going
    to be afforded the opportunity to think big thoughts and advise you
    directly. More to the point, you assured us that it was not a burial
    ground for unwanted Deputy Assistant Secretaries. However, in the year
    since the reorganization went into place, two of your five Directors
    have left and the other three seem to be engaged in activities not
    always directly related to your office's mission. Do you still stand by
    the concept of a Board of Directors?
        Answer. One of the innovations of the new EERE business model has
    been the creation of the Board of Directors. It has also been one of
    the early successes. Board members have represented EERE and the
    Department in international climate change deliberations, formed
    corporate strategies related to the FreedomCAR partnership and Hydrogen
    Fuel Initiative, and advised on how to reshape the budget to comport
    with new, emerging priorities. Proof positive of the importance of this
    unique governmental entity is that we are conducting a national search
    to replace the recently departing Board members and hope to have an
    announcement as to their replacement in the coming weeks.
                                     ______

                  Questions Submitted by Senator Patty Murray
                                    science
        Question. Dr. Orbach, the Pacific Northwest National Lab (PNNL) and
    major Universities and research institutes in my State are valuable
    resources for the Genomes to Life program and I urge you to expand the
    use of those world class facilities. However, I also realize the Office
    of Science's Biological and Environmental Research program sustained
    real cuts into the base budget in the fiscal year 2003 Omnibus budget.
    For this budget year, I would like to work with the Chairman to include
    significant increases for the Genomes to Life program in the BER
    budget. Dr. Orbach, what would the Office of Science be able to do with
    additional funds for the Genomes to Life program?
        Answer. Senator Murray, I believe that the fiscal year 2004
    President's request for the Genomes to Life program provides robust
    funding, while balancing the needs of this exciting new program with
    other equally compelling programs being carried out within the Office
    of Science. In these very early days of research in the Genomes to Life
    (GTL) program we have three types of research needs. First, we need to
    fund large, multi investigator, multi institutional, multidisciplinary
    research teams to do the kinds of science required by a program whose
    technology, computational, and experimental challenges are as complex
    and diverse as those of the GTL program. We have already funded 5 large
    scientific teams ($5-7 million per year) whose research spans the four
    core goals of the GTL program (approximately one team per goal): (1)
    understand all the multi protein molecular machines in DOE-relevant
    microbes, (2) identify the genetic regulatory machinery that controls
    these machines, (3) understand complex, DOE-relevant communities of
    microbes since microbes generally work in communities and not alone,
    and (4) develop the computational resources needed to make all of this
    happen. To ensure a diversity of research approaches that is so
    important for fundamental discovery in science, we need at least two or
    more teams of scientists addressing each of these large, challenging
    goals. The fiscal year 2004 President's request includes an additional
    $29.2 million for GTL. These additional funds could, for example,
    support an additional large team of scientists focused on each of the
    four core GTL goals. Second, we need to fund a wide variety of cutting
    edge research projects that will help us develop many of the specific
    technologies and research tools that will be needed by our large GTL
    research teams, by planned GTL user facilities (see below), and,
    indeed, by tomorrow's scientists across all areas of biology. These
    individual investigator type projects are analogous to the many
    projects funded in the Human Genome Project that led to the development
    of the resources and technologies eventually used to actually sequence
    the human genome. Third, the proposed GTL plan calls for cost-
    effective, high throughput user facilities for carrying out much of the
    routine biology and generating the necessary resources of GTL (and for
    other areas of biology outside of GTL) just as the Human Genome project
    needed DNA sequencing factories. Four high throughput facilities are
    planned for (1) protein production, (2) imaging of microbial proteins,
    molecular machines, and communities, (3) proteomics, and (4) whole
    systems analysis.
        Question. Dr. Orbach, does the fiscal year 2004 budget request have
    enough funds to have full utilization of EMSL including computer
    equipment?
        Answer. The fiscal year 2004 budget request for the Environmental
    Molecular Sciences Laboratory (EMSL) includes $35,149,000 for operating
    expenses and $1,989,000 for capital equipment. The EMSL is expected to
    have sufficient funding to allow full utilization of the EMSL,
    including the new high performance computer.

                              SUBCOMMITTEE RECESS

        Senator Domenici. And for all of you who came from the
    Department and others, thank you for being here.
        Thank you.
        [Whereupon, at 3:31 p.m., Wednesday, March 12, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                             MONDAY, APRIL 7, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:40 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Pete V. Domenici (chairman)
    presiding.
        Present: Senators Domenici, Cochran, Craig, and Reid.

                              DEPARTMENT OF ENERGY

                       Office of Environmental Management

    STATEMENT OF JESSIE HILL ROBERSON, ASSISTANT SECRETARY

                 OPENING STATEMENT OF SENATOR PETE V. DOMENICI

        Senator Domenici. Today the subcommittee is going to review
    the Department of Energy's fiscal year 2004 budget request for
    (1) the Office of Environmental Management and (2) the Office
    of Civilian Radioactive Waste Management.
        In that regard, we will receive testimony from Ms. Jessie
    H. Roberson, Assistant Secretary for Environmental Management,
    and from Dr. Margaret S.Y. Chu, Director of the Office of
    Civilian Radioactive Waste Management. Both of today's
    witnesses have testified before this subcommittee before. We
    welcome you back and we look forward to your testimony today.
        For the Office of Environmental Management the Department
    has requested $7.2 billion, an increase of 4 percent from the
    current year of $6.9 billion.
        Secretary Roberson, since you took this job 2 years ago you
    have done many impressive things. You have led and completed a
    top-to-bottom review, you have revised the clean-up estimates
    to take 35 years and $30 billion off the projected clean-up
    program, you have significantly narrowed the focus of the
    program, which was very much needed, you have shaken up the
    senior management of your office--I do not know that you want
    to say that. We will just say that for you--downsized the
    headquarters staff, and you have recompeted existing clean-up
    contracts, and perhaps most notably, secured increased budget
    requests from the Office of Management and Budget. That is
    truly borderline miraculous, considering that they always
    wanted us to do more with less.
        You have successfully increased the amount of money that is
    going into this function, and now for fiscal year 2004 you are
    promising to get rid of the Idaho National Engineering and
    Environmental Laboratory by transferring it to the Office of
    Nuclear Energy and completely restructuring the budget to focus
    on your newly defined priority.
        All of these we commend you for.
        You have been nothing if not very busy during these first 2
    years. You have proposed many changes in the programs. Many we
    have liked, some we are not so sure we like, but all have been
    vigorously pursued, and I believe your efforts will produce
    real successes in years to come.
        Still you have many challenges ahead, and I am sure you
    will tell us about them today. You must continue to improve
    project management. The Department must ensure that the letters
    of intent and performance management plans produced over the
    last years are funded and--equally important--followed. The
    Department must convince the State regulators, jaded by years
    of broken promises, that the Department is a reliable partner
    in this clean-up, and the Department must learn to work more
    efficiently, even in an era of heightened safeguards and
    security concerns.
        Your progress to date has been very good. I look forward to
    hearing about your plans for fiscal year 2004.
        Now, regarding the budget request for the Office of
    Civilian Radioactive Waste Management, this year it is $591
    million, an increase of $131 million, a 28 percent increase.
    After 20 years of scientific study, last year the President
    notified Congress that the Yucca Mountain site should begin the
    rigorous process of scientific and technical review leading to
    an NRC license for the facility. In July of last year, Congress
    accepted the President's recommendation, and the Yucca Mountain
    project now shifts its focus to licensing, building and
    operating the repository and related transportation
    infrastructure. This is a huge task, and no one knows that
    better than our Ranking Member, Senator Reid.
        The country has decided to proceed with the construction of
    a nuclear waste repository, and it will cost close to $10
    billion in the next several years to complete it. We are all
    going to have to work together to ensure a strong future for
    nuclear power in our country and the world. Economics and
    environmental protection will demand a major role for nuclear
    power, and an acceptable spent fuel management policy, but even
    if we are successful in developing alternative methods of
    treating spent nuclear fuel, the country must still have a
    permanent geological repository.
        Each of the program areas before us today will present
    unique challenges for this subcommittee. I will look forward to
    engaging each of our witnesses today and working with all the
    members of this subcommittee to put together the best possible
    appropriations bill.
        I will now yield to my Ranking Member, Senator Reid. Thank
    you, Senator Reid.

                        STATEMENT OF SENATOR HARRY REID

        Senator Reid. Thank you very much, Mr. Chairman.
        Our subcommittee has spent a lot of time working with you,
    Secretary Roberson, and your staff on the administration's
    clean-up initiative last year. Obviously, I am happy to see
    that your budget request fully supports the accelerated clean-
    up program that has resulted from your efforts last year, but
    the hard part now begins. We need to turn to the higher dollar
    totals you are getting now and for the next few years into
    verifiable progress in getting clean-ups done more quickly and
    at lower cost.
        There are members of this subcommittee and certainly the
    full committee from States that have much bigger clean-up
    programs than does Nevada, for sure, and if they have more
    questions, they will pursue those, the details of that, but
    your request this year includes a plea for some additional
    flexibility on the treatment of construction projects, and this
    is something I am confident Senator Domenici and I can
    consider.
        Let me now talk to you, Dr. Chu. As I understand it, and I
    am almost certain I am right, this is your first opportunity to
    testify before this subcommittee. I am most interested in
    several statements that you made about the Department of
    Energy's plans for submitting a license application in December
    of 2004.
        One of the most important conclusions of a report issued by
    the GAO a few years ago was that DOE never rebaselined the
    Yucca Mountain project. Your written testimony suggests the
    only thing standing between you and a license application in
    the fourth quarter of fiscal year 2004 is getting the full
    fiscal year 2004 budget request. This strikes me as somewhat
    unlikely, and I suspect it would strike the GAO as absurd,
    given the technical and financial difficulties that your office
    has faced for years, not you personally, but your office.
        Even if you do file an application on time next year, your
    supporters are probably going to want to know how it is that
    you were able to get everything you needed to be done so
    correctly and promptly when Congress has not given you anything
    close to your budget request for more than a decade. All of us
    will want to know what you have done poorly or not at all in a
    rush to meet these milestones.
        As you know, one of the biggest concerns about this project
    is this issue of transporting waste across the country. Last
    year the Secretary of Energy seemed to say that there is plenty
    of time to resolve transportation issues. This is exactly what
    he said. Because the site has not yet been designated, the
    Department is just beginning to formulate its preliminary
    thoughts about the transportation plan. There is an 8-year
    period before any transportation to Yucca Mountain might occur.
    This will afford ample time to implement a program that builds
    upon a record of safe and orderly transportation of nuclear
    materials and makes improvements to it where appropriate, end
    of quote.
        Your testimony, though, paints a different picture,
    contrary to what the Secretary said. You indicate in your
    testimony you have been underfunded and as a result you have
    deferred critical work on transportation. I am more inclined to
    believe your testimony than that of the Secretary's. They are
    not compatible. One has to be more accurate than the other.
        The transportation of nuclear waste has tremendous
    implication for the health and safety of all Americans. It is
    not an issue that should be used as an example for political
    purposes. The fact remains, you have not studied transportation
    and have no assurance that you can do this. I do not understand
    how you can consider beginning a licensing process for the
    repository when you do not know how you would transport this
    waste.
        While we are on the issue of trust, I want to make this
    point about what I feel is the unfair treatment of Nevada. The
    issue has only been worse, and I am not talking about you
    personally, because you are new on the job and we have great
    expectations for you and, as you know, I released a hold that I
    had on you indicating that I thought you had good credentials
    and would try to be fair, and you indicated that you would be,
    and I have nothing to indicate that is not the case.
        However, we have $600,000 in oversight funds for the State
    of Nevada from fiscal year 2002 that have not been released to
    the State, yet you are also holding half of the funding for the
    State's affected counties despite the fact that your own
    internal audits have revealed problems in only two of the
    counties, that is Nye and Lincoln Counties.
        If the audits are revealing disallowed costs in one or two
    counties, I would prefer that you divert the funding to the
    other units of affected government rather than sitting on it
    all. I am not going to defend any counties that are spending
    Federal dollars inappropriately if that, in fact, is the case,
    but it is really unacceptable for you to hold all the monies
    because two counties are doing something allegedly wrong.
        And to make matters worse, the DOE has failed to provide
    oversight funding for the States and counties in the fiscal
    year 2004 budget. We put some money in, but we should not have
    to do that. That should be part of the responsibility of you,
    because there is lofty rhetoric coming out of the Department
    all the time concerning partnering with our State and its
    counties, but cutting off all funds does not seem to fill me
    with any hope that you really care about what is taking place
    in Nevada.

                               PREPARED STATEMENT

        You have explained to my staff that you called for a
    pause--that is your word, not mine--on funding, but I do not
    find any of that compelling and plan to reinsert funding in the
    fiscal year 2004 bill. I think that would be the right thing to
    do.
        Chairman Domenici has never tolerated the Department
    treating his State or any other State or any locality shabbily,
    and I am going to continue the example set by Senator Domenici
    on how New Mexico has been treated with all the many things the
    DOE has there, with what I feel should be the treatment of the
    people of Nevada.
        Thank you very much, Mr. Chairman.
        [The statement follows:]
                    Prepared Statement of Senator Harry Reid
        Mr. Chairman, I appreciate you holding this hearing today to
    discuss the budget for the Environmental Management program and the
    Yucca Mountain program.
        Like you, I am pleased to welcome Ms. Jessie Roberson, the
    Assistant Secretary for the Office of Environmental Management, and Dr.
    Margaret Chu, the Director of the Office of Civilian Radioactive
    Nuclear Waste.
        Secretary Roberson, I am pleased you are here today. As the steward
    of the largest program office within the Department of Energy, you have
    a huge responsibility.
        Our Subcommittee spent a lot of time working with you and your
    staff on the Administration's Clean-up Reform Initiative last year.
    Obviously, I am very happy to see that your budget request fully
    supports the accelerated clean-up program that has resulted from your
    efforts last year.
        The hard part begins now. We need to turn the higher dollar totals
    you are getting now and for the next few years into verifiable progress
    on getting the clean-ups done more quickly and at lower cost.
        There are several Members here from states that have much bigger
    clean-up programs than does Nevada, so I will allow them to pursue you
    on those details.
        I see that your request this year includes a plea for some
    additional flexibility on the treatment of construction projects. This
    strikes me as something that Chairman Domenici and I can at least
    consider.
        However, let me now turn my attention to today's other witness, Dr.
    Chu.
        Dr. Chu, you have been on the job for just a little over a year
    now. For whatever reason, the Administration was not able to find a
    Bible and get you sworn in before last year's hearing despite your
    confirmation by the Senate, so I am glad you are finally getting your
    first opportunity to testify before this Subcommittee.
        I want to talk for a few minutes about several components of your
    testimony.
        I am most interested in several statements you make about the
    Department of Energy's plans for submitting a license application in
    December 2004.
        One of the most important conclusions of a report issued by the
    General Accounting Office a few years ago was that the DOE never re-
    baselined the Yucca Mountain project.
        Your written testimony suggests that the only thing standing
    between you and a license application in the fourth quarter of calendar
    year 2004 is getting the full fiscal year 2004 budget request.
        This strikes me as unlikely, and I suspect it would strike the GAO
    as absurd, given the technical and financial difficulties you have
    faced for years.
        I completely understand why you would be reluctant to take advice
    from me on a Yucca Mountain-related matter, but I am going to offer you
    some anyway: if you are not going to make the deadline, you should
    probably start laying that groundwork now. If you wait until next year,
    the folks you are going to anger are going to be the Members whose
    support you need most.
        Additionally, even if you do file an application on-time next year,
    your supporters are probably going to want to know how it is that you
    were able to get everything you needed to do done correctly and
    properly when Congress has not given you anything close to your budget
    requests for the better part of a decade. All of us will want to know
    what you have done poorly or not at all in a rush to meet this
    milestone.
        As you know, one of my biggest concerns about this project is this
    issue of transporting waste across the country. Last year, the
    Secretary seemed to say that there is plenty of time to resolve
    transportation issues.
        Here is what he said:

        ``Because the site has not yet been designated, the Department is
    just beginning to formulate its preliminary thoughts about a
    transportation plan. There is an eight- year period before any
    transportation to Yucca Mountain might occur. This will afford ample
    time to implement a program that builds upon our record of safe and
    orderly transportation of nuclear materials and makes improvements to
    it where appropriate.''

        However, your testimony paints a very different picture. You
    indicate in your testimony that you have been underfunded and as a
    result you have ``deferred critical work on transportation.''
        The transportation of nuclear waste has tremendous implications for
    the health and safety of all Americans.
        It is not an issue that should be used as an example to make a
    political point.
        How are we supposed trust you to secure the health and safety of
    Nevadans, when we can't even trust you to tell the truth about what you
    are doing with your budget.
        The fact remains you haven't studied transportation and have no
    assurances that you can do this safely.
        I do not understand how you can consider beginning a licensing
    process for the repository when you don't even know how you would
    transport all this waste or if you can even do this safely.
        While we are on this issue of trust, I would like to make one final
    point about your program's treatment of the people of the Nevada.
        In my view, the Department of Energy has shown little regard for
    the people of Nevada.
        This issue has only become worse in the last few years. In fact,
    nearly $600,000 in oversight funds for the state of Nevada from fiscal
    year 2002 have not yet been released to the state. You are also holding
    on to half of the funding for all of Nevada's affected counties despite
    the fact that your internal audits have revealed problems in only two
    of them (Nye and Lincoln).
        If the audits are revealing disallowed costs in one or two counties
    I would much prefer that you divert the funding to the other units of
    affected government rather than sitting on it. I will not defend any
    counties that are spending Federal dollars inappropriately, if that is
    in fact the case, but it is unacceptable for you to be withholding
    those funds.
        To make matters worse, the Department of Energy has failed to
    provide oversight funding for the state and the counties in the state
    of Nevada in the 2004 fiscal year budget. For all of the lofty rhetoric
    coming out of the Department concerning partnering with our state and
    its counties, cutting off all funding does not fill me with hope that
    you really care about Nevadans at all.
        I understand you have explained to my staff why it is that you have
    called for a ``pause''--your word, not mine--in funding. However, I
    don't find any of that compelling and plan to re-insert funding into
    the fiscal year 2004 bill.
        Chairman Domenici has never tolerated the Department treating his
    state or his localities shabbily and neither will I.

        Senator Domenici. Senator Cochran.

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, I would like to just make an
    opening statement and submit some questions for the record.
        Mr.Chairman, I am pleased to be here today to hear the
    testimony of Secretary Roberson. She oversees a very important
    program within the Department of Energy, the Environmental
    Management program. That program is currently conducting
    testing on a type of technology which has the potential to
    expedite the clean up of nuclear sites. This process is called
    the ``advanced vitrification system'' and the research on it is
    conducted at Mississippi State University's Diagnostic
    Instrumentation and Analysis Laboratory (DIAL).
        Following last year's hearing on this program, I was
    pleased to learn the Department had invested in the preparation
    of a work plan that would perform the engineering and design to
    bring the advanced vitrification system to a pilot plant for
    further testing. The advanced vitrification system technology
    has been tested and evaluated for the Department for several
    years at DIAL.
        I commend the Administration for its efforts to reform the
    waste program and I am pleased that our subcommittee provided
    funds to demonstrate higher risk, high-payoff technologies,
    including the advanced vitrification system technology. This
    Committee has also continued to express its support for these
    systems, most recently in the fiscal year 2003 Omnibus
    Appropriations Conference Report. In that the Congress urged
    ``the Department to consider continued evaluation, development
    and demonstration of the Advanced Vitrification System'' and
    directed the Department to ``develop the vitrification-in-the-
    final-disposal-container AVS system in accordance with the work
    plan.''
        Mr. Chairman, the government should continue to invest in
    advanced backup technologies that serve as an insurance policy
    and may be essential to the national defense. I look forward to
    hearing from Secretary Roberson on the progress she and
    Secretary Abraham are making to reform the Environmental
    Management program and achieve schedule and cost savings in the
    waste program. I am also interested in the status of the
    Department's evaluation of alternative technologies and I will
    have some questions regarding that effort and her intentions
    for implementing the Department's work plan for the advanced
    vitrification system technology.
        Madam Secretary, I am here to ask a question really, but I
    will submit the questions I have for the record and ask you to
    submit your answers for the record so we will not unnecessarily
    delay the hearing, but at last year's hearing you may remember
    that I raised a question about some competing technologies that
    might be available in our clean-up efforts, and I was very
    pleased to learn at that hearing that you had directed the
    preparation of a work plan that could lead to the establishment
    of a pilot plant for competitive testing against other
    technologies.
        This approach that is being tested now at Mississippi State
    University has the potential to provide reduced costs and
    competition that is needed in my opinion in this program. We
    put in the committee report last year a suggestion that this
    was an appropriate direction for the Department to move.

         ADVANCED VITRIFICATION SYSTEM (AVS) AND RADIOACTIVE ISOLATION
                                CONSORTIUM (RIC)

        Much of the funding has shown that the potential of the
    advanced vitrification system at the Diagnostic and
    Instrumentation Laboratory at Mississippi State University is
    expected to provide analytical analysis that will answer
    questions and provide a testing history that could be used to
    compare with competing systems. I am hoping that you can give
    us an updated report on the status of this initiative and what
    your plans are for developing alternative technologies that
    offer a cost and schedule savings in this program. That is my
    purpose for being here.
        Ms. Roberson. We will be glad to do that for you, Senator.
        [The information follows:]

        As you may be aware, the DOE Office of Inspector General issued a
    report on the Advanced Vitrification System (AVS) in August 2002,
    providing the following recommendations:
      --Delay funding decisions on AVS until major uncertainties have been
            addressed;
      --Develop specific, focused performance measures to more fully gauge
            progress in the evaluation and selection of an alternative or
            advanced vitrification technology; and
      --Address all technical, programmatic, and financial challenges and
            uncertainties identified in previous studies during the
            upcoming business plan evaluation.
        I have agreed with these recommendations and developed an Action
    Plan, which describes an approach to evaluate and develop
    immobilization alternatives for treating high-level waste (HLW) at
    Hanford. We have evaluated the technical and financial merits of AVS
    and other alternatives recommended by a technical panel. Those
    alternatives include an advanced Cold Crucible Melter and an Advanced
    Joule Heated melter. As part of the evaluation, questions regarding
    technical details of the AVS were provided to the Radioactive Isolation
    Consortium (RIC). Representatives from the RIC provided the Department
    with responses to the questions and participated in a review which was
    held on February 24-28, 2003, in Richland, Washington. The two review
    teams (technical and financial) are currently drafting their reports
    and will submit them to a DOE technical working group (TWG).
        The TWG has the responsibility of reviewing the reports and making
    a recommendation to me for future research and development of
    immobilization alternatives to treat HLW. A decision is currently
    planned for June 2003. The Department has extended the period of
    performance and associated funding to the Radioactive Isolation
    Consortium (RIC) through the end of June 2003 to support this schedule.

        Senator Cochran. I appreciate it. Thank you very much.
        Senator Domenici. Thank you, Senator.
        Secretary Roberson, will you proceed? Your testimony will
    be made a part of the record as if read. If you would
    abbreviate it, we would be pleased.
        Senator Reid. If I could just say this, I want to tell you
    how much I appreciate you holding a meeting on Monday. We
    should do more of these Mondays and Fridays when we do not have
    the Senate in session. We can do this uninterrupted. We are not
    running in and out of here. It is just such a better system,
    and I appreciate you doing this.
        Senator Domenici. Thank you. The only problem is, you are
    among the few that appreciate it.
        The other ones would rather not be at work on Monday, but I
    think it is a very good day, I agree with you.
        Please proceed.

                       STATEMENT OF JESSIE HILL ROBERSON

        Ms. Roberson. Thank you. Good afternoon, Chairman Domenici,
    members of the subcommittee, Senator Cochran, Senator Reid. I
    am pleased to be here today to discuss the President's fiscal
    year 2004 budget request for the Department of Energy's
    Environmental Management program.
        Eighteen months ago, Secretary Abraham directed me to
    review from top-to-bottom the EM program and uncover those
    obstacles hindering efficient and effective clean-up of our
    sites. As you may be aware, the top-to-bottom review, which was
    published last February, concluded that EM had lost the focus
    of its core mission to remedy the legacy of the Cold War's
    impact on the environment. We had to take immediate action.
        With the top-to-bottom review as the blueprint for the
    program, we have aligned EM's focus from risk management to
    risk reduction and accelerated clean-up and closure, the
    intended mission of the Environmental Management program from
    the start. We have made remarkable progress this year towards
    our goal of saving at least $50 billion over the life of the
    program and completing the program at least 35 years earlier,
    but we must not succumb to the idea that all problems are
    solved.
        The momentum we have gained must not be compromised or
    allowed to weaken. We must stay the course. The actions and
    strategies we have implemented, while producing key results,
    must be given the chance to further evolve, bringing even
    greater gains in risk reduction and clean-up sooner.
        Underpinning these strategies are several groundbreaking
    reforms that will propel us forward in our thinking and our
    actions. We are implementing a new acquisition strategy. We are
    aggressively using and managing the acquisition process as a
    key tool to drive contract performance and risk reduction
    results. We have established 10 special project teams to carve
    new innovative paths for accelerated clean-up. Each team is
    formulating corporate-level initiatives and activity-specific
    actions to accelerate risk reduction further and in a much more
    improved manner.
        We have implemented a strict configuration control
    management system that baselines a number of key critical
    program elements. Robust change control and monitoring of those
    key elements will facilitate a high confidence level that the
    direction of the program is on course and that our objectives
    are being accomplished.
        The budget request before you is one of our most crucial
    reforms. This request, a cornerstone of our transformation, is
    a major step toward aligning performance with the resources
    needed to expedite risk reduction and clean-up. This budget
    request sets the foundation for budget planning and execution
    of the accelerated risk reduction and closure initiatives.
        Today, the EM program is still very much a defense
    environmental liability, responsible for the disposition of
    many tons of special nuclear material, 88 million gallons of
    radioactive liquid waste, 2,500 metric tons of spent nuclear
    fuel, 135,000 cubic meters of transuranic waste, and well over
    1 million cubic meters of low-level waste. I ask the committee
    to stay with us as we continue our quest to eliminate risks
    posed by these materials at a pace few of us could have
    imagined 2 years ago.
        For example, just within the last week at Savannah River,
    the Defense waste processing facility was restarted on March
    29, and completed its first canister pour with waste and a new
    glass FRIT. At Savannah River on April 1, the first 3013 cans
    for safe long-term storage of plutonium materials was produced
    in the FP line packaging and stabilization system 60 days ahead
    of schedule.
        At Rocky Flats, the Plutonium Stabilization and Packaging
    System has produced 425 containers in the first 3 months of
    this year and is producing at a rate of 140 3013's per month,
    well ahead of the schedule for that campaign.
        At Hanford, as of April 4, we are 97 percent complete in
    stabilizing plutonium residues and are expecting to finish that
    commitment 10 months ahead of schedule. We are also removing
    and stabilizing spent fuel from K basins at a rate more than
    five times greater than when we began operations and are about
    54 percent complete.
        At the Office of River Protection, waste retrieval from
    Tank C-106 commenced on March 31. At Fernald, contract
    modification was completed on March 28, making closure in 2006
    an actual contract requirement and reducing the target cost by
    $400 million. Contract transition at Mound has been
    successfully completed and is focused on completing no later
    than March 2006. At Oak Ridge, equipment removal operations
    commenced in Building K-29 and ETTP, and at Idaho, the Advanced
    Mixed Waste Treatment project sent its first TRUPACT-II to WIPP
    on March 31.
        None of these were viewed as realistic goals 2 years ago by
    our skeptics and critics. We view our job as not to let
    skeptics convince us of what we cannot do, but to demonstrate
    by our actions what we can do. New ideas and breakthroughs have
    grown from looking beyond the paradigm of risk management to
    the new focus of accelerated risk reduction. We are
    experiencing the realization that for the first time the goal
    of completing the current clean-up is within our grasp.

                               PREPARED STATEMENT

        We are at a turning point in this program in spite of the
    challenges ahead, and there are challenges, challenges that
    have existed from the beginning of this program. We did not
    create them in accelerated clean-up. They have simply been
    lying in wait. We are taking these challenges on. Our momentum
    is building. I ask for your support of our fiscal year 2004
    budget request of $7.24 billion to ensure our impetus does not
    diminish.
        Thank you, sir.
        [The statement follows:]
                   Prepared Statement of Jessie Hill Roberson
        Mr. Chairman and Members of the Subcommittee, I am pleased to be
    here today to discuss the reform of the Department of Energy's
    Environmental Management (EM) program, our progress in implementing
    cleanup reform, and the importance of sustaining the momentum for the
    benefit of the many generations to come. I appreciate the opportunity
    to sit before you and share our actions of this past year and the
    opportunities that lie before us.
        In 1996, Congress took a bold step that fundamentally altered the
    course of the cleanup program in the Department of Energy when it
    supported the accelerated closure of Rocky Flats. This was at a time
    when there was little reason and no demonstrated track record to
    believe that the Department could deliver on a challenge of this
    magnitude. Congress took further steps in 1999 when it created the
    Defense Facilities Closure Projects account and challenged the
    Department of Energy to close three of its nuclear sites by 2006. While
    it has taken significant effort and dedication, today all three of
    those sites, Rocky Flats, Mound, and Fernald, will close on or ahead of
    schedule. The vision and support that Congress provided planted the
    seeds of success in the cleanup program and we have already begun
    harvesting those fruits.
        Nonetheless, success at other sites in the EM program remained
    elusive. Year after year, it continued to take longer and cost more to
    complete the cleanup and we slowly devolved into a program that
    promised little and delivered even less. By the end of fiscal year
    2001, the environmental cleanup program stood as one of the largest
    liabilities of the Federal government.
        Last year, as ordered by Secretary Abraham, the Department
    completed a Top-to-Bottom Review of its cleanup program and concluded
    that significant change was required in how the Department attacked
    risk reduction and cleanup for the rest of its sites. Two years ago, as
    costs continued to increase, we estimated that it could take over $300
    billion and nearly 70 more years to complete cleanup--20 years longer
    than the actual operations of our oldest facilities and 25 times longer
    than the actual construction of our most complex facilities. We
    concluded that a fundamental change to how we approached, managed, and
    performed the entire cleanup program was required. Last year I started
    the effort to reform this massive program, and while our most daunting
    challenges still lie in front of us, we are now focused, moving in the
    right direction. The accelerated cleanup program has started to build
    momentum.
        Today the EM program is still very much a defense liability,
    responsible for many tons of special nuclear material in the form of
    plutonium and enriched uranium, which would make it one of the world's
    largest nuclear super-powers. In addition, the EM program is
    responsible for safely disposing of 88 million gallons of radioactive
    liquid waste, 2,500 metric tons of spent nuclear fuel, 135,000 cubic
    meters of transuranic waste, and well over 1 million cubic meters of
    low level waste. I ask the Committee to stay with us as we continue our
    quest to eliminate risks posed by these materials at a pace few of us
    could have ever imagined.
        Since the completion of Secretary Abraham's Review, the estimated
    cost to complete the cleanup program has decreased by over $30 billion
    and the time to complete will be shortened by 35 years. This means that
    the risks to our workers, our communities, and the environment will be
    eliminated a generation earlier than the previous plan. But I am not
    satisfied and neither should you. My goal is to accelerate risk
    reduction and cleanup and shorten this program even further while
    decreasing costs by more than $50 billion.
        In fiscal year 2004, President Bush is requesting a record $7.24
    billion for the accelerated cleanup program. The Administration's
    funding request continues the great progress we made last year with our
    regulators and communities. The Administration believes that this
    investment, which we expect to peak in fiscal year 2005, is crucial to
    the success of accelerated risk reduction and cleanup completion. We
    anticipate funding will then decline significantly to about $5 billion
    in 2008.
        The EM portion of the fiscal year 2004 Congressional budget
    contains some creative and innovative changes that are greatly needed
    to support our accelerated risk reduction and closure initiative. The
    first of these is a new budget and project baseline summary structure
    that focuses on completion, accountability, and visibility;
    institutionalizes our values; and integrates performance and budget.
    Requested funding can clearly be associated with direct cleanup
    activities versus other indirect EM activities. Second, where
    appropriate, we have limited the inclusion of line-item construction
    projects as activities for separate authorization and funding controls
    to facilitate timely and sensible tradeoff decisions that otherwise may
    not be possible. We solicit your support for this flexibility as we
    implement our accelerated cleanup strategies, with the understanding
    that improving project management remains a significant challenge for
    the Department. Third, this budget reflects the transfer of multiple
    activities that are not core to the accelerated cleanup mission to
    other Department elements. They include the transfer of INEEL landlord
    responsibilities to the Office of Nuclear Energy, Science and
    Technology, transfer of the long-term stewardship program to the new
    Office of Legacy Management, and several others.
        The Administration considers this program vitally important. We
    stand at an important crossroads in the cleanup program today--success
    is clearly within our reach, but so is failure. I believe the cleanup
    of the former nuclear weapons complex is far too important a matter to
    be left to chance. With your past assistance, we laid a solid
    foundation that is already showing signs of early success. Moving
    forward, we need your continued support to achieve success.
                            a year of transformation
        Last year at this time, the Top-to-Bottom Review had been recently
    released, citing recommendations to quickly improve performance. I wish
    to take a moment to recap the recommendations and update you on our
    progress in remedying these weaknesses.
        Improve DOE's Acquisition Strategy and Contract Management.--A key
    conclusion of the Top-to-Bottom Review was EM's contracting approach
    was not focused on accelerating risk reduction and applying innovative
    cleanup approaches. Processes for contract acquisition, establishment
    of performance goals, funding allocation, and government oversight were
    managed as separate, informally related activities rather than as an
    integrated corporate business process. Contracting strategies and
    practices made poor use of performance-based contracts to carry out
    EM's cleanup mission. The Top-to-Bottom Review Team recommended that
    all current performance-based contracting activities be reviewed and,
    where necessary, restructured to provide for focused, streamlined, and
    unambiguous pursuit of risk reduction.
        Move EM to an Accelerated, Risk-Based Cleanup Strategy.--EM's
    cleanup strategy was not based on comprehensive, coherent, technically
    supported risk prioritization--another important observation cited by
    the Review team. The program was implementing waste management
    practices and disposition strategies costing millions without providing
    a proportional reduction in risk to human health and the environment.
    Cleanup work was not prioritized to achieve the greatest risk reduction
    at an accelerated rate. Interpretation of DOE Orders and requirements,
    environmental laws, regulations, and agreements had created obstacles
    to achieving real cleanup benefiting neither human health nor the
    environment. Resources were diverted to lower-risk activities. Process,
    not risk reduction, had become the driving force. The Review
    recommended that DOE initiate an effort to review DOE Orders and
    requirements as well as regulatory agreements, and commence discussions
    with states and other regulators with the goal of accelerating risk
    reduction.
        Align DOE's Internal Processes to Support an Accelerated, Risk-
    Based Cleanup Approach.--The Review found DOE's own internal processes
    inconsistent with a risk-based cleanup approach. The hazards at the DOE
    sites and the liability associated with them did not appear to dictate
    the need for urgency in the cleanup decisions. The Review team
    emphasized that the EM mission cannot be accomplished by continuing
    business as usual. Immediate actions in all elements of the EM program
    would need to be taken to transform DOE's processes and operations to
    reflect the new accelerated risk-based cleanup paradigm.
        Realign the EM program so its scope is consistent with an
    accelerated, risk-based cleanup and closure mission.--The Review team
    underscored the necessity that EM should redirect, streamline, or cease
    activities not appropriate for accelerated cleanup and closure. A
    laser-like focus on the core mission was needed to realize the cleanup
    of the Cold War legacy in our lifetime. Though many of these non-core
    activities may be worthy of DOE or federal government support, a
    reassessment of the relevance of non-related or supporting missions was
    warranted to focus the EM program. The financial and administrative
    resources required for EM implementation and oversight of these
    activities represent a major commitment for EM.
        In response to the Review's recommendations we have:
        Developed and are implementing a new acquisition strategy.--In the
    area of acquisition strategy and contract management, we have not been
    idle. We are aggressively using and managing the acquisition process as
    one tool to drive contract performance. We are evaluating both the
    performance and design of every contract in this program and as
    opportunities become clear we are making corrective action. One example
    of our progress is the December 2002 award of a new contract for the
    cleanup and closure of the Mound site. The whole process, which
    required changes in DOE's internal business practices, was accomplished
    in just 6 months from time of the issuance of the Request for Proposals
    (RFP) to the awarding of the contract. Another example is at Oak Ridge,
    where we are transforming the cleanup contract into a closure contract
    with a one-year demonstration period to further our overall cleanup
    goals. Changing this contract arrangement will accelerate cleanup work
    by 5 years and save $1 billion over the life of the program at the
    site.
        But that is just the tip of the iceberg. I envision a broader
    overhaul of EM's entire acquisition process, including our methodology
    for formulating acquisition strategy, developing RFPs, identifying
    performance-based incentives, and providing oversight of contractor
    performance. We are pursuing a path to both increase competition by
    enlarging the pool of potential contractors competing for our work and
    increase the accountability of our contractors to deliver real,
    meaningful cleanup. Our acquisition strategy focuses on five areas.
    First, we are ``unbundling'' work into smaller packages where it makes
    sense. Second, we are driving innovation and improved cost performance
    through the use of small and smaller businesses, complementing the
    unbundling strategy. Third, we are actively promoting innovation in our
    cleanup work through the competitive process where improved performance
    is required. Fourth, we are extending or modifying contracts where
    excellent performance has been clearly demonstrated. Fifth, we are
    modifying and changing our acquisition processes to support these
    strategies in order to allow them to be successfully implemented.
        To complement these steps, we have launched a Contract Management
    Review Board to review our contracts from a more corporate perspective.
    Our goal is to ensure that the lessons learned, both good and bad, from
    all our endeavors are institutionalized into our contracts and business
    practices and that we suspend those contract philosophies that do not
    support accelerated risk reduction and cleanup of our sites.
        Established 10 special project teams to carve new innovative paths
    for accelerated cleanup and risk reduction.--The Top-to-Bottom Review
    identified unfocused and inconsistent work planning processes as the
    principal contributors to EM's uncontrolled cost and schedule growth.
    To address this failing, I formed ten special corporate projects, each
    assigned a specific strategic objective. Each team is formulating
    corporate level initiatives to accelerate risk reduction in a much
    improved, more cost-effective manner. Objectives include contracting,
    high-level waste, and consolidation of Special Nuclear Material. Each
    of the special projects has a dedicated project manager, supported by
    an integrated project team, to identify, plan, and execute needed
    changes in the EM program. These project teams, using project
    management principles, are key to correcting our work planning
    processes and instilling rigor into our internal management decisions.
        Meaningful, lasting reform must be the result of leadership and
    commitment but it must find its way into the very core of the
    organization to be sustained. Building a high-performing culture
    requires attracting and retaining talented people who deliver
    excellence in performance. Improving management efficiencies requires
    that organizations challenge, hold accountable, and reward top-
    performing employees. This corporate initiative does just that. These
    ten teams will herald a new standard of performance, innovation, and
    greater results for the EM program. Our goal is not just to establish
    performance-based contracts but to solidify a performance-based program
    for all who choose to have a role.
        Implemented a strict configuration management system.--Another
    reform we have implemented is a strict configuration management system
    that baselines a number of key, critical program elements. Examples of
    some of the key elements include the Performance Management Plans, EM
    corporate performance metrics, contract performance measures/
    incentives, and life-cycle costs. Strict change control and monitoring
    of these key elements will facilitate a high confidence level that the
    goals and direction of the accelerated cleanup initiative are being
    met.
        In October 2002, EM established several new corporate performance
    measures for the program. EM will continue to track corporate measures
    such as the number of geographic sites completed, the amount of
    transuranic waste disposed, and the number of plutonium metal/oxides
    packaged. However, new corporate measures such as the volume of liquid
    waste in inventory eliminated, number of liquid waste tanks closed,
    number of enriched uranium containers packaged, and amount of depleted
    and other uranium packaged are a key part to the successful execution
    of EM's accelerated cleanup strategies. In addition, EM is establishing
    site resource-loaded baselines that will enable the program to
    comprehensively track progress against its accelerated risk reduction,
    cost, and schedule objectives. The establishment of these new
    performance measures and a rigorous configuration management system are
    resulting in clear lines of accountability for what is expected. With
    this critical tool, EM is now able to make crucial corporate decisions
    that will keep the program on track, control cost increases, and
    minimize schedule growth.
        Identified work activities that directly support accelerated
    cleanup from those that do not.--A key finding of the Top to Bottom
    Review was that EM was supporting and managing several types of
    activities that may not be appropriate for an accelerated risk-
    reduction and cleanup program. In that light, I took a hard look at
    those activities and, while they may be of importance to the Department
    and the Federal government, they may not be best aligned in the EM
    program. Based on that assessment, for fiscal year 2004, the following
    identified program elements were not included in the EM budget but,
    because of their importance to the Department, have been transferred to
    other DOE organizations with which they are more appropriately aligned.
    They represent activities that are not part of the core accelerated
    risk reduction and closure mission.
      --Environmental Management staff at the National Energy Technology
            Laboratory transferred to the new Office of Legacy Management.
      --The Analytical Services Program transferred to the Office of
            Environment, Safety and Health.
      --The Radiological and Environmental Sciences Laboratory transferred
            to the Office of Environment, Safety and Health.
      --Pre-existing liabilities and long-term contractor liabilities
            transferred to the Office of Legacy Management.
      --The Long-term Stewardship Program transferred to the Office of
            Legacy Management.
        In addition, landlord responsibilities for the Idaho National
    Engineering and Environmental Laboratory were transferred to the Office
    of Nuclear Energy, Science and Technology to reflect the site's major
    mission realignment.
        Revitalized our human capital strategy.--Another key management
    reform is the human capital revitalization that strongly supports the
    President's Management Agenda. This reform focuses on building a high-
    performing culture that attracts and retains talented managers and
    staff to deliver sustained performance excellence. We have built a more
    robust performance accountability system that holds each manager and
    employee accountable for actions and results and rewards them
    accordingly. Individual performance management is being fully
    integrated into EM organizational goals; executives are being held
    accountable for achieving strategic program objectives, fostering
    innovation, and supporting continuous improvement.
        We are implementing an executive mentoring program with our senior
    executives with the objective of having a cadre of executives who are
    well-rounded and are prepared to effectively lead irrespective of the
    position to which they might accrue. We are becoming a flatter and more
    effective organization with a goal to have an organizational structure
    that is clearly aligned to deliver on our accelerated risk reduction
    and closure initiative.
        Aligned tangible, consequential results to resources with this
    budget request structure.--Given all these changes and advances, the
    budget request before you is one of the most crucial. This budget
    request structure is the foundation for budget planning and execution
    of the accelerated risk reduction and closure initiative. This new
    structure clearly identifies scope and resources that directly support
    the core accelerated cleanup and risk reduction mission from those that
    do not. The new structure consolidates risk reduction and completion
    activities into only two appropriations (defense and non-defense) in
    addition to the existing Uranium Enrichment Decontamination and
    Decommissioning Fund. This structure removes barriers to facilitate
    better resource utilization and segments accelerated completion into
    three distinct accounts to highlight accountability.
        In addition, implementation of this new structure will complement
    other management reform initiatives by focusing on completion or
    endpoint, clearly delineating how resources will be utilized (i.e., for
    direct cleanup activities or for other activities in the program that
    only indirectly relate to on-the-ground cleanup activities), and
    communicating the goals and objectives that we value. Last, but not any
    less important, this new structure will support integration of
    performance and budget for the EM program.
                      the fiscal year 2004 budget request
        The fiscal year 2003 budget was a transitional budget in which
    management reforms were developed and significant efforts were put
    forth to improve performance, accelerate cleanup, and reduce risk. The
    strategic groundwork has been laid, and the EM program is moving
    forward with its risk reduction and cleanup strategies. The investment
    we have requested in our fiscal year 2004 budget will keep EM's new
    accelerated risk reduction and cleanup strategies on track.
        The EM fiscal year 2004 budget request has been tailored to meeting
    our mission of accelerated risk reduction and completion. This budget
    fully reflects each site's new accelerated risk reduction and cleanup
    strategies. The fiscal year 2004 budget request is a major step toward
    aligning performance with the resources needed to expedite risk
    reduction and cleanup.
        The 2004 budget request for EM activities totals $7.24 billion to
    accelerate risk reduction and closure. The request includes five
    appropriations, three of which fund on-the-ground, core mission work,
    and two of which serve as support. The five appropriations and
    associated requested funding are:
      --Defense Site Acceleration Completion ($5.8 billion)
      --Defense Environmental Services ($995 million)
      --Non-Defense Site Acceleration ($171 million)
      --Non-Defense Environmental Services ($292 million)
      --Uranium Enrichment Decontamination and Decommissioning Fund ($418
            million)
        Through the implementation of accelerated cleanup strategies, the
    EM program anticipates that cleanup will be completed by 2035, at least
    35 years earlier than originally anticipated, with the potential of
    life-cycle savings of greater than $50 billion.
        In building the request, the Department applied the following
    principles and priorities:
        Protect workers, public, and the environment.--The budget request
    continues to place the highest priority on protecting workers, the
    public, and the environment. The implementation of new cleanup
    strategies will allow for an overall improvement in safety and
    reduction in risk because cleanup will be completed sooner, reducing
    the extent to which workers, the public, and the environment have the
    potential to be exposed.
        Ensure the appropriate levels of safeguards and security.--Due to
    heightened security levels throughout the nation, it is crucial that we
    maintain vigilance in our domestic security to protect our citizens.
    The EM program is responsible for many tons of surplus nuclear
    material. This budget request reflects our increased safeguards and
    security needs. In particular, the sites with the largest funding needs
    are Savannah River and Hanford. Savannah River's increase in funding
    supports protective force staffing for the HB Line Category 1 Process
    and plutonium stabilization activities, perimeter improvements,
    maintenance on security systems, vulnerability assessments, and Capital
    and General Plant Project upgrades. Hanford's increase in funding
    supports updates to the Critical Facility Vulnerability Assessment,
    additional security employees for Waste Treatment and Immobilization
    Plant construction, security clearance processing, drug testing, and
    accelerated movement of special nuclear material to Savannah River and/
    or the Grout Facility.
        Reduce risk methodically.--Accelerated risk reduction requires a
    pragmatic approach to cleanup based on real risk reduction. Risk
    reduction occurs in various stages, which involve the elimination,
    prevention, or mitigation of risk. Because safe disposal of many
    materials will take a number of years to complete, our major focus of
    risk reduction is stabilization of high-risk materials.
        The following categories of materials are considered to pose the
    highest risk:
      --High-curie, long-lived isotope liquid waste
      --Special nuclear materials
      --Liquid transuranic (TRU) waste in tanks
      --Sodium bearing liquid waste in high-level waste tanks
      --Defective spent nuclear fuel in water basins
      --Spent nuclear fuel in leaky or poor water chemistry basins
      --High TRU waste content (greater than 100 nanocuries/gram)
      --TRU waste stored on the surface
      --Remote-handled (RH) TRU waste
      --Decontamination & Decommissioning of highly contaminated facilities
        Although all of these items are to be considered when setting
    priorities, their relative ranking may vary from site to site. For
    example, the following sites have planned activities/milestones for
    fiscal year 2004 that correspond to their site-specific risk
    categories.
    Hanford
      --Close 6 single-shell tanks; the first tanks closed at the site.
      --Complete interim stabilization of Hanford single-shell tanks, which
            completes removing all pumpable liquids from single-shell
            tanks.
      --Complete 30 percent of the Hanford Waste Treatment and
            Immobilization Plant.
      --Complete stabilization of plutonium metals, oxides, and residues.
      --Complete removal of all spent fuel from the K Basins and place in
            dry storage in the Canister Storage Building.
    Idaho
      --Complete the transfer of spent nuclear fuel in the Power Burst
            Facility canal from wet storage to dry storage at the Idaho
            Nuclear Technology and Engineering Center.
      --Ship off-site a total of 1,819 kg total uranium (leaving a
            remainder of 825 kg).
      --Begin the transfer of EBR-II spent nuclear fuel from the Chemical
            Processing Plant to the Argonne National Laboratory--West for
            treatment and disposition as an interim step to removing all EM
            spent nuclear fuel from wet storage.
      --Support treatment of sodium-bearing waste: complete conceptual
            design activities for the sodium bearing waste treatment
            project, initiate preliminary design on primary technology, and
            complete Sodium Bearing Waste Treatment Facility Critical
            Decision 1 documentation; and complete characterization of
            remaining liquids and solids in the 11 underground tanks.
    Rocky Flats
      --Remove and ship remaining plutonium metals, oxides, and residue.
      --Begin stabilization and hazard removal in two TRU waste buildings.
    Savannah River
      --Permanently close tanks 18 and 19, completing the closure of the
            first tank grouping.
      --De-inventory spent nuclear fuel from the Receiving Basin for Off-
            site Fuels.
      --Complete treatment of the aqueous portion of the plutonium-uranium
            extraction (PUREX) waste at the Saltstone Facility.
      --Produce 250 canisters of vitrified high-level waste.
        Accelerate cleanup results.--To accelerate cleanup, 18 sites have
    developed Performance Management Plans (PMPs), which identify
    strategies, end states, end dates, key milestones, and commitments that
    facilitate accelerated cleanup and site closure. These PMPs were
    developed in collaboration with our state and federal regulators.
        For fiscal year 2004, several examples of sites' milestones for
    accelerated cleanup are:
    Brookhaven National Laboratory
      --Submit Brookhaven Graphite Research Reactor Draft Record of
            Decision to our regulators to determine the final end-state for
            Brookhaven Graphite Research Reactor.
      --Complete construction of the Airport/Long Island Power Authority
            Groundwater Treatment System.
    Hanford
      --Complete cocooning of the H Reactor.
      --Complete excavation/removal of 100 B/C Process Effluent Pipeline.
      --Dispose of 500,000 tons of remediation waste from waste sites and
            burial remediations in the Environmental Restoration Disposal
            Facility.
    Idaho
      --Begin shipment of RH TRU waste offsite (6-year acceleration)
            supporting completion of shipments by 2012.
      --Complete cleaning and grouting of second pillar and panel vaulted
            tank, supporting acceleration of tank farm facility closure by
            4 years to 2012.
    Lawrence Livermore National Laboratory--Livermore Site
      --Construct, install, and operate a new treatment system to address
            groundwater contamination.
    Los Alamos National Laboratory
      --Permanently dispose of over 600 cubic meters of legacy TRU waste
            through an integrated strategy of segregating, decontaminating,
            and shipping to the Waste Isolation Pilot Plant (WIPP).
      --Complete shipment of 2,000 drums and initiate retrieval of legacy
            TRU waste stored below grade.
    Nevada Test Site
      --Complete remediation of 55 release sites.
      --Continue to dispose of low-level waste from complex-wide generators
            in support of closure of other EM sites.
      --Continue characterization and shipments of TRU waste to WIPP.
    Oak Ridge
      --Complete East Tennessee Technology Park K 29/31/33 decommissioning
            for re-use (one-year acceleration), supporting closure of the
            site 8 years earlier than planned.
      --Complete Molten Salt Reactor Experiment flush salt removal, and
            complete fuel salt removal from the first of two drain tanks.
    Pantex
      --Continue pump and treatment of the perched groundwater and
            evaluation of more efficient cleanup technologies to mitigate
            the contaminated plume.
      --Complete demolition of Zone 10 ruins and initiate actions for the
            demolition of Building 12-24 Complex.
    Savannah River
      --Eliminate low-level waste legacy inventory.
      --Complete major remediation projects in the testing and experimental
            areas.
    WIPP
      --Increase carrier capacity from 25 to 34 shipments of TRU waste per
            week.
      --Procure 11 RH trailers for a total of 14.
      --Complete TRUPACT-II (a transportation container to safely transport
            either TRU waste or standard waste boxes) fabrication to obtain
            fleet of 84 TRUPACTs.
        Maintain closure schedules.--Three major sites, Rocky Flats,
    Fernald, and Mound, have accelerated closure schedules. In addition,
    two smaller sites, Ashtabula and Battelle-Columbus are scheduled to
    close in 2006. Funding in the fiscal year 2004 budget will allow these
    sites to remain on track toward project completion and site closure.
        At Rocky Flats, fiscal year 2004 funding provides for:
      --Disposing of more than 109,000 cubic meters of low and mixed low
            level waste.
      --Disposing of more than 8,600 cubic meters of TRU waste (70 percent
            complete).
      --Completing the decontamination and decommissioning of 72 work sets
            in Buildings 371, 717, 771, and 776.
      --Cleaning 194 environmental release sites (81 percent complete).
        At Fernald, fiscal year 2004 funding provides for:
      --Treatment and shipment offsite of 150,000 tons of waste pit
            material, which cumulatively represents approximately 80
            percent of the total.
      --Construction completion of Silos 1, 2, and 3 retrieval facilities.
      --Completion of D&D of Plant 1 Complex Phase II, Liquid Storage
            Complex Phase II, and Pilot Plant Complex.
        At Mound, fiscal year 2004 funding provides for:
      --Continued removal of high concentrations of tritium from Tritium
            Effluent Reduction Facility to allow for early shutdown.
      --Completion of soil excavation phase of Potential Release Site 66
            and completion of the total remediation of Potential Release
            Sites 68 and 267. These three Potential Release Sites represent
            38 percent of the total soil remediation remaining.
        At Ashtabula, fiscal year 2004 funding provides for:
      --Complete disposal of 100 percent of building remediation debris
            generated in fiscal year 2003.
      --Initiation of excavation and shipment of remaining estimated known
            scope (i.e., 38,000 tons) of contaminated soil to a licensed
            disposal site.
        At Battelle-Columbus, fiscal year 2004 funding provides for:
      --Demolition of buildings JN-2 and JN-3.
        Integrate technology development and deployment.--An integrated
    technology development and deployment program is an essential element
    for successful completion of the EM cleanup effort and for fulfilling
    post-closure requirements. The EM Technology Development and Deployment
    (TDD) program provides technical solutions and alternative technologies
    to assist with accelerated cleanup of the DOE complex.
        Through the fiscal year 2004 budget, EM technology development and
    deployment investments are focused on high-payoff site closure and
    remediation problems through a two pronged approach: Closure Projects
    and Alternative Projects.
        Closure Projects.--Principal near term closure sites (such as Rocky
    Flats, Fernald, and Mound) will be provided with technical support and
    quick response, highly focused technology development and deployment
    projects. The goal is to ensure that accelerated site closure schedules
    are achieved.
      --At Rocky Flats and the Ohio closure sites, technical assistance
            teams will assess critical technical issues and provide
            technology alternatives including the treatment and disposition
            of orphaned waste streams.
      --At Mound, innovative technologies will be developed to determine
            and enable treatment of radioactive contaminated soil beneath
            buildings.
      --At Fernald, the vacuum thermal desorption demonstration will be
            completed to provide a technical solution for an orphaned waste
            stream.
        Alternative Projects.--Alternative approaches and step improvements
    to current high-risk/high cost baseline remediation projects are our
    second focus. The goal is to enable cleanup to be accomplished safely,
    at less cost, and on an accelerated schedule. EM is focusing funds for
    fiscal year 2004 on:
      --Alternatives for Tank Waste Immobilization;
      --Alternatives for Carbon Tetrachloride Source Term Location;
      --Alternatives for Remediation of Leaked High-Level Waste Below
            Tanks;
      --Alternatives for Disposition of High-Level Salt Waste;
      --Alternatives for Immobilization of High-Level Sludge Waste;
      --Alternatives for Remediation of Chlorinated Ethenes Using Monitored
            Natural Attenuation;
      --Alternatives for Deposit Removal at Gaseous Diffusion Plants;
      --Alternatives for Cleanup of Trichloroethylene under Buildings
            (Paducah); and
      --Alternatives for Expedited Processing of Scrap Metal/Equipment.
                                   conclusion
        We planted the seedlings of transformation one year ago. We have
    fostered and guided the reforms. New ideas and breakthroughs have grown
    from looking beyond the paradigm of risk management to the new focus of
    accelerated risk reduction and cleanup. New strategies and plans are
    thriving.
        We are experiencing the realization that for the first time, the
    goal of completing EM's mission is within our grasp. We have set into
    motion a reformed cleanup program--one designed and managed to achieve
    risk reduction not just risk management; to shift focus from process to
    product; and to instill the kind of urgency necessary to clean up and
    close down the nuclear legacy of the Cold War and to protect human
    health and the environment.
        We are at a turning point for this program. We must not lessen our
    resolve. I ask for your support to continue this important work. We
    must avoid passing this intolerable inheritance to our children.
    Accelerating cleanup by at least 35 years and saving over $50 billion
    is a wise investment for our children's future.
        I look forward to working with Congress and others to achieve this
    goal. I will be happy to answer questions.

        Senator Domenici. Thank you very much. Dr. Chu.

                Office of Civilian Radioactive Waste Management

    STATEMENT OF MARGARET S.Y. CHU, DIRECTOR
        Dr. Chu. Mr. Chairman Domenici, Senator Reid and Senator
    Cochran, as the Director of the Department of Energy's Office
    of Civilian Radioactive Waste Management I appreciate this
    opportunity to appear before you today. I have a more detailed
    statement, and with your permission I will submit it for the
    hearing record.
        One year ago, I had the privilege of becoming the fifth
    appointed director of this office and the first one since the
    President and the Congress approved Yucca Mountain as the site
    to be licensed and developed as the world's first repository
    for spent nuclear fuel and high-level waste.
        In assuming the director's position at that critical time,
    I realized that I had four significant challenges: First, to
    transition the Federal and contractor organization from a focus
    on-site investigation to an enterprise with the culture of
    nuclear safety essential to obtain a license from the Nuclear
    Regulatory Commission and successfully construct and operate a
    repository.
        Second, to work with the Congress in developing the means
    of assuring stable funding needed to meet the formidable
    schedule for the licensing and development of the repository.
        Third, to create a safe and secure transportation
    infrastructure needed to move nuclear waste and spent fuel from
    over 100 locations across the United States.
        And finally, to challenge our scientists and engineers to
    find new and creative ways to enhance the operational safety
    and certainty and reduce the life cycle cost of the program.
        The President's fiscal year 2004 budget request reflects
    these changes I have implemented, and I appreciate the
    opportunity to present it to you today. With the formal
    designation of Yucca Mountain last year, our office prepared a
    detailed plan that will allow us to submit the license
    application by December 2004 and to begin placing waste in a
    licensed repository in 2010.
        Both the Continuing Resolution and the reduction of $134
    million from our fiscal year 2003 request will force us to
    reduce, eliminate, or defer some of the work we had planned,
    thus significantly increasing the risk of not meeting our
    program goals. We are currently finalizing our analysis of the
    impacts and will provide you with more detailed information
    after we have completed consulting with the Department.
        The schedule is extremely tight, and delays are costly to
    our Government and more importantly the American taxpayers. For
    every year of delay beyond 2010 the cost of storing and
    handling just defense waste is estimated to increase by $500
    million, and this figure does not include potential claims for
    damages resulting from the Government's failure to accept
    commercial spent nuclear fuel since 1998.
        In the President's fiscal year 2004 budget, we have
    requested $591 million for the program. As importantly, the
    administration will propose, in discussion with the Congress, a
    discretionary budget cap adjustment for the Yucca Mountain
    program as a provision to the Budget Enforcement Act
    reauthorization.
        Beyond fiscal year 2004 our program will need significantly
    increased funding for the design, construction, and operation
    of the repository, as well as the transportation
    infrastructure. This proposed cap adjustment will allow the
    Appropriations Committee to provide sufficient funding for the
    program's needs without adversely affecting other priorities.
    This will provide us with a greater certainty of funding and
    ensure the proper and cost-effective planning and acquisition
    of capital as that is required for such a major capital
    project.
        I now would like to provide you with some highlights of our
    fiscal year 2004 request. We will focus most of these funds and
    efforts on completing and submitting a license application to
    the NRC and accelerating work on developing a national and a
    Nevada transportation system. Let me briefly discuss these
    efforts.
        The repository development activities constitute over 70
    percent of our funding request. The main focus will be on
    completing the technical product required for a license
    application. As part of the license application preparation we
    will respond to key technical issues agreed upon between DOE
    and NRC, complete required elements of the design for the waste
    package surface and subsurface facilities, complete a
    preclosure safety analysis, and then a post-closure performance
    assessment of the repository system.
        In addition, all of the documents from years of scientific
    studies that support a license application must be loaded into
    an electronic web-based licensing support network and be
    certified at least 6 months before the license application is
    submitted.
        Also, as part of the repository development, I am
    requesting $25 million for a new cost-reduction and systems-
    enhancement program. This program is focused on improving
    existing technologies and developing new ones to achieve
    efficiencies and savings and to increase our confidence in the
    long-term performance of the repository. Funding of this
    program will play a key role in our current efforts and also
    achieve near-term cost savings and reduce the total system life
    cycle cost.
        For the transportation activities we are requesting $73
    million. We will begin the initial procurement of the cask
    fleet and place orders for long lead-time casks and equipment.
    Additionally, we will prepare for acquisition of
    transportational logistics services and assess other needs.
    Requested funding also supports greater interactions and
    dialogues with regional State and local organizations to
    address important transportation issues such as emergency
    response.
        Of the $73 million requested in the transportation program,
    about a quarter will be used to examine the development of a
    Nevada rail line to the repository. If a decision is made to
    pursue rail transportation, the Department must carefully
    analyze the environmental impacts of constructing a rail line
    within a particular corridor. Pending the outcome of this
    process, we will begin conceptual design activities, conduct
    field surveys, and pursue obtaining right-of-way. We will also
    continue to assess the viability of other transportation modes.

                               PREPARED STATEMENT

        These are the highlights of the 2004 fiscal year budget for
    my office. In conclusion, our program is a key element of the
    Department's and the administration's efforts to advance energy
    and national security, contribute to homeland security, and
    honor our environmental commitments. We now have the unique and
    historic opportunities for moving far closer to solving the
    nuclear waste problem by beginning, hopefully in less than 8
    years, to move waste underground in the world's first licensed
    geological repository. I urge your support for our budget
    request and look forward to working with you on this vital
    national issue.
        I would be pleased to take any questions that the committee
    has.
        Thank you.
        Senator Domenici. Thank you. Your statement will be made a
    part of the record.
        [The statement follows:]
                  Prepared Statement of Dr. Margaret S.Y. Chu
        Mr. Chairman and members of the Committee, I am Margaret Chu,
    Director of the Department of Energy's Office of Civilian Radioactive
    Waste Management. I appreciate the opportunity to present our fiscal
    year 2004 budget request and discuss our plans to license, build and
    operate a geologic repository at Yucca Mountain, Nevada, and our
    efforts to develop the transportation system needed to deliver the
    nuclear waste to the repository.
        The mission of the Civilian Radioactive Waste Management Program is
    to implement our Nation's radioactive waste management policy. The
    policy, as established by the Nuclear Waste Policy Act of 1982, as
    amended, requires permanent geologic disposal of commercial spent
    nuclear fuel and high-level radioactive waste resulting from the
    Nation's atomic energy defense activities. This waste must be safely
    isolated to protect human health and the environment. The disposal of
    this waste in a geologic repository is also required to maintain our
    energy options and national security, to allow a cleanup of our weapons
    sites, to continue operation of our nuclear-powered vessels, and to
    advance our international non-proliferation goals. The Department's
    consolidation of spent nuclear fuel, and high-level waste from 131
    sites in 39 States and the safe disposal of them at Yucca Mountain is
    vital to our national interest.
        The Program made significant progress in fiscal year 2002 toward
    implementing the national radioactive waste management policy. In
    February, the Secretary of Energy completed his review of our site
    characterization work and recommended the site to the President. This
    past summer, on July 9, 2002, Congress demonstrated its continued
    support for a geologic repository by approving Yucca Mountain as a
    suitable site for repository development, Public Law 107-200. The
    President signed this bill on July 23, 2002. As a result, the Program
    is focusing its near-term efforts on seeking a license to construct a
    Yucca Mountain repository from the Nuclear Regulatory Commission (NRC).
    We thank you for your strong bipartisan support of this important
    effort.
                               the 2010 objective
        The Program's key objective remains to begin receiving and
    emplacing waste at a NRC licensed Yucca Mountain repository in 2010. To
    achieve that objective the Program must, in less than eight years, seek
    and secure authorization to construct the repository, begin
    constructing the repository, receive a license to operate the
    repository, and develop a transportation system to take waste from
    civilian and defense storage sites and ship it to the repository. That
    is an extremely tight schedule.
        To construct a repository by 2010, the Program must have a
    construction authorization no later than 2007. To have that authority
    by 2007, the Program must submit a high quality and defensible license
    application no later than 2004 since the NRC will require at least
    three years to consider the application. And because we have deferred
    critical work on transportation in the past, we must begin an
    accelerated effort to develop the transportation system.
        Meeting the 2010 objective will also require far greater resources
    than the Program has thus far received. We estimate, for example, that
    it will cost about $8 billion--more than 80 percent of the budget
    required to meet the 2010 objective--to construct the repository and
    develop the transportation system. That would average more than $1
    billion a year--much higher than our previous annual appropriations.
                      the fiscal year 2004 budget request
        Our budget request for fiscal year 2004 is $591 million. The
    Program will not be able to meet the 2010 objective should funding fall
    below this level. The schedule, as I have said, is extremely tight and
    delay is costly. For every year of delay beyond 2010, the cost of
    storing and handling Departmental defense wastes alone is estimated to
    increase by $500 million. Regarding the nuclear utilities, the
    government's liability for damages for not beginning to take commercial
    spent fuel in 1998 already has been established by court decisions.
    While an accurate calculation of damages must await determinations by
    the courts, it is not unreasonable to assume that the amount of damage
    will be significant and will increase with each year of delay.
        To set the stage for our fiscal year 2004 budget request I would
    like to briefly describe our fiscal year 2002 accomplishments, our
    ongoing activities based on our fiscal year 2003 appropriation, and our
    goals for fiscal year 2004.
                        fiscal year 2002 accomplishments
        Yucca Mountain.--The Program completed nearly 20 years of site
    characterization activities investigating the natural processes that
    could affect the ability of a repository built underneath Yucca
    Mountain to isolate radionuclides from spent nuclear fuel and high-
    level radioactive waste. These investigations showed that a repository
    at Yucca Mountain can provide the reasonable expectation required by
    the NRC that public health and safety, and the environment will be
    protected. The underlying basis for our investigations and engineering
    designs has withstood many independent scientific peer-reviews and
    thorough examination by national and international oversight
    organizations. Our site characterization investigations and analyses
    clearly demonstrate that a repository within Yucca Mountain will meet
    the Environmental Protection Agency's site specific standards.
        The Department also developed a Final Environmental Impact
    Statement for a Geologic Repository for the Disposal of Spent Nuclear
    Fuel and High-Level Radioactive Waste at Yucca Mountain, Nye County,
    Nevada. During preparation of the Environmental Impact Statement, the
    Department held 66 public hearings in counties in the vicinity of Yucca
    Mountain to inform residents of the area of the possible recommendation
    and to gather their views and comments.
                      fiscal year 2003 on-going activities
        With the formal designation of Yucca Mountain as the site for
    repository development, the Program prepared a conceptual design and a
    detailed plan for repository licensing, construction, and operation.
    The goals of this plan are to submit the license application to the
    Nuclear Regulatory Commission by December 2004, and to begin receiving
    waste at Yucca Mountain in 2010. Our fiscal year 2003 and fiscal year
    2004 budget requests were consistent with this plan. The limited
    funding provided during the continuing resolution, which was 10 percent
    below our fiscal year 2002 level for the first 5 months of fiscal year
    2003 and the final fiscal year 2003 appropriation of $457 million,
    which is $134 million, or 22 percent below our request, required us to
    replan our activities. While we are trying to maintain the license
    application submittal date of December 2004, some important planned
    work must be reduced, eliminated or deferred, thus significantly
    increasing the risk that we will be unable to meet our Program goals.
    Our request for fiscal year 2004 is essential if the Department is to
    prepare a defensible license application for submission in 2004 and
    meet our other Program goals.
        The Administration also plans to submit a proposal to withdraw
    permanently from settlement, sale, location or entry under some or all
    of the general land laws certain lands comprising and contiguous to the
    Yucca Mountain geologic repository operations area. It is necessary to
    initiate this proposal now in order to ensure that we satisfy Nuclear
    Regulatory Commission licensing requirements and maintain the
    territorial integrity, security and isolation of the site.
        Yucca Mountain.--The Program is now focusing its efforts on
    completing our license application to the NRC for authority to
    construct the repository. By the end of fiscal year 2003, the Yucca
    Mountain Project expects to meet the following goals and objectives:
      --Advance the preliminary design of the repository surface and
            underground facilities and waste package elements, beyond the
            current conceptual design, sufficient for the development of
            the license application.
      --Complete additional materials testing and analyses required to
            support the license application design for waste package,
            surface and subsurface facilities.
      --Complete testing data feeds for the Total System Performance
            Assessment Postclosure Report in the license application.
      --Initiate the development of selected license application chapters
            and sections, currently estimated at approximately 10,000 pages
            in total.
      --Process the majority of the Project records and technical documents
            for inclusion into the licensing support network (numbering in
            the millions of pages).
      --Implement management improvements identified in the President's
            management agenda.
        Transportation Program.--With the fiscal year 2003 enacted
    appropriation, only very limited activities will be performed toward
    developing the transportation system, since resources will be focused
    on repository licensing activities. A number of critical steps toward
    developing a transportation system ready to ship waste in 2010 will be
    initiated. As the Department has promised, we will issue a National
    Transportation Strategic Plan by the end of this fiscal year. The plan
    will address policies, interactions with States, local and tribal
    governments, identify necessary activities and describe our approach to
    having an operational transportation system in place by 2010. We will
    complete the procurement strategy for waste acceptance and
    transportation services and equipment. We will write a concept of
    operations document and will evaluate transportation operating
    scenarios to guide the development of the transportation system. We
    will not be in a position to support the full-scale cask tests at
    Sandia National Laboratories proposed by the Nuclear Regulatory
    Commission.
                       program management and integration
        A Program whose objective is to begin constructing and operating a
    licensed repository and a transportation system in a relatively short
    period of time is very different from a Program whose objective is to
    investigate a site. It must be both structured and managed differently.
    And because budgets as well as demands and schedules are tight, it must
    be structured and managed both to meet the highest standards of
    performance and to be as efficient and cost-effective as possible.
        During this fiscal year, we have taken several initial steps to
    turn this program into a project-oriented organization that is focused
    on managing major capital projects efficiently and cost-effectively.
    Our organizational realignment in November 2002 created an Office of
    Repository Development, headed by the Deputy Director of OCRWM, and
    provided that organization with a substructure that will enable it to
    successfully manage the challenges of designing and licensing the
    repository. Through management improvement initiatives I have directed,
    we are meeting the commitments to the NRC to improve in five areas: to
    better define roles, responsibilities, authority and accountability; to
    strengthen our Quality Assurance program; to streamline procedures at
    the project; to enhance our Corrective Action Program; and to implement
    a Safety Conscious Work Environment that requires openness and
    identification of potential safety issues without fear of reprisal.
    These actions will better position us to be a successful NRC licensee
    and to meet mandated requirements for a safely operating repository.
                        fiscal year 2004 key activities
        As I indicated previously, the Office of Civilian Radioactive Waste
    Management Program's budget request is $591 million in fiscal year
    2004. This is essentially level with our original fiscal year 2003
    request, but $134 million below the enacted level. Out of our total
    budget, the amount requested for Yucca Mountain in fiscal year 2004 is
    $419 million. However, funding for Yucca Mountain under the fiscal year
    2003 enacted level is $109 million below the original fiscal year 2003
    request.
        The amount requested in fiscal year 2004 for National and Nevada
    Transportation activities increases from $10.4 million, fiscal year
    2003 enacted, to $73 million. However, our fiscal year 2003 enacted
    level is over $19 million below the original request. The significant
    increase in funding for National Transportation in fiscal year 2004
    will fund the procurement of long-lead transport casks and auxiliary
    equipment and accelerate operational capability. Funding for the
    acquisition of certain cask systems not under development by industry
    is necessary in fiscal year 2004 to allow the initiation of cask fleet
    procurement. This critical procurement will facilitate waste acceptance
    in the post-2010 time frame.
        A total of $18 million is required in fiscal year 2004 to initiate
    the development of a Nevada rail line from the national rail system to
    the Yucca Mountain repository. In fiscal year 2004, the program will
    initiate conceptual design activities, conduct environmental and
    geotechnical field surveys, and prepare a land acquisition case file
    required by Bureau of Land Management (BLM). Additionally, the
    Department will continue to assess the viability of other modes of
    transportation for shipments to the repository.
        Yucca Mountain.--Consistent with Departmental and Program
    objectives, the Yucca Mountain Project's main focus in fiscal year 2004
    will be on completing the technical products required for a license
    application for construction of the repository. The design, performance
    assessment, safety analyses, and technical data in the license
    application must be sufficient for the Nuclear Regulatory Commission to
    conduct an independent review and reach a decision to issue a
    construction authorization. The application must demonstrate that the
    repository can be constructed and operated with reasonable expectation
    that the health and safety of the public will be protected for at least
    10,000 years.
        The license application will include a description of site
    characteristics; waste package, repository surface and subsurface
    designs; the basis for development of operations and maintenance plans
    for surface and subsurface facilities; results of a preclosure safety
    analysis for the period prior to permanent closure; results of the
    total system performance assessment for the postclosure period; and a
    discussion of how the proposed waste package and repository will comply
    with applicable regulatory requirements. It also will include a
    discussion of the bases for development of safeguards, certification,
    and physical security plans and descriptions of the quality assurance
    program, test and evaluation plan for the development and operation of
    the repository, and required performance confirmation programs. The
    license application is expected to be approximately 10,000 pages. The
    documents referenced by or supporting the license application, in
    addition to other relevant documentary material, will be made available
    to the Nuclear Regulatory Commission in electronic format through a
    licensing support network. In accordance with the Nuclear Regulatory
    Commission's regulation, 10 CFR 2, Subpart J, the available relevant
    material must be loaded into the licensing support network and
    certified at least 6 months before the license application is
    submitted.
        The license application must present a defensible position that the
    repository can be constructed, operated, and closed without
    unreasonable risk to the health and safety of the public. The Nuclear
    Regulatory Commission has issued a site-specific licensing regulation
    (Title 10 of the Code of Federal Regulations Part 63, or 10 CFR 63)
    that is risk-informed and performance-based. It requires the Department
    of Energy to demonstrate in the license application that the repository
    will meet the specified performance objectives while it is being
    operated (preclosure) and after it is closed (postclosure).
        In fiscal year 2004, with the funds identified in our budget
    request, we will:
      --Respond to major Nuclear Regulatory Commission ``key technical
            issues'' necessary to support the license application. These
            are issues that NRC has asked the program to address prior to
            license application submittal.
      --Complete the electronic Licensing Support Network (LSN) and
            certification consistent with the requirements of 10 CFR Part
            2, Subpart J, at least 6 months prior to submitting the license
            application.
      --Complete required elements of the preliminary design for the waste
            package, surface facilities, and subsurface facilities, in
            support of the license application to the Nuclear Regulatory
            Commission.
      --Complete the safety analyses for Department-owned spent nuclear
            fuel and high-level radioactive waste, and Naval spent fuel for
            the license application.
      --Complete the development and Yucca Mountain Project internal review
            of five license application chapters for submittal to the
            Nuclear Regulatory Commission for authorization to construct a
            repository.
      --Complete the total system performance assessment postclosure report
            in support of the license application. This report will reflect
            increased understanding of how emplaced nuclear waste will
            interact with the natural and engineered barriers after the
            repository is closed.
      --Complete a draft of the license application for submittal to the
            Nuclear Regulatory Commission.
        Even though site characterization is complete, in fiscal year 2004
    we will continue to collect valuable scientific information for our
    Performance Confirmation baseline, which is required by the NRC for our
    license. The NRC requires Performance Confirmation to continue until
    the repository is permanently closed.
        As specified in the Nuclear Waste Policy Act, we are providing
    funding for payments-equal-to-taxes to the State of Nevada and Nye
    County, Nevada; Yucca Mountain is located in Nye County. We are also
    providing funding to the University System of Nevada and to Nye County
    and Inyo County, California for independent scientific studies. No
    funding is identified in fiscal year 2004 for the Affected Units of
    Local Government because the scope of work is yet to be defined. Fiscal
    year 2003 is a transition year and DOE will review on-going activities
    to determine which should continue as we enter the licensing phase. We
    will be working with the State and counties in the next few months to
    restructure their work and participation.
      cost reduction and system enhancement through science and technology
        The planned design for any facility is always based on currently
    available technology, and the geologic repository is no exception.
    Given a repository's long time horizon, technical developments that
    mature in the future might well improve upon the repository's current
    design in ways that reduce costs of out-year operations. Therefore, we
    have not only a duty to take advantage of current technical advances,
    but also an opportunity to foster the development of new technologies
    that hold greatest promise.
        We have initiated a new Cost Reduction and System Enhancement
    program in fiscal year 2003 and are requesting $25 million for it in
    fiscal year 2004. This program's objectives are to improve existing,
    and to develop new, technologies to achieve efficiencies and savings in
    the waste management system, and to increase our understanding of
    repository performance. The program will enable us to ensure technical
    excellence and develop new technologies; maintain our leadership in
    nuclear waste management; and keep abreast of emerging technical
    developments both here and abroad so that we can use them in enhancing
    performance, lowering costs, and maintaining our schedule.
              national transportation and waste acceptance program
        To develop a system ready to begin shipping waste in 2010, the
    program will accelerate efforts that were delayed during the site
    characterization period as a result of funding constraints. The
    Administration is requesting $73.1 million for this work in fiscal year
    2004. We plan to begin the initial procurement of the cask fleet and to
    place orders for long-lead time transportation cask systems and
    equipment as soon as possible. The contracts will be multi-year, thus
    requiring full funding before they are awarded. We will focus first on
    those transportation cask designs that have not been previously
    developed by industry and will be required for transportation. We will
    also prepare for the acquisition of transportation and logistics
    services, determine the approach for performing cask maintenance,
    develop initial site specific service plans in consultation with the
    utilities, and develop facility and equipment needs assessments for
    waste acceptance at DOE's defense waste sites.
        Funding in fiscal year 2004 will also support greater interactions
    with regional, State and local organizations to address institutional
    and technical transportation operations issues, including development
    of a final grant process for providing emergency responder assistance
    under the Nuclear Waste Policy Act to States and tribal governments.
        Of the $73.1 million requested, $18 million would be for activities
    associated with developing a waste transportation infrastructure in
    Nevada. The activities supported in this request are critical to
    achieving our goal of waste acceptance in 2010. We will continue to
    assess the transportation options for shipments to the repository.
    However, the national rail system has been used for the last 25 years
    to ship radioactive waste safely across the country. No rail link
    exists between the national rail system and the Yucca Mountain site. If
    developed, a rail line between the existing rail system and Yucca
    Mountain would cost an estimated $300 million to $1 billion, depending
    on the corridor and alignment proposed. Along with other transportation
    systems, the Final EIS for Yucca Mountain examined five potential rail
    corridors in the state of Nevada that could be used as transportation
    routes to the repository. If a decision is made to pursue rail
    transportation and to proceed with an alignment selection within one of
    the corridors, the Department must analyze the environmental impacts of
    constructing a rail line within that corridor. We will initiate
    consultation to solicit input prior to the development of documentation
    on a specific rail alignment in Nevada.
        In fiscal year 2004, pending the outcome of the NEPA process, the
    Program would initiate the conceptual design process, develop the draft
    EIS for a rail alignment, and initiate the land acquisition planning.
        Also, the program is working closely with the Office of
    Environmental Management on DOE spent nuclear fuel and high-level waste
    acceptance criteria to ensure we have an integrated, timely, and cost-
    effective approach.
                       program management and integration
        Our fiscal year 2004 request includes $23.7 million for program
    management and integration activities, an increase of $4 million over
    the fiscal year 2003 enacted level, nearly all of which is devoted to
    the Quality Assurance program. The request reflects the need to have
    the strongest possible nuclear Quality Assurance program as we move
    into the licensing phase. Quality Assurance is the cornerstone of
    assuring the NRC that the Program has implemented activities related to
    radiological safety and health and waste isolation that are required by
    NRC regulations. We will continue to implement the management
    improvement initiatives that we are beginning in fiscal year 2003 to
    meet NRC expectations for a licensee.
                               program direction
        The program is also requesting $75.1 million to support Federal
    salaries, expenses associated with building maintenance and rent,
    training, and management and technical support services, which include
    independent Nuclear Waste Fund audit services and independent technical
    analyses. These resources fund a small increase in Federal staff to
    manage repository design/licensing activities and national
    transportation initiatives and are essential to enable the Program to
    meet the goal of submitting a license application in 2004.
        Alternate Financing Proposal.--In fiscal year 2004 and beyond, the
    Program will need significantly increased funding to pay for the
    design, construction and operation of the repository, and the
    transportation infrastructure. Much greater certainty of funding is
    needed for such a massive capital project to ensure the proper and
    cost-effective planning and acquisition of capital assets. The
    Administration has indicated that, as part of a comprehensive
    discretionary cap proposal, discretionary cap adjustments for nuclear
    waste disposal activities will be proposed in the upcoming discussions
    with Congress on extensions to the Budget Enforcement Act. This
    proposal would provide adjustments for spending above an enacted fiscal
    year 2003 appropriation base level of funding in fiscal year 2004 and
    fiscal year 2005 for the program. These adjustments would be expected
    to be continued with each reauthorization of the Budget Enforcement Act
    until the repository facility is completed.
        I want to emphasize that, under these proposed adjustments, the
    Program would continue to be subject to the annual appropriations
    process and Congressional oversight. These adjustments would allow the
    Appropriations Committees to continue to evaluate our annual budget
    requests on their merits and to provide funding sufficient for the
    program's needs without adversely affecting other Congressional
    spending priorities.
                               concluding remarks
        We have reduced the near-term costs to construct the repository
    facilities required to receive initial shipments of nuclear waste by
    phasing the development of the repository while maintaining the overall
    acceptance schedule.
        We are aggressively pursuing ways to lessen the life cycle costs of
    the repository, and are instilling a safety conscious work environment
    and project organizational approach in the Program to meet our near and
    long-term goals effectively and efficiently.
        We are examining ways to remove waste from the nuclear power plants
    sooner, once the repository is opened.
        Our Program is a key element of the Department's and the
    Administration's efforts to advance energy and national security
    through science, technology and environmental management. It plays an
    important role in contributing to our homeland security, and honors our
    commitment to a clean environment for future generations. We need your
    help to get on with this effort, and to perform at the highest level
    without further delays. We urge your support for our budget request,
    and we are pleased to be able to work with you on this important
    national issue.

        Senator Domenici. Senator Reid.

                 YUCCA MOUNTAIN LICENSE APPLICATION CHALLENGES

        Senator Reid. Thank you very much, Mr. Chairman.
        Dr. Chu, do you have people that are keeping track of the
    litigation that is ongoing with Yucca Mountain, and do you have
    an idea of how many different court proceedings there are in
    number?
        Dr. Chu. Yes. My understanding is the State of Nevada has
    filed suit against the Department of Energy and has also filed
    suit against the EPA and NRC, and these suits have been
    combined, and it is my understanding, the oral arguments will
    be heard sometime this September.
        Senator Reid. They are that far away. I note that the
    General Accounting Office evaluated DOE's progress toward
    license application in December 2001 and estimated at that time
    it would take until early 2006 to resolve all outstanding key
    technical issues to NRC's satisfaction. You would agree with
    that first sentence I read, would you not? Do you want me to
    read it again?
        Dr. Chu. Since I came on board, we have worked very
    diligently with our M&O contractor.
        Senator Reid. What is M&O? What does that mean?
        Dr. Chu. Managing and operating contractor, which is
    Bechtel SAIC, and they recently completed a conceptual design
    for the repository and developed an estimate, a range estimate
    of cost and time.
        Senator Reid. I do not want to be rude. You are reading an
    answer that there is no question to it. Just listen to this
    first part of the question, okay. What I said is, I noted that
    the General Accounting Office evaluated DOE's progress toward
    the licensing application in December 2001. That is when they
    did that, and they estimated it would take until early 2006 to
    resolve all outstanding key technical issues to NRC's
    satisfaction. Is that a fair statement?
        Dr. Chu. No, I do not agree with that statement.
        Senator Reid. Okay. Tell me what you disagree with.
        Dr. Chu. Our plan is, actually I am quite confident that--
    --
        Senator Reid. No, but----
        Dr. Chu. Okay, our plan is we will be able to address----
        Senator Reid. But the GAO did say that, did they not?
        Dr. Chu. I believe so.
        Senator Reid. Yes, okay. Go ahead.
        Dr. Chu. And then as soon as I came on board we did an
    extensive review of where we were, and concluded we have a
    schedule that will enable us to address all of the technical
    issues before submitting a license application. The only
    things----
        Senator Reid. When do you expect you will be able to do
    that?
        Dr. Chu. It will be a few months before the license
    application, so it will probably be a few months before
    December of 2004.
        Senator Reid. So that would be about a year-and-a-half or
    something like that?
        Dr. Chu. Right.
        Senator Reid. Because the reason I mention that, since then
    only 70 of the 293 outstanding key technical issues have been
    resolved, and quality assurance is now being questioned by the
    NRC and the General Accounting Office, and licensing support
    network is due to be submitted by NRC 6 months ahead of the
    license application, so you feel that the only obstacle to your
    progress and ability to meet the license application deadline
    of 2004 is a lack of funds?
        Dr. Chu. Yes, I would say that, because--and let me say a
    little bit about these key technical issues. We had completed
    75----
        Senator Reid. Okay. I have 70, so you have completed 5
    more.
        Dr. Chu [continuing]. And we have another 77 in various
    stages of NRC review, and so we have a very detailed schedule
    of which ones and when we are going to submit, and we are on
    schedule right now. There will be 10 out of those 293 that NRC
    agreed because it takes long-term data collection. These will
    start to be addressed, but we will not have the answers until
    after the license application.

                     TRANSPORTATION PLAN FOR YUCCA MOUNTAIN

        Senator Reid. When do you expect to release a
    transportation strategic plan?
        Dr. Chu. Our plan is still sometime in 2003, and Senator
    Reid, part of my problem is because of the funding shortfall we
    are reassessing the whole program between the repository side
    and the transportation side.
        Senator Reid. And do you expect to involve stakeholders in
    the development of this transportation plan?
        Dr. Chu. That is something we talked about. We have not
    made a decision yet at this point.
        Senator Reid. Tell me why you would not involve
    stakeholders.
        Dr. Chu. I did not say that.
        Senator Reid. No, I know. I say, but give me a reason--you
    say you have not made a decision, but why would you not involve
    them? What would be the reasons you would not involve them?
        Dr. Chu. That is a good question. It probably would be a
    good idea.
        Senator Reid. Yes, I think it would be a good idea, don't
    you? Do you have plans for involving stakeholders in the
    decision process for selection of a transportation mode, a rail
    corridor, a final repository design, and these questions you
    may not be able to answer off-the-cuff, and if you want to do
    it in writing, that would be fine. You do not have an answer to
    that right now, do you?
        Dr. Chu. There is a bigger question involved around it,
    because of the funding shortfall, and we had made a decision
    that the highest priority is going to be our license
    application delivery. We do have a path forward. We feel
    confident we can do it. The problem is the funding shortfall,
    meaning we have to reprioritize the whole program, which
    inevitably will impact the transportation plan.
        Senator Reid. But you see, that is the problem that a
    number of people had, and that is, how can you have a license
    application if you have not done anything about transportation,
    because they should be one and the same. You cannot have an
    application unless you can figure out some way to get the stuff
    there. It is just not going to appear out of the sky.
        Dr. Chu. I agree. That is exactly the challenge I have
    right now. You see, in the past, every time we get a funding
    shortfall the transportation program was cut.
        Senator Reid. But you do not necessarily agree that was a
    good decision, do you?
        Dr. Chu. No. Therefore, what I am doing right now is to
    plan smartly and strategically so we have an increased chance
    of success, because every time you stop a program it is
    wasteful and disruptive. I want to minimize those things and
    focus on what I need to do in the transportation program that
    will always be used, given the uncertainty. In short, I want to
    design a transportation program that provides me the maximum
    flexibility and maximizes the chance of my success, given the
    funding disruptions.
        Senator Reid. My only point is, and I have been saying this
    for sometime, and others, it is not just me, that we would be
    better off if we had the transportation studies done before you
    do the license application, because people think, as I do, that
    it just is senseless to talk about filing an application if you
    do not have some way to get the stuff there, so that is a
    statement, not a question, okay.
        Thank you very much for your patience, Senator Domenici.
    One more question.

                          NEVADA STAKEHOLDERS SUPPORT

        Does the zero budget request that has been presented mean
    that you will not be working with any of the counties and you
    will no longer support their commenting on documents or
    participation at meetings or assessment of impacts or
    preparation of data for the licensing support network, or other
    provisions of information to the citizens? I guess my question
    is, how in the world could you not have something in your
    budget that affects State and local governments that are
    affected?
        Dr. Chu. I agree with you. The reason we did not put in any
    budget request is because 2003 is a transition year from site
    characterization to licensing, operation, and construction. My
    goal was to work with the State and the counties and then try
    to redefine the scope, and then their roles in this next phase,
    many years to come.
        Senator Reid. But you cannot do that with no money, can
    you?
        Dr. Chu. My plan is to work with them and then come up with
    the scope, and then we will come up with the funding,
    appropriate funding to reflect that scope.
        Senator Reid. Well, in your statement you said you were
    reassessing the repository and transportation across the board.
    What does that mean?
        Dr. Chu. Excuse me. Can you rephrase your question?
        Senator Reid. In your statement you said you are
    reassessing the repository and transportation across the board.
    That is in your statement. What does that mean?
        Oh, my staff said that is how you answered one of my
    questions. I thought it was in your statement. You said you are
    reassessing the repository and transportation across the board.
    That was your answer.
        Dr. Chu. That was a budget question? Was it a budget
    question? I guess my point is, I only have one program, which
    is the repository and transportation, so when it comes to
    budget assessment, priority assessment, I have to look at the
    program as a whole. That is what I am saying.
        Senator Reid. And I am saying that you are saying the right
    thing, but your actions are not. You have got to have the
    transportation as a part of your program. You cannot just set
    it to one side. Even though you may not have the money you
    need, you have to figure out some way to have them so they are
    both moving along.
        Senator Domenici, thank you very much for your patience. I
    appreciate it.
        Senator Domenici. You are most welcome, Senator. I note
    Senator Craig has arrived. Senator, I have not inquired, and I
    thought I would do that and then yield to you.
        Senator Craig. I am obviously behind the curve. You go
    right ahead with your questions, and I may have some at the end
    of the testimony. I merely came to give these fine ladies
    support for the cause.

             ENVIRONMENTAL MANAGEMENT'S FUTURE YEARS BUDGET PROFILE

        Senator Domenici. They have testified, and their statements
    are in the record.
        In your written testimony, Ms. Roberson, you indicated that
    you expect your budget to peak in fiscal year 2005, and then
    decline to about $5 billion in 2008. Under the most optimistic
    scenarios, completion of Rocky Flats, Fernald, and the Mound
    clean-up in 2006 will save you approximately $1 billion off
    your baseline, but by your testimony today you are indicating
    that your budget for 2008 will be $2.2 billion less than it was
    today.
        So I wonder in which activity, sites or otherwise will you
    find the additional $2.2 billion in savings, and some of the
    other sites in the complex were expecting their budgets to
    increase as a result of DOE's completing its work at Rocky
    Flats and other clean-up sites. How can you do that in an
    environment of a budget dropping $2.2 billion by 2008?

     MAJOR ACTIVITIES TO BE COMPLETED BY 2008 AS LISTED IN THE PERFORMANCE
                            MANAGEMENT PLANS (PMPS)

        Ms. Roberson. Senator Domenici, the clean-up of the three
    larger closure sites, Rocky Flats, Mound, and Fernald is
    clearly a major piece of that. We also have tens of other small
    projects which amount to, during peak times, about $600 million
    that are also scheduled to be completed 2008 or sooner.
        In addition, in our performance management plans what we
    have done is laid out the activities over time, so what you
    have are estimates for completing the necessary work. So other
    key activities would also have progressed to the point at some
    of those sites, that continue to have clean-up, we will have
    completed certain major activities. I could not go through the
    specific list, but I would be glad to provide you with an
    example of those for the record.
        Senator Domenici. Would you do that, please?
        Ms. Roberson. Yes.
        [The information follows:]

    ----------------------------------------------------------------------------------------------------------------
             Site/Ops Office             Cleanup Endstates/Endpoints                      Activities
    ----------------------------------------------------------------------------------------------------------------
    Amchitka........................  Fiscal Year 2003.................  Completion of subsurface groundwater
                                                                          modeling and risk assessment.
                                      Fiscal Year 2005.................  CRESP independent assessment and DOE
                                                                          groundwater model verification completed.
    Battelle Columbus (West           End of Fiscal Year 2006..........  Site completion including demolition of
     Jefferson North Site).                                               buildings and remediation of radiological
                                                                          contamination.
    Brookhaven National Laboratory..  Third Quarter Fiscal Year 2005...  Completion of groundwater and soil cleanup
                                                                          projects.
                                      Fourth Quarter Fiscal Year 2008..  D&D of HFBR.
                                      End of Fiscal Year 2008..........  Completion of EM Program at Brookhaven.
    Energy Technology Engineering     June 30, 2003....................  Ship TRU offsite.
     Center.
                                      September 30, 2005...............  Complete RMHF D&D.
                                      2007.............................  Complete soil remediation and install
                                                                          groundwater remediation system, completion
                                                                          of cleanup program.
    Fernald.........................  September 2004...................  Complete disposition of remaining low level
                                                                          waste and mixed waste.
                                      June 2005........................  Complete waste pits remedial action.
                                      June 2005........................  Eliminate treatment requirement, and
                                                                          transport waste from Silo 3 to Envirocare.
                                      May 2006.........................  Complete treatment of Silos 1 & 2 waste and
                                                                          transport via rail to Envirocare.
                                      December 2006....................  Complete soil excavation and on-site
                                                                          disposal facility construction.
                                      December 2006....................  Install needed infrastructure for Great
                                                                          Miami Aquifer restoration.
                                      December 2006....................  Complete facility D&D and disposal of D&D
                                                                          debris-site closure.
    Hanford.........................  2004.............................  Retrieval and closure of 5 tanks.
                                      2005.............................  Complete PFP de-inventory.
                                      2006.............................  Complete removal of K Basin SNF, Sludge,
                                                                          Debris, and Water.
                                      2006.............................  Retrieve, assay, and disposition 15,000
                                                                          drums of buried suspect TRU.
    Idaho...........................  September 2003...................  Complete cleaning and grouting of first
                                                                          pillar and panel vaulted tank.
                                      2004.............................  Complete Pit 9 retrieval demonstration.
                                      2005.............................  Remediate PBF, CFA, TAN (except groundwater
                                                                          plumes).
                                      2005.............................  Consolidate SNF from TAN to INTEC.
                                      December 2006....................  Complete cleaning and grouting of the
                                                                          remaining pillar and panel vaulted tanks.
                                      September 2008...................  Complete construction and readiness review
                                                                          of sodium-bearing waste treatment
                                                                          facility.
    Los Alamos National Laboratory..  2007.............................  Complete all groundwater protection
                                                                          measures and monitoring.
                                      2008.............................  Complete corrective actions at the highest
                                                                          priority Material Disposal Areas
                                                                          (landfills).
    Lawrence Livermore National       Fiscal Year 2006.................  Ship TRU waste off-site.
     Laboratory, Livermore Site.      Fiscal Year 2006.................  Complete groundwater remediation network.
                                      Fiscal Year 2006.................  Complete disposition of mixed and low-level
                                      Fiscal Year 2006.................   waste currently in inventory.
                                                                         Transfer program to NNSA.
    Mound...........................  August 2005......................  Complete soil remediation of key Potential
                                                                          Release Sites [PRS].
                                      June 2006........................  Complete D&D of last 6 buildings.
                                      December 2006....................  Site Closure.
    Nevada Operations Office........  2006.............................  Complete all Off-sites surface closures.
                                      2007.............................  Complete disposition of all current legacy
                                                                          TRU materials/waste.
                                      2008.............................  Complete closure of all industrial sites.
    Oak Ridge Reservation...........  2004.............................  ETTP: Complete K 29/31/33 decommissioning
                                                                          for re-use.
                                      2005.............................  Melton Valley: Ship legacy waste for
                                                                          offsite disposal.
                                      2005.............................  ETTP: Dispose of legacy waste.
                                      2006.............................  Melton Valley: Complete remedial actions,
                                                                          site closure.
                                      2008.............................  ETTP: Complete Zone 1 and Zone 2 cleanup.
                                      2008.............................  ETTP: Dispose of empty DUF6 cylinders,
                                                                          overpack and transport full and heel
                                                                          cylinders offsite.
                                      2008.............................  Closure of ETTP.
                                      2008.............................  Complete cleanup of David Witherspoon 901
                                                                          and 1630 Sites in Knoxville and the Atomic
                                                                          City Auto Parts site in Oak Ridge.
    Pantex..........................  April 2006.......................  Complete interim soil clean up measures.
                                      October 2006.....................  Complete Ogallala Aquifer groundwater
                                                                          remediation.
                                      May 2007.........................  Complete facility D&D and footprint
                                                                          reduction.
                                      September 2007...................  Complete remediation of Perched Aquifer.
                                      End of Fiscal Year 2008..........  Completion of remediation activities.
    Sandia..........................  April 2004.......................  Regulatory closure process for radioactive
                                                                          waste landfill complete.
                                      February 2005....................  CMI complete for chemical waste landfill.
                                      March 2005.......................  CMI complete for mixed waste landfill.
                                      April 2004.......................  Regulatory closure process for classified
                                                                          waste landfill complete.
                                      August 2006......................  Complete all closure activities for mixed
                                                                          waste and chemical waste landfills.
                                      August 2006......................  Complete remaining work for closure of SNL
                                                                          cleanup project B complete all sites.
                                      September 2006...................  Complete all environmental restoration
                                                                          activities related to drains and septic
                                                                          systems.
                                      September 2006...................  Complete all environmental restoration
                                                                          groundwater activities.
    Savannah River Site.............  2006 to 2007.....................  Close F Canyon.
    Separations Process Research      2007.............................  Complete clean up and release of 90 percent
     Unit.                                                                (about 22 acres) of potentially impacted
                                                                          SPRU land areas, return them to Office of
                                                                          Naval Reactors, SNR.
                                      2007.............................  Complete groundwater cleanup.
    West Valley.....................  Fiscal Year 2004.................  Complete decontamination activities.
                                      December 2004....................  Complete construction and operational
                                                                          readiness of Remote Handling Waste
                                                                          Facility.
                                      Fiscal Year 2005.................  Begin decommissioning.
    Waste Isolation Pilot Plant.....  April 2003.......................  Increase WIPP capability to receive 100
                                                                          TRUPACT-IIs and/or Half PACTs per week.
                                      Second Quarter, Fiscal Year 2005.  First receipt of RH-TRU waste.
                                      Fiscal Year 2005.................  HWFP modifications for TRUPACT-III.
                                      Fiscal Year 2007.................  Begin shipments of TRUPACT-III.
    ----------------------------------------------------------------------------------------------------------------
    The out-year funding profile of $5 billion in 2008 will afford the accomplishment of our accelerated risk
      reduction and cleanup goals, as noted in the attached table, through the synergetic combination of management
      reforms, performance management plans, and integrated project management teams.

        Senator Domenici. Does your outyear funding profile of $5
    billion in 2008 fully fund all of the site performance
    management plans you have spent the last year negotiating?
        Ms. Roberson. I believe so, sir.
        Senator Domenici. Would you confirm that and, if so, would
    you tell us which ones it does not?
        Ms. Roberson. I will confirm it in writing, but I can
    assure you that it is in line with the plan that we have laid
    out.

                      LOS ALAMOS ACCELERATED CLEAN-UP PLAN

        Senator Domenici. Regarding Los Alamos clean-up, the
    conference agreement on the fiscal year 2003 omnibus provides
    an additional $50 million for clean-up at Los Alamos National
    Laboratory consistent with the lab's performance management
    plan, that is the PMP. The DOE and the lab must have the
    agreement of the State on the PMP before the lab can proceed
    with this accelerated plan, which I support.
        A further complication is that last year New Mexico's
    environmental department proposed rulemaking actions against
    Los Alamos and Sandia based on a finding of ``imminent and
    substantial endangerment''. I understand the order has been
    stayed until May and the DOE has been negotiating with the
    State regarding the pending action.
        The State continues to push for more analysis and
    characterization of contamination, while the Department wants
    to proceed with the clean-up. What happens if the State never
    comes to an agreement with you regarding the clean-up? Will
    that impact on your ability to quickly ship waste to WIPP? Are
    you taking into account special concerns about how this could
    affect nuclear weapons operations at the laboratory at Los
    Alamos, and can you give me an update on this situation?
        Ms. Roberson. Senator, we are working very closely with the
    National Nuclear Security Administration on this matter, since
    they manage continuing operation on the site. Your facts are
    absolutely up to date and correct. The negotiations, we were
    hoping, would culminate within this week, no later than next
    week. I am actually going to be going out to New Mexico next
    week and meet with regulatory agencies there, and hope that we
    can affirm some further progress.
        If we are unable to reach agreement it will not impact our
    commitment to accelerate the TRU waste movements. We have
    invested a tremendous amount of energy and effort, working with
    EPA and NRC to do that, and we think it is in the best
    interests of New Mexico to proceed. However, the debate over
    how much characterization of the data is needed is certainly an
    element that would slow down our accelerated efforts at that
    site.
        Senator Domenici. Well, personally I would like very much
    for you to keep us posted on that. I would think that based
    upon what I know of your Department's efforts and the efforts
    through Los Alamos, and we have gone a long way in getting that
    ready, I would hope there are no additional requirements.
    Sometimes they come up with them and they are truly ridiculous.
    Sometimes they come up with them that are realistic, and I
    would hope you would pass objectively on what they really are
    all about and let us know.
        Ms. Roberson. You can count on me to do that, Senator.

                 SCIENCE AND TECHNOLOGY DEVELOPMENT INVESTMENTS

        Senator Domenici. Over the last year the Department has
    dramatically cut its budget request for investment in science
    and technology development to support clean-up missions. This
    budget has gone from $300 million to a request of $64 million
    for 2004. That budget is focused on very, very near-term
    objectives, from what we understand. Why have you abandoned the
    notion that long-term clean-up costs over the next 30 years
    could be effectively reduced through aggressive development of
    the technologies?
        Ms. Roberson. Well, Senator Domenici, we have not abandoned
    the idea that our clean-up costs could be positively affected
    by science and technology. In the fiscal year 2003 budget we
    proposed, and the Congress approved, transfers the research and
    development function in the environmental clean-up program to
    the Office of Science, which we believe allows a more efficient
    utilization of resources, and we have worked very well with the
    Office of Science in that venue.
        The element of the science and technology program that
    remains in the EM is really focused on development and
    deployment of specific initiatives that allow us to benefit
    from the many technology endeavors undertaken in the last 2
    years and tested and developed through the science and
    technology program, so our efforts now are identifying the
    issues or problems that we need technologies focused on, and
    through a competitive arrangement, allow those companies to
    demonstrate to us the most efficient and effective application
    of those technologies. We believe we have moved the program to
    the next step of identifying those best suited for deployment
    in resolving those specific issues within the program.

                  WASTE MANAGEMENT EDUCATION RESEARCH PROGRAM

        Senator Domenici. I have a long series of questions. I am
    just going to ask two more and then I will yield to Senator
    Craig.
        The Department has had an environmental program going
    called WERC, W-E-R-C, Waste Management Education Research
    Program, that involves three universities, headed by New Mexico
    State. Can you confirm today that DOE will fund WERC consistent
    with the cooperative agreement and congressional direction?
        Ms. Roberson. Senator Domenici, I can affirm that we intend
    to maintain a working relationship with WERC. We are working
    right now to ensure that the goals for the accelerated clean-up
    and the timing align with our cooperative agreement with WERC,
    and we may pursue some modification to that cooperative
    agreement from a scope perspective, but I believe that I can
    confirm we will continue to maintain a relationship with WERC
    and funding for that initiative.
        Senator Domenici. All right. That was not quite my
    question, but I will take it as an answer that you will try
    your very best, consistent with your reevaluation.
        Ms. Roberson. Exactly.
        Senator Domenici. Senator Craig.

                                 IDAHO CLEAN-UP

        Senator Craig. Well, Mr. Chairman, thank you again, and to
    both of you, thank you for being here. Both of these issues and
    areas that you have responsibility over are important to our
    country, and are certainly important to my State.
        Jessie, you are obviously by now aware of a court decision
    in Idaho as it relates to a relationship between Idaho, DOE,
    and the clean-up on site at Idaho, and how all of that works
    its way out. I guess instead of asking you if the reality is at
    hand and we have to fund all that might be suggested by that
    decision, if you had a figure to propose--my guess is you
    probably do not--or at least a ball park figure, what I would
    much prefer to suggest is that at least in my mind, and I hope
    the State's, this court decision results in DOE and Idaho
    getting back to the table not only to recognize that there is a
    responsibility there for clean-up, but the judge argues, if you
    will, all means all, but more importantly I think, as it
    relates to the environment, the aquifer, what is the right
    amount to do that meets the science, that meets the
    requirements, that clearly might at some time create an
    environmental risk if it were not exhumed and removed, and that
    that is really an important way to approach this, than to
    assume that we are going to cast a budget that over x number of
    years cleans it all.
        I am not quite sure that Congress has that kind of money,
    or does DOE in this instance, but it is obvious to me now that
    this may be an opportunity, as much as it is an obstacle, to
    sit down with the State and work those differences out and to
    understand that the State and the Federal Government by the
    judge's decisions in this instance are at least coequal in
    making determination. Would you disagree with that?
        Ms. Roberson. I think not, Senator Craig. I would hold
    myself a step away in that the litigation door is still open.
    DOE is evaluating its options.
        Senator Craig. Well, I appreciate the concept of an appeal.
    I would hope your attorneys would come back and say that when
    you have a court-ordered environment of the kind you are
    operating in in Idaho, versus a relationship to contract and
    commitment in other States, that they are, by definition,
    somewhat different.
        At the same time, I think that that gives us the
    opportunity to clarify where we need to get in Idaho.
        Ms. Roberson. Senator Craig, I would say two things. One, I
    will leave the determination as to legal actions to our
    attorneys. However, when we did reach settlement on this matter
    last year, we at that time laid out the clean-up process and
    timeline for doing just that. Obviously, the first step was the
    Gem Project, the limited excavation. We are proceeding along
    that path. We expect to continue to work with the State along
    that path, but I cannot say what remedies may occur.
        Senator Craig. I think we are going to assume successes in
    these projects versus the historic problem we have had that we
    have worked our way through. I think those successes and the
    ability to determine that the manifest can be accurately
    reviewed by exhuming will go a long way toward helping Idahoans
    understand that we can do this in a way that is scientifically
    based and resolves any problems we might have and that keeps
    our environment and our aquifer intact.
        Ms. Roberson. And Senator, that is absolutely our goal, as
    we have laid out the commitments to demonstrate that. You are
    right, excavation of all, estimated all, and I am not sure how
    to define that, is probably well into the double digits of
    billions. There are other elements to be considered, not just
    excavation but transportation of that much material. There is a
    whole school of safety and environmental matters that have to
    play into the path that is laid out.

                         YUCCA MOUNTAIN FUNDING ISSUES

        Senator Craig. Well, thank you for that. We will work with
    you to try to resolve that issue.
        Margaret, again let me thank you for the task you are
    about. It is obviously important to meet the timelines if we
    can and must, I think, aggressively try to have an application
    by no later than 2004. That is aggressive, I do not think there
    is any question about it, but then to hit the 2007 timeline to
    be able to be--at least if we can start receiving by 2010, you
    will deserve a gold medal.
        Dr. Chu. Thank you.
        Senator Craig. We would like to award that to you, or the
    person who will follow you to this office. I must tell you,
    though, I am disappointed the administration did not get the
    budget cap adjustment that it was seeking as a part of the
    budget resolution this year. I think that would have been very
    helpful, obviously. The nuclear waste fund is taking in about
    $600 million a year, and we have appropriated less than $100
    million for the fund. I will certainly work with you to try to
    resolve this so we can keep you on schedule from a resource
    standpoint, at least.
        Dr. Chu. Thank you very much, Senator Craig. We need all
    the support.
        Senator Craig. Well, I thank you. I do not know that I have
    any specific questions of you, but this remains an extremely
    important project for the country. We have been able to get
    through some of the hurdles. Now we need to get through the
    rest.
        Dr. Chu. Thank you.
        Senator Craig. Thank you, Mr. Chairman.
        Senator Domenici. Thank you.
        Dr. Chu, I think you know that you are in a difficult
    position. That goes without saying, but frankly, you are up to
    it. You have the knowledge and strength to state what it is and
    how things are as you understand them. Leave the politics and
    the other things to us. You just do your work as you see it
    should be done. That is why we ask you to do this job, and we
    commend you for that.
        It is difficult, there is no question, and clearly the
    State of Nevada, with its wonderful Senators, has a different
    opinion, it appears, than what the law would have in mind for
    you to do, and in that regard you will constantly be on a
    rendering stick, whatever that is. You will be going around and
    around, and you are not very heavy so you cannot go around too
    much.
        There is not too much to render. In any event, we wish you
    the best.

                         SCIENCE AND TECHNOLOGY FUNDING

        Over the last years the Department has cut its budget--I am
    speaking now of science and technology--as far as the clean-up
    mission. Could I ask, why have you abandoned the notion that
    long-term clean-up costs over the next 30 years could be
    reduced by the deployment of new technologies?
        Ms. Roberson. Sir, we have not abandoned the idea that
    those costs can be positively affected; and our attempt is to
    integrate those technologies that have been developed as a
    result of investments over the last 10 years that they are
    integrated into the actual demonstration of work in the field,
    and so we are, through a competitive process, trying to
    integrate the best of those technologies into our actual work
    plans.
        Senator Domenici. Frankly, I thought you were going to say
    that a quick look at how much money we spent every year for the
    last 10 years in this area, put up against how much of that
    technology has proved useful, that you might have arrived at
    the conclusion that we were wasting a lot of money. Had you
    said that, I would have agreed with you. You said it
    differently, but that is all right.
        I do not know that we got so much out of the budgets of
    $200 million and $300 million in science and technology towards
    better ways of controlling this area. Everybody had a new idea.
    Everybody funded it, but not too much came out of it, so what
    you are saying is the lower number, you are still picking and
    choosing the very best, is that correct?
        Ms. Roberson. Exactly. That is exactly what we are trying
    to do, out of those 10 years of investment, competitively
    identifying those that we have funded, and pushing those into
    the field to actually help solve the problems.

            NEW MEXICO ENVIRONMENTAL DEPARTMENT PROPOSED RULEMAKING

        Senator Domenici. Last year, New Mexico's environmental
    department issued a proposed rulemaking action against Los
    Alamos and Sandia, based on the findings of quote, imminent and
    substantial endangerment. I understand the order has been
    stayed until May, and that DOE has been negotiating with the
    State. Can you give me an update on the situation, and do you
    believe there is imminent and substantial endangerment, to use
    their words, at Sandia and Los Alamos?
        Ms. Roberson. Senator Domenici, I do not believe there is
    imminent safety or environmental threat to the public. The
    negotiations are ongoing. We were hopeful that they would
    culminate within the next 2 weeks. I am going to go out myself
    next week and meet with the regulatory agencies and hopefully
    find that they are very near culmination.
        Senator Domenici. Well, I hate to say it, but I do not
    believe there is either, so we agree for starters. I would hope
    that they would get serious about this. We do not need any
    publishing language like this if they do not really have
    something. We have enough problems when there are serious
    problems, other than to have somebody bantering them around, so
    I urge that you move, and move very diligently to see if you
    cannot rectify this.
        On the safeguards and security, just a couple of questions.
    The Department has a unique and challenging security
    environment because of the special nature of our mission. Many
    tons of special nuclear materials are under our control.
    Security costs throughout the Department have been increasing,
    particularly in the aftermath of September 11.
        The costs to the Department have been going up, and now
    that our country is at war with Iraq the condition has been
    raised to an orange level, as the DOE sites refer to, in the
    security condition 3. As a result, Senator Reid and I, and with
    help from Senator Stevens last week led the fight here in the
    Senate to add significant sums to the 2003 supplemental to
    cover projected heightened security costs that the Department
    did not budget. What threat level or security condition did you
    assume in the development of the 2004 budget request?
        Ms. Roberson. We assumed a SECON 3, which is the, I guess,
    equivalent to a yellow, and so once elevated to an orange it
    elevates us to a SECON 2 and does include some additional cost
    to the program.
        Senator Domenici. That will not be sufficient, then, if the
    Department remains at security condition 3 for all of 2004.
        Ms. Roberson. That is correct. That is an elevated
    security. We are in an elevated security posture other than we
    assumed for fiscal year 2003, and if we proceed into fiscal
    year 2004 it would be the same situation.

                         SAFEGUARDS AND SECURITY COSTS

        Senator Domenici. Are there investments that we could make
    today that would dramatically reduce operational security costs
    over the next few years, and if you do not know about them now,
    could you supply them for the record?
        Ms. Roberson. I know a few, but I would probably like to be
    a bit more thoughtful.
        [The information follows:]

        Although we continue to evaluate new barrier and system
    technologies, the most dramatic reductions in security infrastructure
    costs are achieved by consolidating materials. As an example, the Rocky
    Flats security budget request in fiscal year 2004 is $18 million less
    than the fiscal year 2003 budget based on the removal of plutonium and
    highly enriched uranium from the site. Similarly, the disposal of
    transuranic waste at the Waste Isolation Pilot Plant from 23 locations
    nationwide will have a significant impact on lowering safety and
    security costs at those sites.

        Senator Domenici. Tell us about a few.
        Ms. Roberson. Obviously, consolidation of material at Rocky
    Flats has a very positive impact on our security costs. Also,
    consolidation at Hanford in a limited number of areas, versus
    where we have material stored now. That is the strategy that we
    are employing at all of our sites, and then every step you can
    progress in the consolidation arena brings down your costs.
    There are obviously also technological actions that can be
    taken which make sense for longer-term storage versus short
    term.
        Senator Domenici. We seem to get rather a good response
    from the chairman of Appropriations if we bring these issues
    up. If they are not included in a budget we are able to get
    them in a supplemental or add them as the bill goes through.
        Being at an accelerated level of security is not free. If
    your budget provides for a different level somebody has to put
    up the resources, and if you do not have it in there, you take
    it away from something, and we do not want that to happen when
    you have a close budget like you have, that you have already
    negotiated it out pretty thin.

                            POST CLEAN-UP EMPLOYMENT

        Rocky Flats as a model, you often refer to the success of
    Rocky Flats, and when you talk about what the environmental
    clean-up program should actually be. Certainly there are
    lessons to be learned from the DOE experience there. In many
    ways, the situation was unique in that the plant was relatively
    small, it was located in a large metropolitan area and provided
    more job opportunities for displaced workers, and the local
    community was committed to transitioning the site to a wildlife
    refuge with very little continuing employment.
        This contrasts dramatically with clean-up projects in DOE's
    communities. That is, in many cases we owe most of their
    livelihood in the area to the DOE presence and fewer
    opportunities for displaced workers, and long, or continued
    high level of DOE employment. That is not to say, having
    repeated those, that we ought to be liable for all of them, but
    the truth of the matter is, that is the case.
        There are as many or more people involved getting paychecks
    during the clean-up episode at Hanford and others than there
    were when they were in full operational scale, and that means
    that people are growing accustomed to a DOE paycheck. In fact,
    on the West Coast they are growing accustomed to paychecks in
    larger numbers for as high a pay as they were getting when all
    of the reactors were full-steam-ahead in the Scoop Jackson era,
    and it is very hard for you to make headway when people say,
    you cannot change the contract because we cannot lower the
    employment, is that not correct?
        Ms. Roberson. That is correct. I would say the employment
    changes as we move forward, we have worked very hard to tie
    those to completion of the actual work. Unfortunately, this is
    a program of fixing problems. The problems exist, and our job
    is to address them, which means at some point you are done
    fixing the problem.
        Senator Domenici. You understand why I raise it.
        Ms. Roberson. Yes.
        Senator Domenici. Because you are telling us, and we
    appreciate it, at least you have something going when others
    had nothing. You have the Rocky Flats model and you are saying,
    we are using it. I have just given you one big difference,
    right?
        Ms. Roberson. Yes.
        Senator Domenici. Rocky Flats does not anticipate continued
    employment post-completion, so it will not have as instant a
    relevance to Hanford, but you are suggesting you are pursuing
    that vigorously, is that correct?
        Ms. Roberson. Senator Domenici, you said it absolutely
    right. One of the clear challenges we have, really, across the
    country, is the recognition that completing the environmental
    issues in and of itself is the thing that opens the door to
    other economic opportunities, rather than maintaining the
    clean-up over a longer period of time.
        Senator Domenici. Okay, and they are beginning to
    understand that that is going to be the reality?
        Ms. Roberson. Well, I hope we are effective. That is
    certainly what we are trying to communicate.
        Senator Domenici. Well, I think that we are going to
    support you. I mean, we may get a lot of people that will not,
    but we have to get there some day or we will never reduce the
    cost.
        Ms. Roberson. Well, I think some of the progress that we
    are making is a demonstration, and I do see an alignment
    occurring, but it does take time, you are absolutely right. It
    is a bit more challenging, depending on the circumstances at
    each site, but it is not applying a cookie-cutter approach, it
    is applying the logic to the circumstances for each site.
        Senator Domenici. All right.
        Did you have something else?
        Senator Craig. I was just going to react, Mr. Chairman, by
    saying in relation to what you need, I am looking at what the
    INEL was, if you will, in the production era versus in large
    part now a clean-up era. We were 13,000, now we are 6,000. It
    seems like the reduction of workforce has not been such an
    obstacle there. Does it remain that much of an obstacle
    elsewhere?
        Ms. Roberson. I would have to say, over the last few years
    we have evolved. It certainly is an obstacle generically in
    that the understanding that the environmental clean-up program
    is a project-oriented program focused on resolving an issue,
    that if it takes you 30 years to do something it probably is
    not a good thing for the environment or the public, and that
    focus and that understanding is not something that has
    necessarily permeated the entire program.

                         PRIVATELY FUNDED TECHNOLOGIES

        Senator Domenici. I have a series of questions regarding
    Title X of the Energy Policy Act, but I will submit those for
    the record for you to answer.
        Privately funded technology for EM. Let me just ask you, I
    am aware of at least one company that has put their own money
    into developing an innovative waste treatment and separation
    technology, and if it works, could it reduce the cost of tank
    clean-up at Hanford and other sites? I have noted the
    President's 2004 budget includes a commitment that DOE will
    share part of the savings from the development of innovative
    clean-up technology as an inducement to encourage contractors
    to take financial risks to develop breakthrough technologies.
    Is the Department going to encourage such private sector
    solutions?
        Ms. Roberson. Senator, I am actually very familiar with
    this specific technology and venture that you are speaking of.
    I actually have a team that is going to go out to California
    and monitor their testing. There is probably another step in
    their demonstrating the application of that technology to our
    specific waste, but we are certainly watching, and we are
    encouraging them to proceed.
        Senator Domenici. I am not touting it, that technology, but
    rather the policy.
        Ms. Roberson. And it is the policy we are deploying in the
    clean-up program.
        Senator Domenici. It seems to me to be far more exciting
    than spending our own money on technology. People might be
    rather excited if, in fact, they developed one and you gave
    them this kind of a situation. It might be pretty good.
        Senator Craig, did you have anything further?
        Senator Craig. No, thank you, Mr. Chairman.
        Senator Domenici. Dr. Chu, did you have anything further to
    say, or comment?
        Dr. Chu. I hope in fiscal year 2004 we get the full
    funding. It is extremely critical for us. The next 12 to 18
    months are extremely critical for the viability of the program.
    I want to reemphasize that, and thank you very much for all
    your support.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. Thank you.
        Ms. Roberson, did you have anything further?
        Ms. Roberson. Senator, I would like to thank you and the
    subcommittee for the earlier comments on our proposed budget
    structure and our fiscal year 2004 budget request. That is a
    critical element of our reforms. It does, indeed, pattern after
    the actions that were taken for Rocky Flats in 1998-1999. I
    would be glad to provide any additional information, but it is
    a critical phase in our reform.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
         Questions Submitted to the Office of Environmental Management
                Questions Submitted by Senator Pete V. Domenici
                               rocky flats model
        Question. Ms. Roberson, you often refer to the success at Rocky
    Flats when you talk about what the environmental clean-up program
    should be. Certainly there are lessons to be learned from the DOE
    experience there. However, in many ways the situation at Rocky Flats
    was unique in that the plant was relatively small, it was located in a
    large metropolitan area that provided more job opportunities for
    displaced workers, and the local community was committed to
    transitioning the site to a wildlife refuge with very little continuing
    employment. This contrast dramatically with clean-up projects in ``DOE
    communities'' that in many cases owe most of their livelihood to the
    DOE presence, have fewer opportunities for displaced workers, and long
    for continued high levels of DOE employment.
        Are you perhaps too optimistic that the Rocky Flats model will work
    at many other sites?
        Answer. In the 1996 Baseline Environmental Management Report, DOE
    estimated that it would cost $17.3 billion and take until 2055 to clean
    up the Rocky Flats Site. By utilizing an innovative and completion
    oriented cleanup strategy we were able to reduce cleanup costs to $7.1
    billion and the cleanup will be completed in 2006. The major elements
    of our cleanup approach at Rocky Flats include:
      --insisting on an uncompromising pursuit of top performance;
      --creating and implementing a closure ``project'';
      --implementing an aggressive performance-based; contracting strategy;
      --employing innovative project planning and delivery;
      --effectively managing human resources; and
      --using innovative technology where applicable.
        While the situation at the Rocky Flats site was unique in some
    ways, every site has cleanup circumstances and variables analogous and
    common to Rocky Flats. I certainly recognize that a ``one size fits
    all'' approach to cleanup will not work. However, I do believe the
    underlying cleanup strategy that we are using at Rocky Flats is
    applicable in large measure to other sites as well.
        Question. What encouragement can you provide that we will see the
    same level of progress at other sites such as Hanford, Idaho, and
    Savannah?
        Answer. The cleanup challenges at larger sites such as Hanford,
    Idaho, and Savannah River are formidable. Nonetheless, the underlying
    approach we are utilizing at Rocky Flats is applicable to cleanup at
    all of our sites. In particular, I believe that developing and
    implementing innovative acquisition strategies that foster accelerated
    cleanup and risk reduction through the use of performance based
    incentives is key to improving the effectiveness and reducing the cost
    of cleanup at our sites. These contracts and the associated performance
    incentives must be structured around cleanup strategies that
    aggressively focus on accelerating risk reduction to achieve defined
    end states. In addition, we have taken a number of reform measures to
    improve the effectiveness of the Environmental Management (EM) program
    as a whole. These include:
      --developing a new set of corporate performance measures that track
            progress against cleanup and risk reduction goals;
      --restructuring the EM budget to clearly identify the scope and
            resources that directly support EM's core accelerated mission
            from those that do not; and
      --placing a number of key program elements such as life-cycle costs,
            contract performance incentives, and site baselines under
            strict EM Headquarters configuration management control.
        I believe that the steps we have taken to reform the EM program
    will facilitate a high level of confidence that the goals and direction
    of EM's accelerated cleanup and risk reduction mission will be met.
                                 future budgets
        Question. Your total budget proposal for fiscal year 2004 is
    approximately $7.2 billion. In your written testimony, you indicated
    that you expect your budget to peak in fiscal year 2005 and then
    decline to about $5 billion in fiscal year 2008. Under the most
    optimistic scenarios, completion of the Rocky Flats, Fernald, and Mound
    clean-ups in 2006 will save you approximately $1 billion off of your
    baseline. But by your testimony today, you are indicating that your
    budget in fiscal year 2008 will be $2.2 billion less than what it is
    today. From which sites specifically will you find the additional $1.2
    billion in budget savings?
        Answer. The cleanups of Rocky Flats, Mound, and Fernald are clearly
    a major segment of the reduction in resource requirements. We also have
    tens of smaller projects across our sites which amount to about $600
    million that are scheduled to be completed by 2008 or sooner.
    Additionally, other major activities at our large sites, which
    previously were not scheduled to be completed until after the closure
    sites, are now scheduled to be completed by 2008 in accordance with our
    performance management plans.
        Question. Some of the other sites in the complex were expecting
    their budgets to increase as a result of DOE completing its work at
    Rocky Flats and other closure sites. How will you do that in an
    environment of a budget dropping $2.2 billion by fiscal year 2008?
        Answer. Prior to the Top-to-Bottom (TTB) Review, the approach was
    to accelerate Rocky Flats and the other closure sites and re-invest the
    savings after 2006 in the cleanup of other sites. As a result of the
    TTB Review, the Department concluded that the cost to accelerate
    cleanup and risk reduction based on new strategies, with some funding
    increases over the next several years, would allow work completion
    earlier than had been previously planned, with an earlier and larger
    life-cycle savings. This strategy allows for cleanup work to be pulled
    forward at more sites so that the communities actually benefit faster
    from a cleaner environment than was previously thought possible.
        Question. Does your out-year funding profile of $5 billion in
    fiscal year 2008 fully fund all of the site performance management
    plans you have spent the last year negotiating?
        Answer. Yes. We believe with the synergetic combination of
    management reforms, performance management plans, and integrated
    project management teams, the out-year funding profile will afford the
    accomplishment of our accelerated risk reduction and cleanup goals for
    2008.
                            safeguards and security
        Question. The Department of Energy has a unique and challenging
    security environment because of the special nature of our mission and
    the many tons of special nuclear material under our control. Security
    costs throughout the Department have been increasing for years, and
    particularly in the aftermath of September 11. And now that our country
    is at war with Iraq, the security condition has been raised to the
    ``orange level'', or as DOE sites refer to it--Security Condition 3. As
    a result of this, Senator Reid and I, with great help from Senator
    Stevens, last week led the fight here in the Senate to add significant
    sums to the fiscal year 2003 supplemental to cover projected heightened
    security costs that the Department did not budget for.
        What threat level or security condition did you assume in
    developing the fiscal year 2004 budget request?
        Answer. The fiscal year 2004 budget request assumes a security
    condition (SECON) 3 modified threat level, which corresponds to
    Homeland Security's threat level ``elevated/yellow.''
        Question. Will it be sufficient if the Department remains at
    Security Condition 3 for all of fiscal year 2004?
        Answer. The fiscal year 2004 budget request provides resources for
    the Department to remain at security condition 3 modified, which
    corresponds to Homeland Security's threat level ``elevated/yellow.'' If
    SECON 2 (``high/orange'') is implemented in fiscal year 2004, the
    Environmental Management Program would assess the adequacy of the
    fiscal year 2004 budget request based on the length of time SECON 2 is
    in force.
        Question. Are there investments we could make today that would
    dramatically reduce operational security costs over the next few years?
    If so, please provide specifics for the record.
        Answer. Although we continue to evaluate new barrier and system
    technologies, the most dramatic reductions in security infrastructure
    costs are achieved by consolidating materials. As an example, the Rocky
    Flats security budget request in fiscal year 2004 is $18 million less
    than the fiscal year 2003 appropriation based on the removal of
    plutonium and highly enriched uranium from the site. Similarly, the
    disposal of transuranic waste at the Waste Isolation Pilot Plant from
    23 locations nationwide will have a significant impact on lowering
    safety and security costs at those sites.
               waste management education and research consortium
        Question. For almost 12 years the Department has funded the highly
    successful WERC, the Waste Management Education and Research
    Consortium, based in New Mexico. WERC has developed an impressive
    record for training new talent for the EM programs, I fear that the
    failure to request funding is short-sighted. The fiscal year 2003
    Omnibus included direction to the Department to fund WERC at last
    year's level of approximately $2.5 million.
        Can you confirm today that DOE will fund WERC consistent with the
    cooperative agreement and the congressional direction?
        Answer. We are committed to funding the Waste Management Education
    and Research Consortium in fiscal year 2003 consistent with
    congressional direction. Presently, we are working to ensure that the
    goals for accelerated cleanup and the timing align with our cooperative
    agreements. Accordingly, we may pursue some modification to our
    cooperative agreements to ensure needed alignment with the accelerated
    cleanup goals of the Environmental Management program.
                         idaho removal of buried waste
        Question. As you are very much aware, there is a long-running
    dispute between the DOE and the State of Idaho regarding the removal of
    buried waste on site at Idaho. The DOE has maintained that it has a
    responsibility to remove a portion of the waste stored above ground,
    while the State has argued DOE is on the hook to remove all of the
    buried waste at Idaho. The resolution of this dispute has major impacts
    on the clean-up cost and schedule at Idaho. Last week, a Federal judge
    issued a ruling that raises serious concerns about the Department's
    chances that the 1995 clean-up agreement will be interpreted as the
    Department has suggested.
        What are the cost and schedule implications at Idaho if the DOE is
    required to remove all of the buried waste?
        Answer. Based on the judge's recent ruling, we believe the current
    estimate for retrieval, characterization, packaging, and disposal of
    all the buried waste is at least $10 billion. The current schedule
    estimate indicates that the work could not be completed before 2018.
                        completion of clean-up at sandia
        Question. The Department has proposed spending approximately $22
    million for the clean-up of Sandia National Laboratory in fiscal year
    2004. Will that level of funding keep Sandia on track for closure in
    fiscal year 2006?
        Answer. Yes, the requested fiscal year 2004 funding will keep
    Sandia on track to complete the EM mission in fiscal year 2006.
                        clean-up situation at los alamos
        Question. The conference agreement for the fiscal year 2003 Omnibus
    provides an additional $50 million for clean up at Los Alamos National
    Laboratory (LANL) consistent with the Lab's performance management plan
    (PMP). Of course, the DOE and the Lab must have the agreement of the
    State on the PMP before the Lab can proceed with the accelerated plan.
    Further complicating the situation, last year the New Mexico
    Environmental Department issued proposed rulemaking actions against Los
    Alamos and Sandia based on a finding of ``imminent and substantial
    endangerment.'' I understand that the order has been stayed until May
    and that the DOE has been in negotiations with the State regarding this
    pending action. The State continues to push for more analysis and
    characterization of contamination, while the Department wants to
    proceed with the clean up.
        What happens if the State never comes to agreement with the DOE
    regarding the clean-up plan for LANL?
        Answer. In the event that we are not able to come to agreement with
    the regulators on an accelerated cleanup path for Los Alamos National
    Laboratory, we would propose a base funding level as enumerated in the
    Office of Environmental Management's fiscal year 2003 Congressional
    Budget Request, escalated appropriately. At this level, we would
    proceed with cleanup in a non-accelerated fashion. This would allow us
    to manage risk to protect the public and the environment, but would
    limit our ability to actually reduce risk, thereby extending the
    schedule for ultimate cleanup and increasing the life-cycle cost.
        Question. Will that impact our ability to quickly ship waste out of
    LANL to WIPP?
        Answer. Yes. Consistent with Section 315 of the fiscal year 2003
    Energy and Water Development Appropriations Act, a substantial portion
    of the fiscal year 2003 budget authority for the Los Alamos National
    Laboratory is currently unavailable because of the State of New
    Mexico's failure thus far to endorse the site's Performance Management
    Plan. This is affecting the Department's ability to accelerate the
    shipments of transuranic waste to the Waste Isolation Pilot Plant. The
    significant increase in shipments called for in the PMP requires an
    early investment in systems to increase the capacity at the LANL to
    process and ship waste.
        Question. Are you taking into the special concerns about how this
    could affect nuclear weapons operations at Los Alamos?
        Answer. The current rate of transuranic (TRU) waste shipments
    exceeds the rate of TRU waste generation from nuclear weapons
    activities at the Los Alamos National Laboratory. Consequently, there
    is no immediate concern that nuclear weapons operations would be
    curtailed or otherwise adversely impacted because of a lack of waste
    storage space. There is an estimated 2 years of storage capacity
    ``cushion''. As we achieve the commitment in the Performance Management
    Plan to increase the number of waste shipments, the potential impact to
    nuclear weapons operations will be reduced even further.
        Question. Can you give me an update of this situation?
    (Background.--The Department is proposing that over 2000 drums of
    legacy transuranic waste will be shipped to WIPP in fiscal year 2004.
    This is 10 percent of the TRU waste at LANL, much of it stored in tents
    up on top of a Mesa. You will recall this area was almost burned in the
    Cerro Grande fire of 2000.)
        Answer. The Los Alamos National Laboratory has approximately 46,000
    drum equivalents of transuranic waste in storage. The LANL Performance
    Management Plan, calls for shipping 2,000 drums of the highest-activity
    and dispersible transuranic waste to the Waste Isolation Pilot Plant by
    the end of fiscal year 2004. To this end, the U.S. Nuclear Regulatory
    Commission approved a revised method of meeting certain shipping
    requirements for this subset of transuranic waste at LANL. The first of
    these drums was shipped in December, and more drums were shipped in
    January. This activity is referred to in the LANL PMP as the ``Quick to
    WIPP'' plan. In addition, the LANL PMP calls for disposing of all
    transuranic waste at LANL by 2010. LANL is currently averaging one
    shipment (42 drums) to WIPP per week. The plan is to increase to two
    shipments per week in May.
        Additional actions have been taken to reduce the risk of fire
    danger for this waste. Storage dome roofs are being replaced with
    material having greater fire resistance. Fire loading within the domes
    has been reduced; for example, wooden pallets have been replaced with
    metal. Wooden crates containing waste are now being stored in large
    metal containers; and brush and trees have been trimmed away from the
    storage areas.
                         science and technology budget
        Question. Over the last several years, the Department has
    dramatically cut its budget request for investments in science and
    technology development to support its clean-up mission. The budget has
    gone from over $300 million to a request of just $64 million for fiscal
    year 2004--and that budget is focused on very near-term objectives.
        Why has the Department abandoned the notion that long-term clean-up
    costs over the next 30 years can be effectively reduced through
    aggressive development of new technologies?
        Answer. The Office of Environmental Management's cleanup program
    has not abandoned the notion that long-term cleanup costs over the next
    30 years can be effectively reduced through aggressive development of
    new technologies. EM's cleanup program clearly faces many technical
    challenges that must be met through improved science and technology as
    it moves forward to address the cleanup of the nuclear weapons complex.
    The Department has included in the fiscal year 2004 budget request over
    $63 million for critical, high-payback technology development and
    deployment activities where quantum improvements can be gained, as well
    as on activities supporting closure sites. The Department has also
    requested over $29 million for the Office of Science to support
    scientific research to address cleanup problems identified by EM. In
    addition to this science and technology funding, EM is also moving to
    renegotiate and restructure many of our site contracts to further
    provide incentives for our contractors to seek out the best possible
    science and technology solutions to cleanup problems.
                    title x of the energy policy act of 1992
        Question. What is the level of claims for reimbursement that is
    currently pending payment by DOE (i.e. through 2001)?
        Answer. As of May 7, 2003, the total outstanding balance of
    approved claims that are eligible for reimbursement pending future
    appropriation of funds is $78.5 million. This is the remaining balance
    after DOE's April 2003 payment to eligible EPACT Title X licensees of
    its fiscal year 2003 appropriation for this purpose. The outstanding
    balance reflects unpaid claims submitted by the licensees by May 1,
    2002, for work performed through 2001. It does not include
    approximately $38 million in new claims submitted by May 1, 2003, for
    work performed through 2002, which have not yet been reviewed and
    approved by DOE.
        Question. How much of the claims have been audited?
        Answer. The review and audit of all of claims submitted and
    received by May 1, 2002, is complete. The review and audit of all
    claims submitted by May 1, 2003, will be completed within 1 year of the
    submission date, consistent with DOE's regulations (10 CFR Part 765)
    implementing EPACT Title X.
        Question. Based upon currently available funds, as well as funds
    requested in the fiscal year 2004 budget, when will these claims be
    fully paid? Based upon its projection of when current claims will be
    fully paid, how much time will have elapsed from the time that the
    claims were filed until the claims are fully paid?
        Answer. As stated in the previous answer, there is an outstanding
    balance of $78.5 million in approved claims. Based upon the fiscal year
    2004 budget request of $51 million, this outstanding balance would not
    be fully paid until fiscal year 2005. The elapsed time from submission
    of these claims until payment in full of all the claims would be about
    3 years.
        Question. What is DOE's projection of the amounts of new claims it
    expects to receive in fiscal year 2003? In fiscal year 2004? In fiscal
    year 2005? In fiscal year 2006?
        Answer. The following estimates are based on information provided
    by the licensees who are eligible for reimbursement under the Title X
    program. The amounts are the Federal government's share that would be
    eligible for reimbursement assuming the claims are approved in full.
    Approximately $20 million of the total claims submitted over this 4
    year period would be for amounts that exceed the per dry short ton
    reimbursement limit for uranium licensees; i.e., they would not be
    eligible for immediate reimbursement in accordance with EPACT Title X,
    as amended. However, these amounts would be eligible for reimbursement
    after fiscal year 2008, if the Secretary makes a determination at that
    time that there is sufficient authority under EPACT Title X, as
    amended, to reimburse those amounts.
        Fiscal year 2003.--$38 million ($7 million exceeds dry short ton
    reimbursement limit).
        Fiscal year 2004.--$36 million ($6 million exceeds dry short ton
    reimbursement limit).
        Fiscal year 2005.--$35 million ($6 million exceeds dry short ton
    reimbursement limit).
        Fiscal year 2006.--$33 million ($1 million exceeds dry short ton
    reimbursement limit).
        Question. What is DOE's current budget estimate for reimbursement
    of Title X claims in fiscal year 2004? Fiscal year 2005? Fiscal year
    2006?
        Answer. As you know, we have requested $51 million for fiscal year
    2004. For fiscal year 2005 and fiscal year 2006, the Department plans
    to request funding to meet our Title X obligations in a timely manner
    based on the estimates provided by the licensees who are eligible for
    reimbursement.
        Question. Assuming (conservatively) that all claims are approved as
    submitted, what is the level of shortfalls in the DOE budget estimates
    to meet these claims? Under these projections, what would be the
    balance of unpaid claims at the end of fiscal year 2006?
        Answer. As of May 7, 2003, the total outstanding balance of
    approved claims that are eligible for reimbursement pending future
    appropriation of funds is $78.5 million. Approximately $38 million in
    new claims were submitted by May 1, 2003. Assuming that all claims are
    approved as submitted, the balance of unpaid claims at the end of
    fiscal year 2004 would be $61 million--a reduction of $18 million
    relative to the fiscal year 2003 balance. The Department anticipates
    annual reductions to the unpaid balances at a similar level through
    fiscal year 2006.
        Question. Based upon DOE's current projections, what would be the
    average length of time from the time that new claims are submitted
    until they are fully paid?
        Answer. Based on DOE's current assessment, it would take an average
    of about 2 years before submitted claims are fully paid.
        Question. What is DOE's rationale for the long delays in making
    payments after approved and audited claim have been made?
        Answer. After the claims have been audited and approved, the timing
    of the actual reimbursements is subject to the availability of
    appropriations for this purpose. Consistent with Title X of the Energy
    Policy Act of 1992, we have made annual payments to the licensees. In
    accordance with the Department's Title X regulations (10 CFR Part 765),
    and subject to the availability of appropriations for this purpose, we
    have made reimbursements within 1 year of claim submission. When
    circumstances have allowed, we have made more than one payment in some
    years and have accelerated payment of outstanding claims when possible.
    For example, when Congress provided supplemental appropriations for
    Title X several years ago, outstanding claims were promptly paid
    consistent with those appropriations. Last August, when Congress
    increased the reimbursement authority for the thorium licensee, all
    outstanding claims to the uranium licensees had been paid; and in
    September, we paid all remaining fiscal year 2002 Title X funds to the
    thorium licensee to reimburse a portion of its previously approved
    claims. Because the backlog of unpaid claims currently exceeds the
    requested fiscal year 2004 appropriation, we will consider making
    payments for the currently approved claims immediately following the
    receipt of the fiscal year 2004 appropriation, as we did on one other
    occasion when appropriations had not kept pace with approved claims.
        The Federal Government has a legal obligation to pay its share of
    the costs of remediation of Title X sites, just as the government has a
    legal obligation to reimburse its contractors for the costs of
    remediating contamination at the government's own facilities.
        Question. Why should the reimbursement of the government's share of
    the costs at Title X sites be subject to delays relative to the
    reimbursement of the government's own contractors?
        Answer. DOE's relationship to the Title X licensees is not
    comparable to the relationship between DOE and its contractors. DOE's
    contractors conduct work only at DOE's direction. By contrast, the
    Department does not have contracts with the Title X licensees and
    therefore cannot control the rate of reimbursable costs being incurred
    at licensee's sites.
        The reimbursement of the Federal Government's share of approved
    costs at Title X sites is subject only to annual appropriations for
    this specific purpose. The current and projected backlog of
    reimbursements is the result of the increased reimbursement authority
    for the thorium licensee, which increases the projected remaining
    liability of the Title X program from about $80 million to about $280
    million. When the fiscal year 2003 budget request was submitted, the
    then-existing reimbursement authority for the thorium licensee had been
    exhausted. Carryover funds and the $1 million fiscal year 2003 request
    were more than adequate to fully reimburse the uranium licensee claims
    submitted in 2002. The $225 million increase in thorium authority was
    enacted on August 21, 2002, well after submission of the fiscal year
    2003 budget request. Prior to this increase in authority, our planning
    projections indicated we would need less than $15 million per year over
    the next 4 fiscal years to keep current with our payments.
        Question. Would it be equitable of the Congress to consider
    applying the same standards for its own contractors, such as the Prompt
    Pay Act requirements; penalty and damage provisions in the Federal
    Acquisition Regulation and the Department of Energy Acquisition
    Regulation, to Title X reimbursements?
        Answer. There is no contractual relationship between the licensees
    and the Department for the cleanup of their sites, and therefore it
    would be inappropriate to apply the standards and provisions that you
    refer to. The Department has a legal obligation to reimburse the Title
    X licensees for the Federal Government's share of their cleanup costs.
    However, the Department's ability to pay these costs is limited by the
    amounts appropriated annually for this purpose. In fact, within the
    limits of its appropriations, the Department has reimbursed licensees
    at least annually as required by law, and we have reimbursed licensees
    at least partially within 1 year or less after claim submittals,
    consistent with the availability of appropriations and our Title X
    regulations.
                       privately funded technology for em
        Question. Ms. Roberson, I am aware that at least one company has
    put up its own money to develop an innovative waste treatment and
    separation technology that, if it works, could substantially reduce the
    costs of tank cleanup at Hanford and at other sites. I also noted that
    the President's fiscal year 2004 budget includes a commitment that DOE
    will share part of the savings from the deployment of innovative
    cleanup technology as an inducement to encourage contractors to take
    the financial risk to develop breakthrough technologies.
        What is the Department doing to encourage such private sector
    solutions?
        Answer. One of the major recommendations of the Top-to-Bottom
    Review was improving the Department's contracting process with private
    sector entities, which may yield the single best opportunity for
    enhancing the economy and efficiency of the Environmental Management
    cleanup operations. The Top-to-Bottom Review team construed the
    acquisition function in a broad manner to include how the EM program
    can provide incentives for or entice best-in-class contractors to
    submit proposals in response to solicitations and how EM can
    effectively access private sector companies that have not traditionally
    submitted proposals to conduct EM work.
        In implementing this recommendation, EM has chartered a special
    contracting team to aggressively pursue new and improved contract
    models to accelerate cleanup of our sites. We are currently challenging
    our site contractors, through re-alignment and restructuring of their
    contracts, to both seek out and deploy the best technology solutions to
    our cleanup problems and to develop and proffer new business approaches
    to accelerate cleanup. Where it makes good technical and business
    sense, we will offer substantial incentives to a private sector company
    to solve a cleanup problem through deployment of a technology that has
    its roots entirely in a private sector investment.
        Question. Would it be possible to put in place contracting
    mechanisms that would permit and reward deployment of such privately-
    financed cleanup technologies?
        Answer. Consistent with laws and policies that ensure sound
    contracting and fiscal responsibility, the Department has wide latitude
    to implement contracts that would permit and reward deployment of
    privately financed cleanup technologies.
                                     ______

                  Questions Submitted by Senator Thad Cochran
        Question. In the fiscal year 2003 Omnibus Appropriations Conference
    Report, Congress once again directed DOE to continue to evaluate the
    Advanced Vitrification System (AVS) and proceed to demonstration by
    implementing the February 28, 2002 work plan. This direction makes
    clear that an integrated demonstration of that technology is needed to
    determine if the promise of lower costs and faster vitrification can be
    realized. What is the status of your efforts to evaluate and
    demonstrate the AVS technology?
        Answer. As you may be aware, the DOE Office of Inspector General
    issued a report on the Advanced Vitrification System in August 2002,
    providing the following recommendations:
      --delay funding decisions on AVS until major uncertainties have been
            addressed;
      --develop specific, focused performance measures to more fully gauge
            progress in the evaluation and selection of an alternative or
            advanced vitrification technology; and
      --address all technical, programmatic, and financial challenges and
            uncertainties identified in previous studies during the
            upcoming business plan evaluation.
        I have agreed with these recommendations and developed an Action
    Plan, which describes an approach to evaluate and develop
    immobilization alternatives for treating high-level waste (HLW) at
    Hanford. We will evaluate the technical and financial merits of AVS and
    other alternatives recommended by a recent technical panel. Those
    alternatives include an advanced Cold Crucible Melter and an Advanced
    Joule Heated melter. As part of the evaluation, questions regarding
    technical details of the AVS were provided to the Radioactive Isolation
    Consortium (RIC). Representatives from the RIC provided the Department
    with responses to the questions and participated in a review which was
    held on February 24-28, 2003, in Richland, Washington. The two review
    teams (technical and financial) are currently drafting their reports
    and will submit them to a DOE technical working group (TWG).
        The TWG has the responsibility of reviewing the reports and making
    a recommendation to me for future research and development of
    immobilization alternatives to treat HLW. A decision is currently
    planned for June 2003. The Department has extended the period of
    performance and associated funding to the Radioactive Isolation
    Consortium through the end of June 2003 to support this schedule.
        Question. How soon can the work plan for AVS be implemented to
    demonstrate whether its potential may be realized and does your
    department have sufficient funding to begin implementation of this work
    plan?
        Answer. The Department is currently evaluating whether or not the
    Advanced Vitrification System is plausible for use to treat high-level
    waste at Hanford. If a decision is made by the Department to pursue
    additional evaluation of the Radioactive Isolation Consortium's AVS,
    the draft work plan provided to the Department in February 2002 will be
    used to initiate development of the work scope and funding would be
    available. A decision is currently planned for June 2003.
                                     ______

                 Questions Submitted by Senator Mitch McConnell
        Question. As I have noted in the past, I strongly support efforts
    by the Department of Energy and the Kentucky Natural Resources and
    Environmental Protection Cabinet to develop and implement an
    accelerated cleanup plan for the Paducah Gaseous Diffusion Plant. Like
    you, I am disappointed that the Department and the State have not yet
    been able to reach such an agreement.
        Can you provide me with a brief update on the status of your
    negotiations with the commonwealth of Kentucky to reach an agreement on
    a site performance management plan for the Paducah facility?
        Answer. The Department recently reached an agreement with the
    regulators on new cleanup milestones for the next 3 years. This
    negotiated resolution, while not accelerating cleanup at the site, does
    clear the way for the development of an updated Paducah site management
    plan (SMP), which serves as the blueprint for cleanup activities for
    the next 3 years.
        The three parties also agreed to conduct good faith negotiations to
    develop a complete scope of work for the Paducah cleanup by September
    15, 2003. I cannot commit at this time as to if, or when, a Performance
    Management Plan, as that term is used in Section 315 of Division D,
    Title III of the Consolidated Appropriations Resolution, 2003, will be
    developed.
        Question. What do you see as the major obstacles to reaching an
    agreement?
        Answer. The most significant obstacle to reaching an agreement
    remains the difference of opinion as to the degree and nature of the
    required cleanup beyond those actions to which we are already
    committed. In addition, the Department and the Kentucky Natural
    Resources and Environmental Protection Cabinet are working to resolve
    several notices of violation at the facility, issued previously by the
    Commonwealth.
        While I continue to hope for an accelerated cleanup agreement for
    the Paducah site soon, Section 315 of the Energy & Water title of the
    Omnibus clearly outlines the fiscal year 2003 funding for sites that
    have not implemented site performance management plans with the
    Department of Energy. Specifically, the language limits the funding for
    those sites to either ``the comparable current year level of funding,
    or the amount of the fiscal year 2003 budget request, whichever is
    greater.''
        Question. Can you tell me if the Department has determined which of
    those amounts--the fiscal year 2002 level of funding or DOE's fiscal
    year 2003 request--is the greater amount for the Paducah site?
        Answer. The Department has determined that the greater amount is
    the fiscal year 2002 funding level as appropriated and adjusted, that
    is $125,315,000.
        Question. Does the Department intend to provide the greater of
    these two amounts for cleanup activities at Paducah, as specified by
    Section 315?
        Answer. We have provided Paducah with $110,884,000, which supports
    the limited number of acceleration activities to which the Department
    and the site regulators have agreed. Since we do not have an
    integrated, long-range acceleration plan for Paducah, as reflected in a
    performance management plan and agreed to with the regulators, and do
    not expect to have one this fiscal year (2003), we do not anticipate
    providing any additional funds for cleanup activities.
                                     ______

                Questions Submitted by Senator Robert F. Bennett
        Question. What is the present status of the Moab Tailings Project
    EIS and what is the expected timeline for completion?
        Answer. An Environmental Impact Statement is currently being
    developed to assess impacts from the following remediation scenarios:
    cap the tailings in place at their present location, relocate the
    tailings to the existing U.S. Nuclear Regulatory Commission-licensed
    White Mesa Mill facility near Blanding, Utah, or relocate the tailings
    to one of two sites, Klondike Flats or Crescent Junction, to be
    developed on Bureau of Land Management land north of Moab.
        Public scoping meetings were conducted during January 2003 in the
    communities potentially affected by the remediation scenarios being
    considered. The Draft EIS is scheduled for public release in January
    2004. Following a 45-day public comment period on the Draft, the Final
    EIS is scheduled to be available to the public in August 2004.
        Question. What remediation work, if any, can be completed with the
    level of funding provided under the Administration's request?
        Answer. At the requested funding level of $2 million, no
    remediation work will be performed. At the request level, the
    environmental impact statement will be completed on schedule and
    interim groundwater actions, tailings pile dewatering, and erosion and
    dust control will be continued at their current level.
        Question. If additional funds beyond the Administration's request
    are appropriated, what remediation efforts might be undertaken and what
    would be the most immediate priorities?
        Answer. The requested funding level of $2 million includes all
    activities planned for the Moab site in fiscal year 2004. The planned
    activities are development of the draft Environmental Impact Statement,
    which will incorporate recommendations of the National Academy of
    Science Report on Moab to be completed in January 2004, and the final
    EIS is expected to be issued in August 2004. In addition, funding for
    interim groundwater action, pile dewatering, and erosion and dust
    control is provided.
        Question. What is the status of any present efforts at site
    remediation, including the operation and maintenance of the interim
    ground water pump and treatment system?
        Answer. DOE will install the Interim Ground Water Corrective Action
    by September 30, 2003. This action is a series of groundwater
    extraction wells and a lined evaporation pond constructed on top of the
    tailings pile. The extraction wells will allow for removal of
    groundwater with the highest concentrations of ammonia. In addition,
    DOE has completed the removal of contaminated soils from the U.S.
    Highway 191 right-of-way adjacent to the DOE site. This removal allows
    the Utah Department of Transportation workers to work in a clean area
    during the Highway 191 widening project, which is planned for Summer
    2003.
        DOE will continue ongoing maintenance at the site, including
    operating the tailings pile dewatering system, applying dust control
    surfactant, and filling erosion rills that form on the pile.
                                     ______

                  Questions Submitted by Senator Patty Murray
        Question. Ms. Roberson, I am very concerned about the delay in
    awarding the River Corridor Closure contract, and the rumored reasons
    for this delay. Delay will only hurt the efforts to accelerate cleanup
    at the site. I have heard the reason for the delay may involve the
    Administration's intention to remove the current requirement that the
    successful contractor commit to become a signatory to the Site
    Stabilization Agreement. If these disturbing reports are true, the
    negative consequences to the Hanford Site and to the Tri-Cities
    community would be substantial--including labor unrest that such a
    policy reversal will cause across the site and not just affecting this
    important closure contract.
        I would like to know if this contract award is being delayed, and
    if the Administration does intend to remove the Site Stabilization
    Agreement requirement contained in the request for proposals and
    contract terms?
        Answer. The River Corridor Contract was awarded on April 25, 2003.
    Shortly before that, on April 22, Secretary Abraham granted an
    exemption from the requirements of Executive Order 13202 for
    construction work covered by this procurement, determining that the
    River Corridor project satisfies the requirements of section 5(c) of
    the Order. This provision provides that an exemption may be granted for
    a project where an agency has issued ``bid specifications'' containing
    a requirement to abide by a project labor agreement and one or more
    construction contracts subject to such a requirement have been awarded
    as of the date of the Order.
        Question. Ms. Roberson, for fiscal year 2003, the final conference
    agreement imposed general reductions which will require decreases in
    your cleanup budget.
        Can I have your assurance that these general reductions will be
    allocated in a manner to minimize disruption to priority projects, such
    as the tank cleanup effort at Hanford, and will not be applied
    disproportionately to any particular program?
        Answer. The final fiscal year 2003 Environmental Management
    Consolidated Appropriation, Public Law 108-7, imposed general
    reductions totaling $118,058,000. These reductions were applied against
    the Defense Environmental Restoration and Waste Management, Non-Defense
    Environmental Management, and Uranium Facilities Maintenance and
    Remediation appropriations. Prior year balances totaling $5,546,276
    were available to partially offset these general reductions. The
    remaining $112,511,724 was applied proportionately against each
    program, project or activity as directed by specific language contained
    in the fiscal year 2003 Consolidated Appropriation Conference Report,
    H.R. 108-10. The exception to this approach was the $25,000,000 general
    reduction applied to the Uranium Facilities Maintenance and Remediation
    appropriation. Within this appropriation, $340,329,000 was specified in
    law for the Uranium Enrichment Decontamination and Decommissioning Fund
    account. Accordingly, the $25,000,000 reduction was applied only to the
    Other Uranium Activities account within the Uranium Facilities
    Maintenance and Remediation appropriation.
        Question. Ms. Roberson, for almost four decades, the Hanford
    Environmental Health Foundation (HEHF), a community-based non-profit
    organization, has provided quality occupational health services to
    workers at the Hanford site. I understand HEHF has broad support from
    the community and organized labor at Hanford.
        What is the status of efforts to ensure that workers at Hanford
    continue to receive excellent occupational health services?
        Answer. DOE is committed to providing excellent occupational
    medical services to the Hanford workforce. The current contract with
    the Hanford Environmental Health Foundation expires at the end of
    fiscal year 2003, with no extensions available. In March, DOE issued a
    Request for Proposals for a new occupational medical services contract.
    Contractor proposals are due on May 23, 2003. We expect to make an
    award and transition to the new contract by the end of the current
    contract. The new contract will require the same high quality of
    occupational health services that currently exist at Hanford. These
    services include long-term health legacy activities, first aid,
    employee assistance, emergency preparedness support, fitness for duty,
    medical monitoring exams, and prevention/mitigation activities.
        Question. Ms. Roberson, as you know, the HAMMER Training Center
    provides for Hanford workers with excellent training for their jobs. I
    have been told this has led to one of the best safety records across
    the country. I am disappointed that the EM budget again fails to fund
    HAMMER directly. I am further disappointed that there is no direct
    proposal by the Administration for how to transfer HAMMER to another
    part of DOE or another agency. I would like to work with you to protect
    worker training and the value of HAMMER.
        To do so, I would like to know if DOE now has any plans for the
    transfer of HAMMER to another entity?
        Answer. At the present time, DOE has no plans to transfer HAMMER.
        Question. I would also like to know how EM plans to maintain the
    training of Hanford workers at HAMMER if the program is not the direct
    manager of the facility?
        Answer. EM will continue to be a customer of HAMMER along with
    other DOE and non-DOE organizations. We foresee HAMMER as an available
    resource that the EM program may draw upon in support of the cleanup
    mission.
        Question. Ms. Roberson, assuming funds are provided by Congress, do
    you support the activities of the Atomic Heritage Foundation's
    Manhattan Preservation Project which would preserve historically
    significant facilities such as Hanford's B-Reactor and T Plant so
    future generations could visit them?
        Answer. I do not support using Environmental Management cleanup
    funds for this purpose. However, assuming funds are provided by
    Congress to maintain and operate historic properties, DOE supports the
    goals of preserving significant historic facilities, such as Hanford's
    B-Reactor for the enjoyment and education of current and future
    generations.
        Question. Ms. Roberson, in 1994, the Hanford Joint Council was
    created. In its 9-year history, a 100 percent success rate of resolving
    over 40 highly contentious whistleblower cases. It is felt that this
    board saved millions of dollars in attorney fees that would have been
    paid out to fight these claims in court. More importantly, the Council
    resolved the underlying safety issue brought up by the whistleblower. I
    have learned that the Department of Energy dissolved this Council a few
    weeks ago. The question is: why? The Joint Council cost the DOE about
    $400,000 per year.
        Could you please explain the logic behind doing away with the
    Hanford Joint Council?
        Answer. The Hanford Joint Council was a subcontractor to Fluor
    Hanford Inc. (FHI). The Joint Council was established for an initial
    period of 5 years, beginning October 1994. In July 1997, the charter
    was revised and the scope of the Joint Council was established to
    investigate and seek full and fair resolution of significant concerns
    involving health, safety, quality and environmental protection issues
    using an alternative mediation approach. From 1994 to 1997, there was a
    significant backlog of safety, health and environmental concerns. The
    backlog was due to a lack of confidence and trust in the Hanford
    contractor's employee concerns programs. The Department saw a need to
    establish an independent party to assist in the resolution of the
    concerns/backlog. During this time, the Joint Council was established
    and played a major role in the resolution of employee concerns.
        Today, FHI has implemented a number of safety programs (Voluntary
    Protection Program, President Zero Accident Council, Employee Zero
    Accident Council, Hanford Atomic Trades Council Safety Representatives)
    where contractor management and workers meet in an open forum to
    discuss safety issues at the Hanford Site. In addition to the safety
    programs, FHI has also enhanced their internal Alternative Dispute
    Resolution Program (ADR) for resolving employee concerns.
        Due to the implementation of the safety programs and the ADR
    process identified above, FHI has seen a significant decrease in
    anonymous concerns each year and is confident that safety concerns can
    be raised without fear of reprisal. FHI has demonstrated that it has
    programs in place that are adequately resolving concerns and are
    continuing to improve the effectiveness of the Employee Concerns
    Program.
        Question. Ms. Roberson, I have been told that some workers at the
    high-level nuclear waste tank farm area of Hanford have been
    complaining of becoming ill after exposure to toxic vapors that escape
    from the tanks.
        I would like to understand how many workers have sought medical
    treatment evaluation in the last 18 months from these exposures and
    what the Department is doing to investigate the cause of the exposures?
        Answer. There have been 29 requests for medical evaluation from
    workers who reported smelling vapors in the tank farms over the last 18
    months. All workers who reported smelling odors in the tank farms were
    encouraged to seek medical attention and those who reported an actual
    symptom, such as headache or nausea, were required to seek medical
    attention. The medical evaluations determined that none of these cases
    required medical treatment. The Contractor's Industrial Health and
    Safety Program has implemented a number of appropriate and conservative
    features to protect workers from exposures to high concentrations of
    vapors, primarily consisting of ammonia and volatile organics.
        First, a number of engineered controls are in place, consisting
    primarily of sealing the known vapor leak paths such as around the tank
    pit covers, valve covers and other structures. Second, administrative
    controls are employed that include real time monitoring for vapors and
    establishment of physical barriers to prevent workers from walking into
    areas that may contain high vapor concentrations. Finally, industrial
    hygiene technicians monitor the work areas in the tank farms to insure
    that workers in and around the tanks are not exposed to high vapor
    concentrations. This entails workplace monitoring using state-of-the-
    art hand-held (which can measure in parts per billion) and fixed
    monitoring equipment. Additionally, our contractor has established
    administrative operating limits for vapor exposures that are below
    national consensus standards and guidelines to provide additional
    protection and assurance. For example, the most conservative limit for
    ammonia exposure is 35 ppm for a 15-minute exposure; our contractor has
    established that limit at 25 ppm for any exposure duration. The
    Occupational Safety and Health Administration (OSHA) sets that limit at
    50 ppm for an 8-hour exposure.
        Additionally, external evaluations have been conducted to review
    practices and make recommendations for improvements as appropriate. The
    contractor has formed a team of employees, led by a bargaining unit
    safety representative, to evaluate concerns and provide an improved
    mechanism for communication with the workforce. We also have expanded
    and upgraded our communication with the workforce on hazards in the
    workplace and the appropriate controls when working in areas where
    vapors may potentially exist. In addition, the required annual
    Hazardous Waste Operations and Emergency Response training was upgraded
    to focus on tank vapor hazards. Workers are regularly encouraged to
    raise issues and concerns in a variety of different venues.
        Workers also may request additional protective equipment in
    accordance with OSHA regulations. The worker will be provided the
    appropriate protective equipment based on an integrated analysis of all
    the hazards associated with the work. The Department is actively
    engaged with the contractor to continue to address these concerns and
    assure a safe workplace and a well-informed workforce.
        Finally, the Hanford Environmental Health Foundation conducted a 7-
    month study of the medical records of over 800 Hanford Tank Farm
    workers and has found nothing that would indicate that these workers
    have suffered any adverse health effects from exposure to tank farm
    vapors.
        Question. Ms. Roberson, Washington State's Department of Ecology
    and the U.S. EPA recently sent a letter to the DOE calling for Hanford
    to end its practice of using unlined burial pits to dispose of
    radioactive materials.
        What is the Department's response to the notion that Hanford ought
    to be utilizing state-of-the-art burial techniques that include pit
    liners, leachate collection and groundwater monitoring in connection
    with these burial grounds?
        Answer. The current disposal practice of using unlined facilities
    complies with applicable laws and regulations and is the accepted
    practice both within DOE and commercially (Barnwell in South Carolina
    and U.S. Ecology in Washington). DOE is evaluating a more robust burial
    system to increase the margin of safety for the facility in terms of
    human health and the environment. This style of disposal system,
    analogous to a Resource Conservation and Recovery Act of 1976 disposal
    system, is evaluated in the revised draft Hanford Solid Waste
    Environmental Impact Statement that is currently issued for public
    comment.
        Question. Ms. Roberson, if DOE decides to proceed with lined burial
    pits, how much longer will unlined burial pits be used?
        Answer. For certain waste streams, such as the Submarine and
    Cruiser Reactor Compartments, as well as some other higher activity
    waste, there is no health or safety reason to change the current
    disposal practices of using unlined burial trenches.
        However, for other low-level and mixed low-level wastes, we are
    evaluating the use of other disposal methodologies, including lined
    trenches, in the revised draft Hanford Site Solid Waste Environmental
    Impact Statement. We anticipate the new disposal method, as selected in
    the subsequent Record of Decision, could be available by fiscal year
    2007.
        Question. Ms. Roberson, last year, the U.S. EPA released a report
    on the Columbia River Fish Toxics Inventory, detailing the health risk
    to people who consume fish from the Columbia River, based upon tissue
    analysis of the fish. According to the report, some groups such as
    Native American tribes, have a 1 in 50 chance of contracting a fatal
    cancer from lifetime consumption of this fish.
        Has DOE conducted, or is DOE planning to conduct, any studies to
    analyze the source of this contamination and how its release can be
    stopped?
        Answer. The Department has reviewed the above referenced report as
    have other interested parties. These are not Hanford-derived
    contaminants. They are primarily derived from agricultural, mining and
    industrial sources throughout the Columbia River system. There was some
    initial confusion when the report came out regarding the source of the
    contaminants in the fish that were studied. Because the report
    discussed (among other things) fish that were caught in the Hanford
    Reach, some readers assumed the contaminants were from the Hanford
    Site. A careful reading of the report, however, indicates otherwise.
    The contaminants identified in the fish are heavy metals, pesticides,
    polychlorinated biphenyls (PCBs), etc. The only connection with the
    Hanford Site is that some of the fish were caught in the vicinity of
    the Hanford Reach. The Columbia River in the Hanford Reach is a Class A
    river and any Hanford-related contaminants (as measured just downstream
    of the Hanford Site) are several orders of magnitude below the ambient
    water quality standards. That being said, the Hanford Site is actively
    working to remediate and minimize any potential impact from the
    migration of contaminated groundwater into the Columbia River at the
    localized plume areas along the Hanford Reach.
        Question. Ms. Roberson, last October, the Department publicly
    announced that it would close 40 of the high-level nuclear waste tanks
    at the Hanford site by 2006. However, there is no agreement with
    regulators about the definition of a ``closed'' tank nor has there been
    any public discussion of this issue. This has led to serious concern
    among regulators and the public that the Department is moving forward
    without the proper notice and approval.
        How do you intend to get the Department and its regulators and the
    public in agreement on this issue?
        Answer. The Department is striving to accelerate risk reduction by
    closing tanks in compliance with regulatory requirements. The Tri-Party
    Agreement (TPA) provides a framework for developing the tank closure
    process with the State of Washington's Department of Ecology (Ecology)
    and the U.S. Environmental Protection Agency. The Office of River
    Protection (ORP) is currently drafting a proposed change to the TPA
    which addresses requirements for retrieval and closure of Hanford Site
    single-shell tanks, establishes single-shell tank retrieval and closure
    demonstrations, and associated regulatory process documentation
    requirements. The single-shell tank system closure activities are
    dependent upon successful modification of regulatory documents through
    the addition of the Single-Shell Tank System Closure Plan. This plan
    would go through the required regulatory process which includes public
    review and comment.
        Question. Ms. Roberson, last year, the U.S. EPA released a report
    on the Columbia River Fish Toxics Inventory, detailing the health risk
    to people who consume fish from the Columbia River, based upon tissue
    analysis of the fish. According to the report, some groups such as
    Native American tribes, have a 1 in 50 chance of contracting a fatal
    cancer from lifetime consumption of this fish.
        Ms. Roberson, can you tell me how many claims have been filed under
    Subtitle D of the Energy Employees Occupational Illness Compensation
    Program Act of 2000 at Hanford?
        Answer. As of June 4, 2003, the Department of Energy's Office of
    Worker Advocacy had received 1,637 Hanford applications for assistance
    under Subtitle D of the Energy Employees Occupational Illness
    Compensation Program Act (EEOICPA). Of these, 722 cases have been
    reviewed.
        Question. Further, can you tell me how many of these claims at
    Hanford have been decided under the DOE Physicians' Panel?
        Answer. As of June 4, 2003, 28 Hanford cases have been sent to the
    Physician Panels, of which seven decisions have been issued.
        Question. How many have been paid?
        Answer. It is too early in the process for any EEOICPA Subtitle D
    claims to have been paid. This will be done only when claimants have
    completed the State workers' compensation claims process, a process
    that is outside of DOE's control. It is important to point out that DOE
    does not pay claims; however, under the provisions of Executive Order
    13179, DOE is required to report to Congress on the number of claims
    paid, and we are setting up procedures in order to carry out that
    responsibility.
        Question. Ms. Roberson, earlier this year, the Department published
    a proposed Environmental Impact Statement for Hanford that was focused
    on a variety of new technologies for treating low-activity waste. This
    was followed by a series of public meetings where DOE committed that:
    a) additional views would be carefully considered; and b) there would
    be plenty of opportunity for change to the proposed EIS. I'm concerned
    that, in contradiction to those commitments, the interests of my State
    are being ignored by the DOE. Proper and timely treatment of low-
    activity waste is important. But there may be even more important
    opportunities to reduce waste volumes, costs, and schedules in the
    high-level waste stream that are not even being considered by the DOE.
    Governor Gary Locke wrote to express these concerns and my
    understanding is that, not only hasn't he received a substantial
    response, but also there have been informal indications that his
    concerns will be ignored by DOE in the next round of the EIS process.
    The residents of my State recognize that minimizing the cost of
    effective Hanford waste clean-up is critical to ensuring that there is
    enough funding to do the job right. It's impossible to make good
    judgments about potential technologies that should be included in the
    EIS without a thorough evaluation of the ``life-cycle'' costs
    (including temporary waste storage, transportation, and long-term
    disposal) for various high-level and low-activity waste technologies.
    This point was also addressed in the Governor's response to the initial
    EIS draft. I too would like to know specifically how DOE plans to
    address the prospect for high-level waste technologies and the life-
    cycle costs of various technologies before our Subcommittee considers
    the fiscal year 2004 appropriations request. I'd be grateful for your
    response at the earliest possible date.
        Answer. The Department remains committed to vitrifying all of the
    high-level waste present in the Hanford tank system. We anticipate that
    only about 10 percent of the total volume of tank waste will ultimately
    be classified as high-level. We have modified the Waste Treatment Plant
    contract to add an additional high-level waste melter to assure
    successful and timely processing of this material containing over 90
    percent of the radioactive hazard. This portion of the waste will be
    disposed of in a geologic repository.
        Approximately 90 percent of the volume of waste in the tanks is
    low-activity waste. Two low-activity waste melters in the Waste
    Treatment Plant will allow us to vitrify a great deal of this waste. In
    order to further optimize completion of tank waste treatment and
    control the life-cycle cost of the project, the Department is
    evaluating technologies that could be used to immobilize that portion
    of the low-activity waste not ideally suited for vitrification in the
    Waste Treatment Plant. At this time, the Department is making a nominal
    investment in these technologies; approximately $6 million will be
    invested in fiscal year 2004. The Office of River Protection (ORP) is
    planning to complete technology selection by December 2003, and, if
    appropriate, begin system design in late fiscal year 2004. Life-cycle
    costs, including temporary waste storage, transportation, and long-term
    disposal, will be considered during the technology selection process in
    late 2003. The Washington State Department of Ecology was involved in
    the identification of the candidate technologies and all comments
    received were considered in scoping the Environmental Impact Statement
    (EIS). Preliminary life-cycle cost estimates are complete and more
    refined estimates will be made as test and design data become
    available. With regard to the proposed EIS for Retrieval, Treatment,
    and Disposal of Tank Waste and Closure of Single-Shell Tanks at the
    Hanford Site, the Department is evaluating several conservative cases
    that will bound the environmental impacts that may result from
    implementation of the supplemental treatment technologies. ORP has
    completed public comment on the proposed scope of the EIS, and a Draft
    EIS will be available for public comment in September 2003.
        Question. Ms. Roberson, in 2001 DOE's Office of Inspector General
    released a report regarding DOE's land holdings within the boundaries
    of the Hanford Reach National Monument in Washington State. The report
    recommended the transfer of these lands to the U.S. Fish and Wildlife
    Service as early as 2004. Such a transfer could challenge DOE's fiscal
    responsibilities as set forth in an agreement between the agency and
    the local governments in 1996.
        I would like to know if this transfer is under consideration? If
    so, what is the status of the transfer, has DOE established a framework
    for implementation (including land surveys, agreements with the
    Department of the Interior, certification of waste removal, transfer
    liabilities, etc.), and how does DOE intend to fulfill the outstanding
    payment obligations as set forth in the 1996 agreement?
        Answer. In response to the DOE Office of Inspector General report,
    DOE committed to pursue a phased transfer of approximately 265 square
    miles of the Hanford Site that is included in the Hanford Reach
    National Monument. The two phases correspond to completing certain
    environmental cleanup activities at Hanford that would significantly
    reduce the risk to the areas proposed for transfer. We have been
    working with the various elements of the U.S. Department of the
    Interior to define the specific legal processes to be used and the
    various specific activities that would have to be completed such as
    land surveys, etc., to complete the potential transfer. This work has
    not been finalized. The target date for the first part to be
    potentially transferred to the U.S. Fish and Wildlife Service, the
    Fitzner/Eberhardt Arid Lands Ecology Reserve, is approximately
    September 2004. The target date for the second phase, involving the
    ``Riverlands,'' McGee Ranch and North/Wahluke Slope, is September 2005.
        DOE policies allow for discretionary payments in lieu of taxes
    (PILT). The 1996 agreement to which you referred states that if there
    is ``a change in the amount of property in Benton County under the
    Department's control, Benton County shall identify and explain those
    changes in its certification and, upon approval from the Department
    which will be forthcoming within 60 days of receipt of certification,
    payment will be made based upon that certification. The related PILT
    intergovernmental agreements between DOE and Grant County, and between
    DOE and Franklin County, specifically recognize that DOE's PILT
    ``Payment and any future assistance payments under section 168 of the
    [Atomic Energy] Act are not entitlements.''
        DOE's discretionary authority under section 168 is limited to
    ``those States and localities in which the activities of the Commission
    are carried on, and in which the Commission has acquired property
    previously subject to State and local taxation . . .'' Within the
    limits of that statutory authority, DOE intends to fulfill its
    obligations under the agreements referenced above.
                                     ______

        Questions Submitted to the Office of Civilian Radioactive Waste
                                   Management
                Questions Submitted by Senator Pete V. Domenici
                          yucca mountain funding level
        Question. Dr. Chu, You noted in your testimony that the fiscal year
    2003 funding level is a $131 million reduction from the President's
    request. I've previously heard the Secretary note that this funding
    shortfall introduces a ``high risk'' with regard to DOE's ability to
    meet the goal of a December 2004 license application date. What
    additional funding will be required in this fiscal year to keep all
    critical elements of the program on schedule for the 2010 target
    opening date?
        Answer. The targeted 2010 opening date is premised on submitting a
    license application by the end of 2004, receiving construction
    authorization by the end of 2007, and receiving a license to receive
    and possess waste in 2010. At a minimum, the under-funding in fiscal
    year 2003 will make it more difficult to meet our goal of submitting a
    license application by the end of 2004, and will require deferral of
    work activities that are essential to beginning receipt in 2010. The
    reduced appropriations have resulted in a replan of the Program through
    submittal of the License Application (LA). The key impacts of this
    replan are: LA submittal in December, 2004, but at a higher technical
    risk; partial shut down of Yucca Mountain site and deferral of certain
    scientific tests; and, further deferral of transportation work
    supporting a 2010 waste receipt goal. Also, some workforce reduction
    associated with the reduced appropriations is unavoidable.
        Question. Will the Department be submitting a supplementary budget
    request for these resources?
        Answer. The Department is still evaluating its options for
    addressing the fiscal year 2003 funding shortfall. The Program's fiscal
    year 2003 appropriation was certainly below what we felt was a
    realistic level to stay on schedule for submitting a license
    application by the end of 2004. The shortfall has called into question
    our ability to accomplish all the pre-license application work in the
    time frame we have set. The Department has no plans at this time to
    submit a supplemental budget request for fiscal year 2003, but is
    considering options including a fiscal year 2004 budget amendment
    request.
                                 transportation
        Question. Dr. Chu, I understand that adequate funding is not only
    required for the license application, but also for other critical long-
    lead elements of your program. Judging from our experience with WIPP
    (Waste Isolation Pilot Plant), the transportation program will be
    difficult to construct and will require years to put into place. How
    much of your fiscal year 2003 budget is devoted to transportation?
        Answer. In an effort to maintain the December 2004 license
    application date, we have had to focus most of our resources in that
    area. As a result, a total of $5 million is allocated to
    transportation, $25 million less than requested in the Administration's
    request.
        Question. Do you believe that the program is starting soon enough
    on transportation issues to have the system ready for operation by your
    target date of 2010?
        Answer. Development of the transportation system requires an
    aggressive schedule to support the planned opening of the repository in
    2010. Shortfalls in funding are impacting that schedule and we are
    currently analyzing the longer term effects of the reduced funding on
    the schedule.
                            modes of transportation
        Question. Dr. Chu, from past debates on Yucca Mountain, it's clear
    that transportation issues will remain a major controversy. The mode of
    transportation will be one of the most controversial elements. I
    believe that DOE has stated that it favors a ``mostly rail'' program.
    Do you still favor primarily rail shipments?
        Answer. The Yucca Mountain Environmental Impact Statement (EIS)
    stated that the preferred mode of transportation is mostly rail;
    however, the Department has not made a final decision on mode (i.e.
    mostly rail or mostly truck).
        Question. When do you expect to issue a record of decision on
    preferred modes of transportation?
        Answer. The exact timing and content of any Record of Decision is
    under evaluation within the Department in conjunction with other
    aspects of transportation planning. The Department intends to issue a
    Transportation Strategic Plan later this year that will outline the
    timeframes for decisions needed to assure that transportation
    capability will be available to support the planned initiation of
    repository operations in 2010.
        Question. What are the critical elements in the path toward
    finalizing your waste acceptance and transportation systems?
        Answer. The critical transportation elements are development of the
    Nevada transportation infrastructure, initiating acquisition of
    transportation casks and supporting equipment, and maintaining the
    institutional program.
        Question. And what cost and risk can you estimate for each element?
        Answer. The largest risk involved with the development of the
    transportation system is in the area of the development of the Nevada
    component of the system. The development of equipment to ship wastes
    has little risk since many components are available in the commercial
    sector.
        The FEIS, released with the Yucca Mountain site recommendation,
    identified rail transportation as the preferred transportation mode. If
    the decision is made to ship by rail the development of a rail line
    would cost between $300 million and $1 billion depending upon which
    corridor is selected. The acquisition of transportation casks and
    supporting equipment will cost about $500 million.
        Question. If a rail shipment isn't in place by 2010, how many truck
    shipments will be required to replace the rail option?
        Answer. Approximately 250 truck shipments would be required to ship
    400 MTU in the first year of operation. The number of shipments would
    increase linearly as the waste acceptance rate increased.
        Question. If the Department starts with a truck shipment program
    and transitions to a rail program later, won't this lead to some
    unnecessary costs in the program?
        Answer. First, it is important to note that even under a rail
    shipment program, some shipment by truck is needed. Our goal is to
    minimize unnecessary costs, while at the same time maintaining the
    flexibility necessary for an optimum transportation campaign. The costs
    associated with a transition from truck to rail would depend on the
    length of time between the start of a truck shipment program and the
    start of a rail shipment program. If the time span were short,
    additional costs, if any, would be small. The longer the time span the
    more truck casks, beyond the number needed once rail shipment started,
    would have to be procured to meet the same acceptance rate. Such
    additional equipment investments would have little use once rail
    becomes operational.
                                 shipment casks
        Question. Dr. Chu, as you know some sites are placing waste today
    in NRC-licensed dual-purpose storage and transportation casks. I
    understand that sites are eager to have final guidance on the types of
    canisters and casks that will be acceptable at Yucca Mountain.
    Otherwise, sites may be doing work that simply must be repeated later.
    Will the initial operations of the repository accept NRC-licensed dual-
    purpose storage and transportation casks?
        Answer. The Department's position is that multi-assembly canistered
    spent fuel is not covered by the disposal contracts between the
    Department and the utilities, and thus is not considered an acceptable
    waste form, and absent a modification to these contracts, will not be
    accepted for delivery to the Yucca Mountain repository. The Department
    has stated its willingness to initiate the appropriate actions to
    include such systems under the terms of the disposal contracts, as part
    of an overall contract modification that would address other waste
    acceptance and scheduling issues.
        Question. Has the Department finalized acceptance criteria
    sufficiently to give adequate guidance to utilities, including the
    sites involved in decommissioning, which must move spent fuel to dry-
    storage right now?
        Answer. The current acceptance criteria were established and agreed
    upon by the Department and utilities in the standard contract. The
    Department is aware that subsequent to signing the standard contract,
    issues have emerged that may require modifications to the acceptance
    criteria and thus to the contracts. One such issue is the acceptance of
    canister systems some utilities are now using to move spent fuel to dry
    storage. Unfortunately, as a number of these issues are the subject of
    ongoing litigation in the U.S. Court of Federal Claims, the Department
    is limited in its ability to pursue discussion of finalized or updated
    waste acceptance criteria with utilities at this time.
                                     ______

                   Questions Submitted by Senator Harry Reid
                                 yucca mountain
        Question. I note that the GAO evaluated DOE's progress towards
    license application in December 2001 and estimated that it would take
    until early 2006 to resolve all outstanding Key Technical Issues (KTIs)
    to NRC's satisfaction. Since then only 70 of the 293 outstanding KTIs
    have been resolved, quality assurance is being questioned by NRC and
    GAO, and the Licensing Support Network is due to be submitted to NRC 6
    months ahead of the LA. Can you really suggest that the only obstacle
    to your progress and to your ability to meet the license application
    deadline of December 2004 is the failure of Congress to provide
    sufficient funding for your program?
        Answer. There are nine Key Technical Issues associated with
    repository development and operations at Yucca Mountain. Associated
    with the nine KTIs are 293 agreements. At the time of the Yucca
    Mountain site designation, NRC designated all 293 agreements as closed
    pending DOE's provision of additional information to NRC. Since that
    time, DOE has provided a portion of that information, and NRC has
    agreed that 78 of the 293 agreements are complete as of May 23, 2003.
    Despite significant budget shortfalls, DOE continues to develop the
    documentation and analyses to complete the remaining agreements. All
    agreements need to be addressed by defining a clear path to completion
    before License Application, but they do not necessarily need to be
    complete before LA.
        DOE has identified some quality assurance issues that must be
    successfully addressed. NRC and the GAO assessment that you referenced
    have recognized these issues. While sufficient funding is not the only
    obstacle to our program, it is the most critical obstacle to our
    ability to meet our program goals. Sufficient funding is required for
    detailed repository design, Licensing Support Network development, and
    other key elements of an acceptable LA.
                        transportation planning process
        Question. Given the amount of available funding in fiscal year
    2003, is it your intention to defer the transportation planning process
    in order to complete the LA by December 2004? What transportation
    related activities do you plan to complete in fiscal year 2003?
        Answer. Because of the reduced funding level it is necessary to
    defer most of the national transportation activities in an effort to
    hold to the December 2004 LA date. The Department does plan to issue
    its Transportation Strategic Plan later this year.
        Question. When do you expect to release a Transportation Strategic
    Plan and to what extent will you involve stakeholders in the
    development of that Plan?
        Answer. The Department intends to issue a Transportation Strategic
    Plan later this year. The Department expects to involve stakeholders in
    the process to develop the Plan. Their comments will be considered as
    the more detailed transportation planning documents are developed.
        Question. What plans do you have for involving stakeholders in the
    decision process for selection of a transportation mode, a rail
    corridor, a final repository design, and for other decisions yet to be
    made in regard to repository development?
        Answer. The Yucca Mountain Final Environmental Impact Statement
    stated: ``If, for example, mostly rail was selected, both nationally
    and in Nevada, DOE would then identify a preference for one of the rail
    corridors, in consultation with affected stakeholders, particularly,
    the state of Nevada.'' The Department is taking a careful and
    deliberative look at the potential resource impacts and other
    implications in making both the transportation mode decision and Nevada
    corridor decision. Decisions regarding transportation will be made
    after thorough consultations with stakeholders, including State and
    tribal representatives, as well as national and regional organizations
    that interact with the repository program. Further details will be
    developed as we proceed with transportation planning. We will continue
    to work with the stakeholders, including the State of Nevada and
    affected units of local government throughout the various phases of the
    repository's development and operation.
                            stakeholder involvement
        Question. What is your vision for continued involvement of affected
    units of State and local government in the Yucca Mountain program
    during the license and application phase and subsequent phases of
    repository development?
        Answer. I believe the Nuclear Waste Policy Act contemplated a
    cooperative, ``government-to-government'' relationship between the
    Department and the State and each of the affected units of local
    governments throughout all phases of the repository development. I
    believe that each governmental unit must have well defined roles and a
    clear understanding of their responsibilities under the NWPA. Equally
    important, we should clearly understand each others' responsibilities
    and constituency. We need not agree on every issue but we should
    understand and appreciate each others' positions.
        Question. Does the zero budget request mean that you will not be
    working with any of the counties, and that you no longer support their
    commenting on documents, their participation at meetings, their
    assessment of impacts, their preparation of data for the Licensing
    Support Network, or their provision of information to their citizens?
    If you are proposing to support some county programs and not others,
    what criteria will you use for determining their participation?
        Answer. The Department's practice has been to provide the State and
    affected units of local government with oversight funding as
    appropriated by Congress, and the Department does not expect to deviate
    from this practice. As the Department transitions from a site
    characterization phase to a licensing phase, it is important for the
    Department, State, and affected units of local government to identify
    the types of activities for which oversight funding can be requested
    and provided. We are developing guidelines for activities that could be
    funded in the licensing phase. These guidelines will be discussed at
    the next Affected Units of Government meeting scheduled for June.
                      legacy management at yucca mountain
        Question. What is your vision for legacy management in relation to
    the Yucca Mountain project?
        Answer. There are varying views of what ``legacy'' management can
    mean. However, let me share with you the view I expressed during my
    confirmation hearing. I believe the existence and continuing
    accumulation of nuclear waste, spent fuel, and excess defense nuclear
    materials in the United States and globally demonstrates that the long-
    term management and disposal is not a matter of choice but a necessity.
    Prudent management of these materials is a profound and enduring
    responsibility of the Federal Government, the international community,
    and the world at large. I believe geologic repositories are vital to
    closing the nuclear fuel cycle and removing an impediment to the future
    development of nuclear power in this country. At the same time,
    repositories provide the means for us to manage excess defense nuclear
    materials and promote global non-proliferation.
        After many years of study, the scientific consensus is that the
    best long-term solution for this legacy is safe disposal in a deep
    geologic repository. Above all, the most important goal for this
    program is the long-term safety of the repository. That is the most
    important test we have to pass. It is the program's vision to have an
    environmentally safe and secure repository that sets the standard for
    safety throughout the world.
        I hope the legacy of a safe repository at Yucca Mountain will be
    recognition that this facility served a vital role in both energy and
    national security for our Nation.

                              SUBCOMMITTEE RECESS

        Senator Domenici. We stand in recess.
        [Whereupon, at 3:50 p.m., Monday, April 7, the subcommittee
    was recessed, to reconvene subject to the call of the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                            THURSDAY, APRIL 10, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:37 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Pete V. Domenici (chairman)
    presiding.
        Present: Senators Domenici and Reid.

                              DEPARTMENT OF ENERGY

                     National Nuclear Safety Administration

    STATEMENT OF AMBASSADOR LINTON F. BROOKS, UNDER
                SECRETARY FOR NUCLEAR SECURITY,
                ADMINISTRATOR FOR NATIONAL NUCLEAR SECURITY
                ADMINISTRATION
    ACCOMPANIED BY:
            ADMIRAL FRANK L. BOWMAN, DEPUTY ADMINISTRATOR FOR NAVAL
                REACTORS
            DR. EVERET H. BECKNER, DEPUTY ADMINISTRATOR FOR DEFENSE
                PROGRAMS
            KENNETH E. BAKER, DEPUTY ADMINISTRATOR FOR DEFENSE NUCLEAR
                NONPROLIFERATION

                 OPENING STATEMENT OF SENATOR PETE V. DOMENICI

        Senator Domenici. The hearing will please come to order.
    Thank you, everyone, for being here, and I apologize for my
    being late. I had another hearing and I hurried as much as I
    could.
        Senator Reid. You are only 7 minutes late. That is not
    late.
        Senator Domenici. That is pretty good, yes.
        The budget request for NNSA is $8.834 billion. That is an
    increase of $870 million over the current year level, an 11
    percent increase. It is containing the following major program
    elements, one, nuclear weapons activities. The budget request
    is--excuse me--is $6.378 billion, an increase of $642 million,
    an 8 percent increase. We have, in addition, defense nuclear
    nonproliferation, naval reactors, and the Office of the
    Administrator.
        First of all, the committee will review the fiscal year
    2004 request for the National Nuclear Security Administration,
    that will include nuclear weapons activities, nuclear
    nonproliferation programs, and the naval nuclear propulsion
    program.
        In that regard, we will receive testimony from Ambassador
    Linton Brooks, acting Administrator for NNSA. We thank you for
    coming and you are doing an excellent job. We are glad to have
    you here.
        Admiral Frank Bowman, Deputy Administrator for Naval
    Nuclear Propulsion. Thank you so much, Admiral, and once again
    our compliments to you for the fine work you are doing.
        And Dr. Everet Beckner, Deputy Administrator for Defense
    Programs. Good to have you.
        And Mr. Kenneth E. Baker, acting Deputy Administrator for
    Defense Nuclear Nonproliferation. Welcome to all of you.
        For fiscal year 2004, I have already indicated the budget
    request is about $8.8 billion, an increase of 11 percent. By
    all accounts, this is a good budget, continuing a trend that
    began last year. The budget is consistent with the 5-year
    budget program, which we required the NNSA to develop when we
    passed the Act. The transition to a 5-year budget plan has been
    challenging, and I am certain that it has been very challenging
    to all of you here in this room and those who work with you and
    for you. But I believe it is an important tool in developing
    strong support for the NNSA budget inside the Office of
    Management and Budget.
        Within the NNSA budget, $6.38 billion is requested for
    nuclear weapons activities in 2004. This is an increase of $462
    million, 8 percent, over the current year. For nuclear
    nonproliferation, the budget request is $1.34 billion, an
    increase of $319 million, 31 percent. The most notable increase
    within this budget is $272 million to start construction of the
    plutonium disposition facilities in South Carolina.
        However, I do not believe the budget provides enough
    funding to do everything that NNSA could be doing to protect us
    from the dangers of nuclear terrorism. That is a key reason
    that Senator Reid and I worked to provide an additional $150
    million for nuclear nonproliferation in the Homeland Security
    supplemental, Senator, and which you even thought we should add
    to that, Senator Reid.
        Finally, the activities of the naval nuclear propulsion
    program, that budget request is $768 million. That is an
    increase of $66 million. That is an 8 1/2 percent increase.
    This program continues its tradition of being one of the best
    run in our national Government.
        I look forward to engaging each of our witnesses today and
    working with you, the members of the subcommittee, to put
    together the best possible appropriation bill that we can.
        I would like to briefly address the situation of the last
    few months at Los Alamos, in my home State of New Mexico, by
    saying what others have concluded, that the laboratory has been
    managed well in a number of key areas, in particular the
    management of its business and acquisition systems and in
    performing internal audits and assessments. I should have said
    ``not managed well in those areas.'' The lab has made some
    mistakes, and I am engaged with the Secretary and the NNSA as
    to how best to fix those mistakes.
        I will say as an aside, the interim director, Pete Nanos,
    is doing a great job. Everybody associated with his current
    tenure, albeit short-lived, seems to be saying the same thing.
        But this turbulence during the last several months has
    encouraged many long-term opponents of the lab and its nuclear
    weapons mission to come out of the woodwork. Many people seem
    to be talking about Los Alamos only in a pejorative way. But I
    do not want to forget that the laboratory has a great deal of
    merit on its side. They have done many incredible things in the
    last 60-year history that have earned them the reputation of
    being the premier scientific laboratory in the world.
        From the darkest hours of World War II through the Cold War
    to today, the laboratory at Los Alamos has typified America's
    scientific might in a range of activities from the human genome
    to nuclear weapons. It has always represented the best that the
    country has. So we will work through these current problems.
        Later this year, I intend to conduct hearings on all of the
    laboratories, their roles, and missions. This will be done
    wearing another hat, a hat of the Authorizing Committee of--for
    the Energy and Natural Resources of the United States Senate.
    Part of that process will include a reevaluation of how we
    manage all of the laboratories, clarification of the
    responsibilities that lay with the Secretary, the NNSA, the
    contractors, such as the University of California, and the lab
    directors.
        In many ways, I fear that the way the DOE manages its labs
    has become too complex and confused, and I am hopeful that
    within a year or so with these hearings, in-depth hearings, we
    will eliminate some of that confusion and come forth with some
    more simplified approaches.
        We ought to find ways to strengthen the management at Los
    Alamos and other ways that are going to be appropriate in
    making it better for our future. I do not think we can afford
    to do anything less.
        With that, I yield to my good friend and distinguished
    Senator from Nevada, Senator Reid.

                        STATEMENT OF SENATOR HARRY REID

        Senator Reid. I served on this subcommittee for many years,
    and following the retirement of Bennett Johnson I have been
    ranking Democrat and oftentimes the chair of this subcommittee.
    And the Senator from New Mexico and I have developed a very
    fine relationship.
        And let me say to each of you, this National Nuclear
    Security Administration is something that I did not favor. I
    thought it was unnecessary. The Nuclear--the National Nuclear
    Security Administration is, basically, a product of the mind of
    Senator Domenici. Other people may have worked with him on
    this, but basically it was his idea, and he was the reason it
    went forward. And as I announced last year at this same
    meeting, I am now a convert. I think it has worked extremely
    well. We have had good people who have been administering this
    program, an interesting new program we have here.
        So, anyway, Senator Domenici, I appreciate your having done
    this. You were visionary in being able to do it.
        I would also say this: Senator Domenici mentioned the labs.
    I do not know if the people of this country--the people of the
    State of New Mexico, are really aware of what has been done by
    Senator Domenici and these laboratories. But for him, I can
    remember as a relatively new member of this subcommittee, of
    him talking with Senator Johnson about the labs, and that the
    real science being conducted in this country is in the labs.
    And some of the greatest scientists in the world are in these
    laboratories.
        So, certainly, the people of New Mexico should be aware of
    the fact that Senator Domenici has worked so hard and done so
    much to keep these labs funded, even in trying times to cut
    back these funds. And there have been fires, and scandals, and
    all kinds of things, but through it all the labs have come out
    just fine.
        Last year I raised a variety of concerns about the
    administration's request for this agency. I felt that the
    requests for the pit production program was short of what was
    required to meet our milestones for the critical stockpiles
    stewardship program. Senator Domenici and I worked together
    last year, as we always do, and raised the budget for pit
    production high enough to keep the program on track. We were
    able to keep that additional funding in conference also.
        I do not have the same concern this year. Actually, the
    President's budget has me very pleasantly surprised. I think it
    is a--this is fine. I see there are no gaping holes in the
    request. As we move closer to markup, I am sure there will be
    some modifications or requests here and there, but I do not
    expect anything as dramatic as the last few years.
        That having been said, there are certain things that you
    have deleted from a variety of programs that have significant
    member interest, and there will be tremendous pressure on us,
    and rightfully so, to find--to fund these items within our
    overall total. Maybe we can find some extra money; but the way
    things are going, that is doubtful. And with the budget as
    tight as I expect it to be, we may be forced to accommodate
    them within the total of the money that we have and you have
    given us.
        Many of the items that you have deleted are programs that
    have been funded year in and year out and have proved
    invaluable contributors to our national defense. And so if you
    see fit to delete them, that does not mean that we will.
        I am always concerned and, I guess, it is Federal
    Government that you have to get used to, is that if it has not
    been done before, you do not do it. And there are certain
    things that we have to continually improvise to meet exigencies
    of a situation that develops, especially in an agency like
    this.
        So, and the last thing that I would like to say, is that
    even though I know that you have tremendous pressure from OMB,
    we want you to also understand that we have tremendous brain
    power down here also. The staff that we have behind us are
    experts. They do a wonderful job in making sure the legislative
    branch of Government competes as it should constitutionally
    with the executive branch of Government. And all of the wisdom
    of the world is not within the executive branch of Government.
        A couple more thoughts before I close. You requested
    funding for an advanced concepts initiative for nuclear
    deterrents which seems to expand on funding you sought and
    received last year. So this is something we have to really be
    careful on, careful about. We will examine this very closely.
    The authorizing committee will consider this program in
    expansional length when they mark up their bill, and we are
    going to watch to see what comes out of that authorizing
    committee.
        I would also like to make sure that you give us all you can
    on this 18-month test readiness posture. It is something
    important for the country and the world, and we would hope that
    you would give us the benefit of your thoughts in that regard.
        Mr. Chairman, I am going--as I have indicated to you, I am
    going to have to leave in a little bit. So I would ask your
    permission to submit written questions and that the witnesses
    get these back to us within 2 weeks.
        Senator Domenici. We will do that, and if the witnesses
    will respond within 2 weeks. Thank you very much for your kind
    remarks and for your overall assessment.
        We will start with you, Mr. Ambassador. You have heard so
    many nice words, maybe you do not even have to testify. Maybe
    you can just sit there and smile.

                         STATEMENT OF LINTON F. BROOKS

        Ambassador Brooks. Well, Mr. Chairman, actually I am
    gratified to know that we are thinking of the same things,
    because you gave much of my statement. So I will abbreviate it
    even further.
        Thank you, Mr. Chairman and Senator Reid, for the
    opportunity to appear. This is my first appearance as the
    acting Administrator, and I want to start by thanking the
    subcommittee and the members on both sides of the aisle with
    their strong support for our important national security
    responsibilities. I have provided a detailed written statement
    which I would like to summarize quite briefly before turning to
    my colleagues.
        NNSA has several complementary missions. We are supposed
    to, above all, provide a safe, secure, and reliable nuclear
    deterrent. In doing so, we are supposed to implement the
    President's decisions on the Nuclear Posture Review. We are
    supposed to reduce the threat of the proliferation of weapons
    of mass destruction. We are supposed to maintain a robust
    security posture. We are supposed to reinvest in the nuclear
    weapons infrastructure, support the nuclear propulsion needs of
    the Navy. And we are supposed to do this in an efficient way by
    supporting the President's management agenda.
        As you noted, the budget represents an 11-percent growth
    over last year and is consistent with the Future-Years Nuclear
    Security Program that we have submitted. I share your
    assessment that that has been an extremely valuable tool, and I
    look forward to it being even more valuable in the years ahead
    in enforcing sound planning and good fiscal discipline.
        My colleagues will be talking about the details, but I
    would like to give a very brief overview and then talk about
    some broad areas.
        The funds we are requesting for weapons activities will
    enable us to implement the Nuclear Posture Review. They will
    allow us to restore and maintain operational capabilities and
    keep a robust science and technology infrastructure. We are on
    schedule to produce, later this spring, the first certifiable
    plutonium pit in this country since the closure of Rocky Flats
    in 1989. And Los Alamos is on track to manufacture a
    certifiable pit for the stockpile by 2007.
        As Senator Reid mentioned, we are taking steps to reduce
    our nuclear test readiness to 18 months. That is an important
    initiative of the President's Nuclear Posture Review to which
    we are fully committed. Both the fiscal year 2003 and 2004
    budgets support this transition, which will take us about 3
    years.
        This budget also includes $21 million for advanced concepts
    work. That is small in terms of the overall budget, but it is
    important in policy terms. It includes $15 million for the
    Robust Nuclear Earth Penetrator. That system development work
    will begin later this month following the submission of a
    report to the Congress which the Defense Department submitted
    in mid-March. In addition, there is $6 million for advanced
    concepts work which we intend to use in conjunction with the
    Department of Defense to revitalize the intellectual capital
    and to think about what options might be necessary, and I need
    to emphasize ``might be necessary,'' in the future.
        The Nuclear Posture Review the President approved last year
    gives a responsive infrastructure equal priority with offensive
    strike and defense. We implement that in two particular ways:
    the Readiness in Technical Base and Facilities, which is an
    account that will be with us forever and is intended to operate
    and maintain the facilities needed for stockpile stewardship;
    and the Facilities and Infrastructure Recapitalization Program,
    which is, basically, a get-well program that should be
    completed in about a decade.
        These programs work together to restore, revitalize, and
    rebuild the weapons complex. They are fixing the backlog in
    deferred maintenance, and I believe they are absolutely crucial
    and hope the committee will continue to support them.
        As the chairman mentioned, we are requesting a 30-percent
    increase in Defense Nuclear Nonproliferation funds. Much of our
    program is the same as last year. The largest dollar increase
    is for the MOX Fuel Fabrication Facility. Russia has agreed to
    use the same design, and, therefore, both of us should be able
    to begin construction in 2004. The other increases in
    nonproliferation support the beginning of a program to purchase
    additional highly-enriched uranium from the Russian Federation,
    thus taking it permanently out of risk for proliferation, to
    strengthen safeguards, and then for one or two other minor
    initiatives.
        Last year, NNSA assumed responsibility for a production
    that will shut down the last three plutonium production
    reactors in the Russian Federation. We are about to compete for
    the contractor to actually carry that out. The contractor will
    be selected from a group of contractors with extensive
    experience both in fossil fuel plant construction, which we are
    going to build to replace these reactors, and in working in
    Russia.
        Admiral Bowman will talk about the Naval Reactors program.
        Senator Domenici. Mr. Ambassador, would you just hold for a
    second?
        Ambassador Brooks. Certainly, sir.
        Senator Domenici. I have to see my constituents here just
    for a second. If I do not see them, nobody else will.
        Okay. Thank you, Mr. Ambassador. Please proceed.
        Ambassador Brooks. In fiscal year 2004, Naval Reactors will
    support 103 reactors and 82 nuclear-powered warships, including
    the first-of-a-class reactor when U.S.S. Virginia goes to sea.
        Naval Reactors will continue to design and develop the
    reactor for the new transformational carrier. And the budget
    increase will allow beginning the development of the so-called
    transformational technology core, which will achieve a
    substantial increase in core energy and result in greater
    operational ability and flexibility. In addition, the Naval
    Reactor budget increase will allow maintenance and replacement
    of some of the program's 50-plus-year-old infrastructure.
        Key to ensuring the health and safety of all our activities
    is safeguards and security. The program focuses on protection
    of people, nuclear weapons, information, special nuclear
    material, and infrastructure.
        Immediately following September 11, 2001, my predecessor
    initiated an increase in our security posture. And as a result
    of that, I am satisfied with the level of security complex-
    wide. Now, most of that increase was in physical protection,
    and what that mostly means is more guards. As we look to the
    future, physical protection is going to be more complicated and
    costly. So in 2004 we will begin a modest research and
    development effort to try and understand how technology might
    improve security while reducing the demands on physical
    security force, staffing, and overtime.
        Finally, the budget requests $348 million for the Federal
    workforce. This will provide our direction and oversight of
    operations. Naval Reactors and our secure transportation assets
    activities are separately budgeted.
        Our budget reflects declining staffing increases, but it
    also includes about $16 million for re-engineering and
    relocation costs necessary to bring about the new
    organizational model, which I will mention in a moment.
        Before turning to my colleagues, I would like to mention
    some of the management challenges that we have been facing and
    some of the successes we have had. The most obvious challenge
    you have already referred to, Mr. Chairman, and that has been
    the management issues at Los Alamos National Laboratory.
        It is important to put those challenges in context. There
    has been no suggestion of any diminution in the high quality of
    the science. There has been no suggestion of any problems with
    security. There has been no suggestion of any problems with
    safety. But there have been significant weaknesses in business
    practices. As soon as we learned of them, Secretary Abraham and
    I insisted the University of California, which manages the
    laboratory, take corrective action. And generally, I am
    satisfied--that is not true. I am pleased with the corrective
    action taken to date. The University has been vigorous, and I
    share your assessment that the interim laboratory director is
    doing a superb job.
        In addition to what we have done in Los Alamos, we have
    compiled a comprehensive set of lessons learned to share that
    with all of our sites to avoid similar problems in other areas.
        On a more optimistic note, I believe we are making good
    progress in meeting the intent of the Congress in creating the
    National Nuclear Security Administration. On December 20 of
    last year, I implemented the revised management approach we
    reported to the Congress last year. We eliminated a layer of
    management. We shifted the locus of Federal oversight to eight
    site offices. We consolidated all business and administrative
    support into a single service center to be physically
    consolidated next year.
        These changes, along with other workload reduction
    initiatives, should allow us to reduce the Federal workforce by
    about 20 percent by the end of next year in all areas except
    secure transportation asset, nonproliferation, naval reactors,
    and emergency operations.
        I mentioned in the beginning of my remarks that we are
    mindful of the President's management agenda. With an emphasis
    on our new planning, programming, budgeting, and evaluation
    process, we are trying to take a long view, budget with firm
    resource envelopes, and then manage to those budgets. Our
    process was modeled after the Department of Defense, but
    tailored to our needs. It will take several budget cycles
    before we get all the benefit this system will use, and I am
    very pleased with our progress.
        I am also pleased with our participation in the
    administration's Performance Assessment Rating Tool (PART).
    This year the Office of Management and Budget evaluated four
    programs that encompass about 20 percent of our total funding.
    Two of those programs, the advanced computing initiative and
    the nuclear material protection and cooperation, were rated in
    the top 5 percent of all programs government-wide, and they
    were the two highest rated programs in the Department of
    Energy. We will be incorporating PART assessment for all of our
    programs as part of our own internal evaluation cycle, starting
    with the fiscal year 2005 budget we will begin working on this
    summer.
        In conclusion, Mr. Chairman, I am confident we are headed
    in the right direction. Our budget request will support
    continuing our progress in protecting and certifying our
    deterrent, reducing the global danger from proliferation, and
    enhancing the force projection capabilities of the U.S. nuclear
    Navy. It will enable us to continue to maintain the safety and
    security of the NNSA complex, and, above all, I believe it will
    meet the national security needs of the United States for the
    coming century.

                               PREPARED STATEMENT

        Mr. Chairman, this concludes my statement. My colleagues
    and I will be ready to answer your questions after they have
    had the opportunity to present their own statements.
        Senator Domenici. Thank you very much, Mr. Ambassador.
        [The statement follows:]
                     Prepared Statement of Linton F. Brooks
        Thank you for the opportunity to appear today to discuss the Fiscal
    Year 2004 President's Budget Request for the National Nuclear Security
    Administration. This is my first appearance before this Subcommittee as
    the Acting Administrator of NNSA, and I want to thank all of the
    Members for their strong support of our important national security
    responsibilities. I would like to begin my testimony here today by
    providing an overview of the NNSA mission requirements followed by the
    highlights of our budget request.
                                    overview
        The NNSA, comprised of Defense Programs, the Defense Nuclear
    Nonproliferation Program, and the Naval Reactors Program, has several
    complementary mission requirements:
      --Provide a safe, secure and reliable nuclear deterrent and implement
            the President's decisions on the Nuclear Posture Review (NPR)
            recommendations.
      --Reduce the threat posed by the proliferation of weapons of mass
            destruction and continue to support the Global War on Terrorism
            through aggressive nuclear nonproliferation programs.
      --Maintain a robust security posture at NNSA facilities.
      --Revitalize the nuclear weapons complex infrastructure.
      --Support the nuclear propulsion needs of the U.S. Navy.
      --Support the President's Management Agenda for more effective
            government.
        The fiscal year 2004 budget request totals $8.8 billion, an
    increase of $878 million, about 11 percent, over the enacted fiscal
    year 2003 budget. The request is consistent with the planned program
    levels in the Future-Years Nuclear Security Program recently submitted
    to the Congress. This substantial increase reflects the
    Administration's commitment to sustain a stable and effective long term
    national security program through the NNSA, as well as our obligation
    to our citizens to conduct this program safely, securely, and in an
    environmentally acceptable manner.
        We are building on recent accomplishments. Although there is a
    large increase in this year's budget request, there is no single new
    initiative driving this growth. Rather, we are continuing plans and
    programs already set in motion, and adjusting to the guidance in the
    Nuclear Posture Review. We are moving beyond the talking and planning
    phase of many programs conceived in the 1990's.
        This budget supports the Stockpile Stewardship Program, which
    continues to successfully certify to the President the safety and
    reliability of the nuclear weapons stockpile without underground
    nuclear testing. It includes funds to begin a modest Advanced Concepts
    initiative to provide nuclear deterrence options, begin the transition
    to a 18-month test readiness posture, continue to revitalize the
    facilities and infrastructure that are the bedrock of the weapons
    complex, and push the outer limits of scientific, modeling, and
    computing ability to apply new experimental capabilities to the
    processes of maintaining and certifying the stockpile. It supports our
    efforts to manufacture certifiable pits and to produce tritium.
        In the area of reducing global nuclear danger, this budget request
    for the Defense Nuclear Nonproliferation Program reflects the
    President's and Secretary Abraham's emphasis on reducing proliferation
    threats, including the Global Partnership formed at the Kananaskis
    Summit in June 2002. The fiscal year 2004 request contains funds to
    support attacking the problem globally, to improve the physical
    security of nuclear material, to consolidate and reduce that material,
    and to end its production. It also continues efforts to prevent illicit
    trafficking of nuclear materials, to improve our ability to detect
    proliferation, and to stem the ``Brain Drain'' of weapons experienced
    scientists from Russia.
        Under this budget, the Naval Reactors Program will initiate the
    design and development of a new reactor that will utilize advanced
    materials to achieve a substantial increase in core energy. The result
    will be greater ship operational ability and flexibility to meet
    increasing national security demands.
                             budget summary tables
        The fiscal year 2003 estimates in the fiscal year 2004 budget
    documents transmitted to the Congress reflect the President's fiscal
    year 2003 Budget Request because final fiscal year 2003 appropriations
    were not enacted until February 20, 2003. The Future-Years National
    Security Program tables tie to the President's Budget Request. The
    table below summarizes the enacted funding levels by appropriation. The
    fiscal year 2003 appropriations estimates are made comparable to the
    fiscal year 2004 President's Budget Request by eliminating fiscal year
    2003 appropriations being transferred to the Department of Homeland
    Security and to the Department of Energy's Office of Security (for
    COOP/COG activities). The fiscal year 2003 totals detailed in the table
    below also reflect applications of the general reductions and the
    government-wide, across the board reduction of 0.65 percent enacted in
    the final fiscal year 2003 appropriations.
        The outyear budget estimates and associated programmatic
    information for NNSA programs are contained in the Future-Years Nuclear
    Security Program document I forwarded to the Congress in February.

                                    FISCAL YEAR 2004 NNSA PRESIDENT'S BUDGET REQUEST
                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                            Fiscal Year     Fiscal      Fiscal
                                                2002       Year 2003   Year 2003    Fiscal                  Percent
                                             Comparable      Comp        Comp      Year 2004   $ Change     Change
                                           Appropriation    Request     Approps     Request
    ----------------------------------------------------------------------------------------------------------------
    Weapons Activities...................        $5,542       $5,846      $5,895      $6,378        $483         8.2
    Defense Nuclear Nonproliferation.....     \1\ 1,048        1,028  \2\ \3\ 1,       1,340         318        31.1
                                                                             022
    Naval Reactors.......................           688          707         702         768          66         9.4
    Office of the Administrator..........           307          329  \3\ \4\ 32         348          27         8.4
                                                                               1
                                          --------------------------------------------------------------------------
          Total..........................         7,585        7,909       7,940       8,835         895        11.3
    ----------------------------------------------------------------------------------------------------------------
    \1\ Does not include $10 million appropriated as part of the fiscal year 2002 supplemental (Public Law 107-206)
      for Domestic Sealed Sources Recovery in the Environmental Management Program.
    \2\ Does not include funding appropriated for programs transferred to the Department of Homeland Security.
    \3\ Does not include $9.125 million requested to be transferred in fiscal year 2002 from Defense Nuclear
      Nonproliferation to the Office of the Administrator. This transfer was approved early in fiscal year 2003.
    \4\ Does not include funding appropriated for activities transferred to Homeland Security, or to Office of
      Security for COOP/COG.

                           NNSA OUTYEAR BUDGET REQUESTS--FUTURE-YEARS NUCLEAR SECURITY PROGRAM
                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                Fiscal      Fiscal      Fiscal      Fiscal      Fiscal      Fiscal
                                               Year 2004   Year 2005   Year 2006   Year 2007   Year 2008   Year 2009
    ----------------------------------------------------------------------------------------------------------------
    Weapons Activities......................      $6,378      $6,661      $6,961      $7,277      $7,518      $7,651
    Defense Nuclear Nonproliferation........       1,340       1,356       1,371       1,389       1,322       1,346
    Naval Reactors..........................         768         808         795         811         819         834
    Office of the Administrator.............         348         337         344         353         355         362
                                             -----------------------------------------------------------------------
          Total.............................       8,835       9,162       9,471       9,830      10,014      10,193
    ----------------------------------------------------------------------------------------------------------------

                 nuclear forces and the nuclear posture review
        Before going into Weapons Activities Stockpile Stewardship Program,
    I will discuss the NNSA's response to the broader policy framework set
    out in the Nuclear Posture Review (NPR) and its implementation.
        As the NPR has articulated, the 21st century presents the prospect
    of a national security environment in which threats may evolve more
    quickly, be more variable in nature, and be less predictable than in
    the past. In this broad threat environment, nuclear weapons will play a
    reduced role in the overall United States security posture--a point
    reinforced in the NPR. At the same time, the NPR reaffirmed that, for
    the foreseeable future, nuclear forces linked with an advanced
    conventional strike and integrated with the capabilities offered by the
    other two legs of the New Triad will continue to be an essential
    element of national security by strengthening our overall abilities to
    reassure allies of U.S. commitments, dissuade arms competition from
    potential adversaries, and deter threats to the United States, its
    overseas forces, allies, and friends.
        The NPR offered a basic reassessment of the role of nuclear forces
    and their contribution toward meeting these defense policy goals. It
    established the need for a capabilities-based force, a dramatic
    departure from the threat-based rationale for the nuclear force of the
    past. This change, in combination with the judgment to no longer plan
    our forces as if Russia presented an immediate threat to the United
    States, was the basis for dramatic reductions codified in the Moscow
    Treaty in the level of operationally-deployed strategic nuclear forces.
    Over the next decade, the number of deployed warheads will be cut by
    approximately two-thirds from today's level.
        To meet the challenges of an uncertain and unpredictable threat
    environment, and in seeking to mitigate any dangers associated with
    dramatically reduced nuclear forces, the nuclear weapons enterprise
    must be able to respond rapidly and decisively. This is the idea behind
    the third leg of the New Triad. That is, by providing means to respond
    to new, unexpected, or emerging threats in a timely manner, the R&D and
    industrial infrastructure needed to develop, build, and maintain
    nuclear offensive forces and defensive systems (of which the nuclear
    enterprise is a key component) is itself a principal tool for achieving
    our overall defense strategy. This concept, and its endorsement by the
    NPR, has had enormous implications for NNSA in helping to gain strong
    support for its programs from DOD and others.
        We are pressing ahead with efforts to reverse the deterioration of
    the nuclear weapons infrastructure, restore lost production
    capabilities and modernize others in order to meet the stockpile
    refurbishment plan. We are actively assessing the NPR's implications in
    a number of other related areas. Finally, we are pursuing initiatives
    endorsed by the NPR which are intended to provide the nuclear weapons
    enterprise with the flexibility to provide a timely response to
    ``surprise,'' or to changes in the threat environment.
                   weapons activities--stockpile stewardship
        The President's fiscal year 2004 request for Stockpile Stewardship
    continues to build and expand on the scientific and engineering
    successes that are the hallmarks of this program. This request totals
    $6.378 billion, an increase of 8.2 percent. It will also allow us to
    meet our requirements under the terms of the Nuclear Posture Review
    including enhancing test readiness, reinvigorating the advanced
    concepts work in the weapons laboratories, and restoring the weapons
    complex to meet the national security requirements of the 21st Century.
    There are a number of significant milestones we expect to achieve this
    year.
      --Manufacture the first certifiable W88 pit.
      --Begin irradiation of the first Tritium Producing Burnable Absorber
            Rods in the TVA's Watts Bar Reactor.
      --Continue delivery of W87 Life Extended warheads to the Air Force.
      --Complete environmental documentation in support of the Modern Pit
            Facility.
      --Deliver four ultraviolet beams of NIF laser light to the target
            chamber.
      --Initiate Stockpile Stewardship experiments in NIF.
      --Perform two- and three-dimensional simulations of aging stockpile
            weapons focused on Life Extension Program activities.
      --Ship nuclear weapons, weapons components, and nuclear materials
            safely through the Secure Transportation Asset.
      --Conduct subcritical experiments at the Nevada Test Site to better
            understand plutonium aging.
      --Begin work on the Advanced Concepts initiative and, in particular,
            on the RNEP Phase 6.2 studies with the Air Force.
        These major milestones will be accomplished by the weapons complex
    in addition to the manufacture of thousands of components needed to
    maintain the stockpile. The complex will also carry out hundreds of
    smaller scale experiments, perform surveillance activities, address
    Significant Finding Investigations to ensure weapons safety and
    operability, conduct flight tests with the support of the DOD, deploy
    new manufacturing tools and processes at the production plants, and
    safely dismantle weapons excess to national security requirements.
        These and other activities are dependent on retaining today's
    highly skilled workforce and recruiting the next generation of
    stockpile stewards. Over the last several years, NNSA has made a
    significant headway on this all-important front. Critical skill
    vacancies across the complex have been reduced to 8 percent.
    Inextricably linked to recruitment and retention is providing the
    quality workspace and fully functioning tools and technologies needed
    by our scientists and engineers to carry out their work. We are working
    diligently to reinvest in the weapons complex infrastructure.
        I would now like to highlight several activities under the
    Stockpile Stewardship Program that I believe are of particular interest
    to this committee.
        Pit Manufacturing and Certification Campaign.--Restoring the
    Nation's ability to manufacture plutonium pits in support of the
    stockpile has been a central challenge for the stewardship program
    since the closure of the Rocky Flats plant in 1989. The United States
    has never before manufactured and certified pits without nuclear
    testing. I am very pleased to report that late this spring, Los Alamos
    will manufacture the first certifiable W88 pit. LANL also remains on-
    track to manufacture a war reserve W88 pit by 2007. To achieve this
    critical milestone, LANL has produced a number of development pits and
    has performed a series of engineering tests and physics experiments to
    confirm pit performance.
        While the TA-55 facilities at LANL are adequate to support the W88
    pit campaign, they do not appear to be capable of supporting the
    manufacturing need for long-term stockpile support. NNSA has begun
    planning for a Modern Pit Facility (MPF) consistent with the Record of
    Decision for Stockpile Stewardship and Management and the NPR. In May
    2002, the Secretary of Energy formally approved Critical Decision ``0''
    (CD-0) for the MPF. The NNSA is now examining five candidate sites--
    Pantex, Carlsbad, the Nevada Test Site, Savannah River and Los Alamos--
    as possible locations for the MPF. We expect to issue a Draft
    Environmental Impact Statement (EIS) later this spring. Following a
    series of public meetings, a final EIS and associated Record of
    Decision (ROD) will be issued. The program will prepare site specific
    environmental documentation if the ROD supports a decision to construct
    and operate an MPF. The fiscal year 2004 request will allow conceptual
    design and other planning activities, NEPA work, and technology
    development activities to proceed on a schedule that will support a CD-
    1 decision in fiscal year 2006.
        Test Readiness.--While I continue to have confidence in the ability
    of the Stockpile Stewardship Program to continue to ensure the safety,
    security, and reliability of this Nation's nuclear deterrent, we must
    maintain our ability to carry out nuclear weapons tests. Our current
    readiness posture to conduct such a test is 24 to 36 months, as
    established in a 1993 Presidential Decision Directive. Last year's NPR
    stated that this period should be reduced in order to provide options
    to deal with defense policy goals, including resolving unanticipated
    problems in the stockpile. A study completed in July 2002 confirmed
    that additional work was required to maintain the present posture, but
    it also led us to conclude that the right posture is to be ready for a
    test within approximately 18 months. With fiscal year 2003 funding now
    in place, we intend to begin the transition to a 18 month posture. The
    Nuclear Weapons Council has concurred that our intended action is
    appropriate. The transition to this new readiness posture is expected
    to take approximately three years.
        Although there have been discussions about a transition to shorter
    times, there is concern that an unnecessarily expedited time-frame may
    cause adverse effects on critical personnel resources and require
    significantly more funding. It is not likely that we will be able to
    match the short lead times when the weapons complex conducted multiple
    underground tests annually, nor do I think it is prudent to tie-up
    important resources to indefinitely maintain an extremely short test
    readiness posture. Since device and diagnostics preparations are driven
    by the particular weapon to be tested and the questions to be answered
    by the test, such a posture might not be responsive to a surprise in
    the stockpile. The NNSA is studying this matter and I will soon be
    reporting to the Congress on these subjects as directed in the fiscal
    year 2003 Defense Authorization Bill.
        Advanced Concepts/Robust Nuclear Earth Penetrator.--The NPR also
    highlighted the importance of pursuing Advanced Concepts work to ensure
    that the weapons complex can provide nuclear deterrence options well
    into the next century. To that end, the fiscal year 2004 budget
    includes $21 million for Advanced Concepts work. About $15 million will
    be allocated to the Robust Nuclear Earth Penetrator (RNEP), with the
    balance of the funding divided between the weapons laboratories for
    concept and feasibility studies of possible nuclear weapon
    modifications, or new designs to meet possible new requirements.
        The Department of Defense submitted the report on RNEP to the
    Congress on March 19, 2003, as required by the fiscal year 2003 Bob
    Stump National Defense Authorization Act. The NNSA will begin an in-
    depth study once the 30 day waiting period has elapsed. As members
    know, this study will examine whether or not two existing warheads in
    the stockpile the B61 and the B83 can be sufficiently hardened through
    case modifications and other work to allow the weapons to survive
    penetration into various geologies before detonating. This would
    enhance the Nation's ability to hold hard and deeply buried targets at
    risk. The RNEP feasibility and cost study is currently scheduled for
    completion in 2006; however, we are looking at opportunities to reduce
    study time.
        For other advanced concepts, we will work with the DOD to assess
    evolving military requirements. We will carry out theoretical and
    engineering design work. I should stress that we have no requirement to
    actually develop any new weapons at this time.
        Physical Infrastructure.--Since its inception, the NNSA has been
    committed to a disciplined corporate facilities management approach to
    improve the facility conditions of the nuclear weapons complex. We made
    this corporate commitment clearly recognizing the drivers and practices
    of the past decade had ultimately resulted in a complex with
    significant deterioration in our physical infrastructure and an
    excessive backlog of deferred maintenance. The NNSA complex is part of
    our Nation's strategic nuclear infrastructure and the third leg of the
    New Triad as defined in the Nuclear Posture Review. The Nuclear Posture
    Review gave a responsive infrastructure equal priority with offensive
    and defensive weapons. Through our focused and disciplined efforts, we
    now have underway an effective and integrated program to restore,
    revitalize, and rebuild our nuclear weapons program infrastructure.
        Two complementary accounts in the budget, Readiness in Technical
    Base and Facilities (RTBF) and the Facilities and Infrastructure
    Recapitalization Program (FIRP), are essential to the operation,
    maintenance, and renewal of a physical infrastructure. Funding for
    RTBF, Operations of Facilities, increases by 4 percent in the fiscal
    year 2004 request. The RTBF provides the funding needed to operate and
    maintain the facilities required for certification, thus ensuring the
    vitality of the NNSA national security complex and its goal of a
    consistent readiness level. FIRP is a capital renewal and
    sustainability program designed to eliminate maintenance backlogs. The
    FIRP addresses an integrated, prioritized list of maintenance and
    infrastructure projects, separate from the maintenance and
    infrastructure efforts of RTBF, which will significantly increase the
    operational efficiency and effectiveness of the NNSA sites.
        Importantly, beyond the application of the new and much needed
    funding, FIRP also brings a series of new facility management processes
    and best business practices which are improving our corporate facility
    management. One of the most important practices is the NNSA commitment
    to deferred maintenance reduction: stabilizing our backlog by fiscal
    year 2005 and returning it, for our mission essential facilities and
    infrastructure, to industry standards by fiscal year 2009. To meet this
    goal, the fiscal year 2004 budget request targets 45 percent of the
    FIRP Recapitalization subprogram to facilities and infrastructure
    specific deferred maintenance projects.
        Integral to our corporate approach to RTBF and FIRP are the
    linkages and discipline provided by the PPBE process, and specifically
    the Ten-Year Comprehensive Site Plans (TYCSP) and associated facilities
    and infrastructure planning processes. We are now in the third year
    that the NNSA has approved the TYCSPs, incorporating technical
    requirements and performance measures within the financial bounds of
    the FYNSP resource levels. From the field perspective, these plans
    provide Federal and M&O managers at each site with the tools and
    processes to propose, prioritize and obtain approval of the work needed
    to effectively manage their facilities and infrastructure. From the
    Headquarters perspective, the TYCSP provides the NNSA with a
    standardization that allows comparisons and planning to be effected
    complex-wide.
        In recent years, the combined and measurable efforts of FIRP and
    RTBF have worked to assure that we restore, revitalize, and rebuild the
    weapons complex infrastructure for today and tomorrow's missions.
    Across the weapons complex both programs are fixing the backlog of
    maintenance, keeping up with operational needs, and planning for the
    future to make a clear and visible difference. These combined efforts
    are crucial and I urge the committee to support them.
        Stockpile Life Extension.--While preparing for the future, the labs
    and plants are working very hard to extend the life of several elements
    of the existing nuclear weapons stockpile through the Life Extension
    Program (LEP). The NPR reaffirmed the decision as reached by the
    Nuclear Weapons Council on the timing, pace, scope, and technical
    aspects of the LEPs for the W76, W80, B61-7/11, and ongoing W87 work.
    Through this program new subsystems and components are designed, built,
    tested and installed, thereby extending the operational service life
    for these warheads for some 30 additional years.
        For the last several years, we have been extending the life of the
    W87 warhead for the Air Force. This work is ongoing at Y-12 National
    Security Complex, Lawrence Livermore and Sandia National Laboratories,
    and the Pantex Plant. We are more than half way through this effort and
    expect to wrap up the work by early 2004.
        Life extension for the W76 involves a comprehensive overhaul of the
    warhead, including replacement or refurbishment of the Arming, Firing
    and Fuzing set, high explosives, gas transfer system and other
    components. We will also be requalifying the weapon primary. For the
    W80, we will be replacing the Trajectory Sensing Signal and Neutron
    Generators, the tritium bottles and incorporating surety upgrades. For
    the B61, we will be refurbishing the secondary. The First Production
    Units for these systems are scheduled for delivery to the Navy and Air
    Force in: fiscal year 2007, fiscal year 2006 and fiscal year 2006,
    respectively.
        Tritium.--In addition to restoring plutonium manufacturing
    capabilities, NNSA will begin tritium production later this year when
    several hundred Tritium Producing Burnable Absorber Rods (TPBARs) are
    inserted into TVA's Watts Bar Reactor. However, because of significant
    changes in stockpile size in the outyears as a result of the NPR and
    the Moscow Treaty, the NNSA has, in concert with the DOD, adjusted the
    tritium production requirements to reflect these changes. We remain
    fully committed to exercise all elements of the system for producing,
    extracting, and purifying new tritium, including initial operation of
    the Tritium Extraction Facility (TEF) being constructed at the Savannah
    River Site.
        Timing of tritium production, extraction, and purification has also
    been delayed by approximately 17 months for two reasons: (1) a
    reduction in the stockpile requirements by the NPR and (2) a delay in
    completion of the TEF project. This program delay can be accomplished
    without impacting nuclear weapons readiness. A revised baseline has
    been approved increasing the Total Project Cost from $401 million to
    $506 million and delaying project completion from mid-fiscal year 2006
    to late-fiscal year 2007.
        Since the tritium decays by natural radioactivity at a rate of
    about 5 percent per year, and since irradiation service costs are the
    dominant operating costs in supplying tritium to the stockpile, it is
    prudent not to produce tritium beyond the stated national requirements.
    Since the program intends to complete and exercise all elements of the
    tritium production and purification system (including TVA's reactor(s)
    and the TEF) on a schedule that fully protects the stockpile
    requirements, irradiation services are being deferred in order to use
    funds planned for these activities to complete TEF.
        National Ignition Facility.--I am pleased to report that tremendous
    technical progress has been achieved over the last year at the National
    Ignition Facility (NIF). Its mission is to obtain fusion ignition in a
    laboratory setting by imploding a BB-sized capsule containing a mixture
    of the hydrogen isotopes, deuterium and tritium. The NIF will provide
    the capability to conduct laboratory experiments to address the high-
    energy density and fusion aspects that are important to both primaries
    and secondaries in the nuclear stockpile.
        In December 2002, the first four NIF laser beams were activated to
    generate a total of 43 kilojoules of infrared laser light in a single
    pulse. In March 2003, NIF delivered its first 4 beam of ultraviolet
    laser light focused onto a target at the center of the 30 foot-diameter
    target chamber. With this accomplishment, all elements of each of the
    NIF critical subsystems have been successfully activated and operated.
    Stewardship experiments will begin in fiscal year 2004.
        Advanced Simulation and Computing.--The Advanced Simulation and
    Computing (ASCI) Campaign is creating simulation capabilities that
    incorporate modern physics and engineering models to improve our
    ability to predict with confidence the behavior of the nuclear weapons
    in the stockpile. These models, validated against experimental data
    from past above ground and underground nuclear tests, are the
    repositories of expert designer judgment as well as the best scientific
    representations of our current knowledge of the performance of the
    nuclear weapons. The ASCI Campaign is driving the integration of the
    theoretical and experimental efforts within the Stockpile Stewardship
    Program.
        At the same time that ASCI continues the development of the most
    powerful computer capabilities needed for the future, the modern
    simulation tools previously developed by ASCI--the Blue Pacific and
    White Machines at LLNL, the Red Machine at SNL, and the Blue Mountain
    and Q machines at LANL--are being applied day-to-day to address
    immediate stockpile concerns. The ASCI codes are being used to close
    Significant Finding Investigations as well as to support Life Extension
    Programs for the W76, W80, W87, and B61. These activities are enabled
    by the ongoing supercomputing infrastructures at the national
    laboratories, encompassing both continuing operations as well as
    research in new techniques for storage, visualization, networking, and
    all aspects of the infrastructure required by modern computing.
        By fiscal year 2008, ASCI will deliver a high fidelity, full-system
    physics characterization of a nuclear weapon. At that time, the
    campaign will deliver a suite of validated codes, running on
    supercomputer platforms, acquired though open procurement, with user-
    friendly environments, advanced visualization tools for analysis, and
    the entire support structure to integrate the components together.
    Other program deliverables include high-performance storage and high-
    bandwidth networks. In support of a true integrated SSP effort, the
    ASCI Campaign continues to push the envelope in distance computing as
    well as in advanced encryption techniques and other approaches to
    ensure secure, classified networking.
                             secure transportation
        The Office of Secure Transportation is responsible for safely and
    securely moving nuclear weapons, special nuclear materials, select non-
    nuclear components, and Limited Life Components for the DOE and the
    DOD. This work is carried out by 225 Federal agents stationed at three
    sites--Pantex, Oak Ridge, and Albuquerque. These highly dedicated and
    skilled agents are authorized to use deadly force in the performance of
    their duties. Employing highly modified tractor trailers and escort
    vehicles, and secure and redundant communications they have amassed an
    impressive safety record of more than 100 million accident free miles
    without cargo compromise. I would note that this office also provides
    support to other elements of the DOE, including the Offices of
    Environmental Management and Nuclear Energy.
              nonproliferation--reducing the global nuclear danger
        The NNSA's nonproliferation activities are central to the Bush
    Administration's National Strategy to Combat Weapons of Mass
    Destruction of December 2002, which lists ``Strengthened
    Nonproliferation'' as a pillar of its approach to reducing
    proliferation threats. Secretary Abraham and the NNSA are committed to
    this critical mission. This commitment is reflected in the diversity of
    our programs to address nonproliferation concerns in Russia, other
    former Soviet states, and, increasingly, throughout the world. The NNSA
    uniquely integrates technical and policy expertise to guide and
    implement the full range of U.S. nonproliferation priorities. The
    fiscal year 2004 request for this program is $1.34 billion, an increase
    of about 31 percent.
        The NNSA addresses concerns that arise from the two requisites of
    nuclear weapons proliferation: materials and expertise. Whether
    ensuring that former Russian weapons experts are able to put their
    skills to use on peaceful and commercial initiatives, reducing the
    footprint of Russia's ``closed'' nuclear cities, or leading on-the-
    ground programs to secure at-risk nuclear materials in Russia or
    elsewhere, NNSA is at the forefront of U.S. efforts to halt the
    proliferation of weapons of mass destruction and advance U.S. nuclear
    security interests.
        The Global Partnership Against the Spread of Weapons and Materials
    of Mass Destruction, formed at the Kananaskis Summit in June 2002, has
    recommitted the G-8 nations to increase greatly assistance to
    nonproliferation, disarmament, counter-terrorism, and nuclear safety.
    The partnership pledges to provide $20 billion over the next ten years
    for nonproliferation and threat reduction initially focused in Russia.
    The United States is committed to provide half that total. The effort
    of our G-8 partners will complement U.S. programs and meets past
    Congressional concerns that we not carry a disproportionate burden.
        I am also pleased to inform you of the substantial progress of the
    Elimination of Weapons-Grade Plutonium Production Program (EWGPP). The
    EWGPP is using best project management practices by applying the
    Department's established directives on project management. On December
    20, 2002, the projects received Critical Decision Zero (CD-0), mission-
    need justification, and we have started the process to procure U.S.
    contractors.
        These contractors will be responsible for oversight, verification,
    and payment to the Russian Federation Integrating Contractor for work
    completed. The U.S. contracts will be performance-based with the award
    fee provisions focusing on successful completion and the ability of the
    U.S. contractor to incentivize the Russian Federation Integrating
    Contractor's performance in meeting or exceeding cost, schedule and
    quality objectives. The U.S. contractor is being selected from a group
    of contractors that have extensive experience in both fossil fueled
    power plants and in Russia. Although the projects will be executed in
    the Russian Federation, using Russian equipment and personnel, we are
    implementing a rigorous oversight plan to monitor the progress through
    a formal project management system.
        With three exceptions, our fiscal year 2004 request is essentially
    the same as last year. Last year, at the President's request, Secretary
    Abraham sought Russian agreement to dispose of additional Russian
    highly enriched uranium. We are nearing agreement on the purchase of
    Russian highly enriched uranium for U.S. research reactors and on
    purchasing downblended uranium from Russian weapons for a strategic
    uranium reserve. We have requested $30 million for this program.
        Second, there has been a $19.7 million increase in the request for
    programs to secure radiological sources that could be used in
    radiological dispersal devices, also known as ``dirty bombs.''
        The largest fiscal year 2004 budget increase, about $272 million,
    supports our plutonium disposition efforts. The United States and
    Russia will each dispose of 34 metric tons of weapons grade plutonium
    by irradiating it as mixed oxide, MOX fuel, in existing nuclear
    reactors. This program is on track. Over 75 percent of the detailed
    design of the U.S. MOX facility will be done this year. Russia has told
    us that it will use the U.S. design for the MOX Fuel Fabrication
    Facility, thus ensuring the programs remain on roughly the same
    schedule. Construction of both the U.S. and Russian MOX Fuel
    Fabrication Facilities will begin in fiscal year 2004.
        I would also like to comment on NNSA's efforts to ensure that
    funding is focused on the highest nonproliferation concerns. Given that
    adverse impacts of terrorists or rogue nations obtaining nuclear
    weapons is intangible, we cannot easily assess risks using quantifiable
    risk analysis methods. However, we have and will continue to conduct
    qualitative risk analyses to determine that we are applying the most
    cost-effective approaches to meet the greatest nonproliferation needs.
        The NNSA recognizes that proliferation is a multifaceted problem,
    and reduces the threat in a multitude of ways.
        We're attacking the problem globally.--The Global Partnership is
    only the most recent example of U.S. cooperation with the international
    community on nonproliferation. International cooperation supports our
    national nonproliferation objectives, and we pursue such cooperation in
    new ways. The suite of NNSA programs promotes greater international
    understanding and adherence to export controls, the application of
    safeguards to secure nuclear materials, and measures to maintain
    regional security in the world's most volatile regions.
        NNSA is improving the physical security of nuclear material.--The
    United States does this primarily through its Materials Protection,
    Control and Accounting (MPC&A) program in Russia, as well as the Newly
    Independent States/Baltics. In fiscal year 2004, this will include
    security upgrades on 24 metric tons of Russian nuclear material and
    1200 Russian Navy nuclear warheads. We will also continue our work to
    ensure the adequate physical protection of nuclear material located in
    40 countries around the world.
        We are improving our work to secure radiological sources and
    prevent their use in ``dirty bombs.''--The International Conference on
    Security of Radioactive Sources delivered a concrete set of findings to
    guide international efforts to gain better control of high-risk
    radioactive sources worldwide. Secretary Abraham's announcement of a $3
    million ``Radiological Security Partnership'' will set in motion a new
    initiative to address potential threats from under secured, high-risk
    radioactive sources.
        NNSA is helping to consolidate nuclear material.--By reducing the
    number of locations where this material is stored, the United States is
    greatly reducing its vulnerability to theft or sabotage. By the end of
    2003, we will have removed all weapons-usable material from 23
    buildings into fewer locations, thus improving security.
        Nuclear material can be reduced.--Fissile Materials Disposition
    conducts activities to dispose of surplus highly enriched uranium and
    weapon-grade plutonium. By disposing of 68 metric tons of plutonium in
    the U.S. and Russia, the plutonium disposition program will reduce the
    threat that this material could pose if acquired by hostile nations or
    terrorist groups. The plutonium will be irradiated as mixed-oxide (MOX)
    fuel in nuclear reactors, making the material no longer readily usable
    for nuclear weapons.
        The production of nuclear material for weapons can be ended.--The
    value of reducing nuclear materials increases greatly if no new
    material is being produced at the same time. The EWGPP discussed above
    aims to accomplish just that by replacing Russia's remaining plutonium
    production reactors with fossil fuel energy plants to meet the energy
    needs of local communities.
        The illicit trafficking of nuclear materials can be slowed.--The
    Second Line of Defense Program and International Nuclear Export Control
    programs focus on cooperative efforts to minimize the risk of illicit
    trafficking of special nuclear material, radiological materials, and
    dual-use technologies across international borders such as land
    crossings, airports, and seaports. Under the fiscal year 2004 budget
    request, the program will continue to target strategic border points
    and transshipment countries around the world for deployment of
    radiation detection equipment while maintaining existing equipment in
    more than 20 countries.
        The threat of the ``Brain Drain'' can be alleviated.--To prevent
    adverse mitigation of WMD expertise, the Russian Transition Initiatives
    (RTI) program commercializes technology and downsizes Russia's weapons
    complex. This approach transforms the former weapons infrastructure
    expertise into commercially viable, peaceful business ventures, and
    shrinks the complex by moving fence lines, closing buildings, and
    providing alternative employment opportunities to weapons experts.
        We can continually improve our ability to detect proliferation.--
    Research and development in proliferation detection provides the United
    States timely detection of potential threats. These technologies are
    key to identifying threats at borders or other critical thoroughfares,
    detecting clandestine proliferation activities, and verifying treaty
    adherence.
        In sum, the United States, with NNSA leading the way, has developed
    programs to address the threat of the proliferation of weapons of mass
    destruction--in all its dimensions.
                                 naval reactors
        Naval Reactors (NR) continues the success it has had for more than
    50 years and is a prime example of how to manage unforgiving and
    complex technology. Our Naval Reactors program, which supports the
    nuclear-powered submarines and carriers on station around the world,
    remains a vital part of the national security mission and the Global
    War on Terrorism. In fiscal year 2004, NR will support 103 reactors in
    82 nuclear-powered warships, including the first-of-a-class reactor
    when the USS VIRGINIA goes to sea. In addition, NR will continue to
    design and develop the reactor for the new transformational carrier
    CVN-21. The NR budget request for fiscal year 2004 is $768 million,
    about a 7 percent increase above inflation over fiscal year 2003. The
    increase will allow NR to begin the development of the Transformational
    Technology Core (TTC) utilizing advanced materials to achieve a
    substantial increase in core energy. TTC will be forward-fitted into
    the VIRGINIA Class submarines, and will result in greater ship
    operational ability and flexibility to meet increasing national
    security demands. This budget increase will also allow maintenance and
    replacement of some of the program's 50-plus-year-old infrastructure as
    well as remediation at sites no longer in use, allowing NR to continue
    its ``clean-as-you-go'' policy.
                 safeguards and security throughout the complex
        Security continues to be one of the NNSA's highest priorities. The
    NNSA's Safeguards and Security program focuses on the protection of our
    people, classified and sensitive information, nuclear and non-nuclear
    materials, and the vital infrastructure of our laboratory and
    industrial production complex. Overall, we have a very effective
    safeguards and security program as validated by internal and external
    independent reviews across our sites and operations. We then use the
    results of these reviews to assess and confirm our security postures
    and areas for improvement. Our fiscal year 2004 budget request
    maintains a robust safeguards and security posture throughout the
    weapons complex to protect our facilities, materials, information, and
    people.
        The request also supports evaluation and assessment of options to
    use cost-effective measures to meet future security requirements. The
    NNSA sites conduct Vulnerability Assessments that include a review of
    potential targets and the identification of the variety of methods that
    an adversary could or might attempt to use against the targets.
    Tabletop exercises, computer simulations, and actual force-on-force
    exercises, conducted both internally and through external independent
    offices, are used to evaluate various scenarios and related options for
    protection.
        In our efforts to assure we have a robust, responsive and adaptable
    security architecture, we have recently been conducting detailed, site
    specific reviews, known as Iterative Site Analyses (ISA). The ISAs are
    analytical, tabletop exercises which address a spectrum of potential
    threats, both within and beyond the Design Basis Threat. The ISA is
    conducted by independent and highly skilled security professionals from
    across the government and private sector. These analytical efforts are
    designed to give decision makers at each site and NNSA Headquarters a
    better understanding of how potential changes in threat and protective
    measures can be factored into actions that improve our system
    responsiveness and overall security posture. The results are then used
    in our risk identification and management efforts that assist in
    determining the safeguards and security program structure and most
    cost-effective investments at each site.
        Immediately following the events of September 11, 2001, NNSA
    initiated a series of efforts to increase our security posture. As a
    result, I am very comfortable with the level of our security complex-
    wide. Most of the increases in our security posture, however, were the
    result of increases in the level of physical protection, mainly guard
    forces. As NNSA looks to the future, it is clear that the threat and
    protection challenges will continue to become more complicated and
    costly. More effort is needed to identify and deploy technologies and
    work procedures that can maintain or improve our security
    responsiveness while reducing physical security force staffing and
    overtime requirements.
        In fiscal year 2004, the NNSA will initiate a modest research and
    development effort to pursue emerging technologies. In addition to our
    historic rate of physical protection upgrades, the modest research and
    development effort will focus on applied technology to define a more
    robust, flexible and cost-effective security architecture across all
    aspects of our work in the coming decade. These areas include earlier
    detection of adversaries, automated response capabilities, better
    coordinated communications, more efficient efforts to delay
    adversaries, better detection of contraband at site perimeters and
    enhanced cyber-security. This relates to both the current
    infrastructure and operations as well as our up-front planning for new
    construction and operations. Early in 2003, we completed an initial
    review of our technology needs and applications. In fiscal year 2004,
    we will complete the gap analysis of needed security efforts, review
    various technologies for near term application, and target areas that
    have the potential for significant long-term contributions. Throughout
    this effort, we will engage with the ongoing efforts and experiences of
    the Department of Energy's other program areas and National
    Laboratories as well as other Federal agencies such as Departments of
    Defense and Homeland Security, to help assure sharing of best practices
    and maximum leveraging of our resources.
                relationship to department of homeland security
        The standup of the NNSA has been shaped by the Nation's response
    over the past eighteen months to the terrorist attacks on September 11,
    2001. Because the NNSA is the steward of the facilities and assets for
    the Nation's nuclear weapons complex, we placed the highest priority on
    addressing urgent, emergent concerns about the safeguards and security
    posture of our nationwide complex of facilities and transportation
    systems. We also upgraded our emergency response assets, which are
    available to be deployed in emergencies around the world. We have
    accelerated research and development on chemical and biological agents,
    and have shared the expertise resident in our laboratories and other
    facilities with other agencies and municipalities as part of the
    expanded focus on homeland security across the government. NNSA has
    contributed research and development and Federal support programs to
    the new Department of Homeland Security (DHS) and provided expertise
    and administrative support for startup of the new department. These
    programs, totaling about $88 million, include research and development
    to counter the chemical and biological threats; nuclear smuggling
    research and development; nuclear assessments program, from MPC&A; and,
    Federal program direction funding in support of these programs.
        The legislation establishing the new Department specified that the
    Nation's radiological response capabilities will remain under the
    direction of the Secretary of Energy and NNSA Administrator. Funding
    for the radiological assets will remain within NNSA's Nuclear Weapons
    Incident Response programs ($90 million in fiscal year 2004). The
    assets will continue to respond to radiological accidents at
    Departmental facilities and will support Federal law enforcement
    activities where nuclear materials may be involved. NNSA's Office of
    Emergency Operations will work cooperatively with the DHS, and, when
    deployed in formally designated situations, the radiological assets
    will take direction from the Secretary of Homeland Security as the Lead
    Federal Agency. A Memorandum of Agreement establishing a framework for
    DHS to access the capabilities of these assets was finalized between
    the two Departments last month.
                          office of the administrator
        Finally, I will summarize the fiscal year 2004 budget request for
    the NNSA Federal workforce, both Headquarters and field. The Office of
    the Administrator account provides the corporate direction and
    oversight of NNSA operations consistent with the principles of
    protecting the environment and safeguarding the safety and health of
    the public and workforce of the NNSA. This account now represents the
    consolidated program direction funds from the former Weapons Activities
    and Defense Nuclear Nonproliferation accounts; the Naval Reactors and
    Secure Transportation Asset activities retain separately funded program
    direction accounts. Our fiscal year 2004 budget request of $348 million
    reflects declining staffing levels and includes about $16 million for
    re-engineering incentives and relocation costs necessary to bring about
    the new NNSA organizational model.
                               management issues
        I would like to conclude by discussing some of the management
    challenges and successes NNSA has faced. The most obvious challenge has
    been the ongoing problems at the Los Alamos National Laboratory. There
    are three specific areas of concern at Los Alamos: improper use of
    government-issued credit cards; potentially fraudulent use of purchase
    orders; and, poor accountability of government property. These problems
    taken together reveal significant weaknesses in business practices at
    the Laboratory.
        As soon as we learned about the extent of these problems this past
    fall, Secretary Abraham and I insisted that the University of
    California, which manages the laboratory for the Department, take
    corrective action. Subsequently, the University has replaced the Los
    Alamos Director and Deputy Director, and demoted or replaced 15 other
    officials. The University also has subordinated business services and
    auditing at the laboratory directly to the University, brought in
    outside firms to conduct detailed audits, and made numerous changes in
    the internal procedures. Generally, we are satisfied with the
    corrective action taken to date. The Secretary has directed the Deputy
    Secretary and me to conduct a review of the future relationship between
    the University of California and the Department. This review will be
    complete by the end of April. In addition, we are compiling a
    comprehensive set of ``lessons learned'' from the Los Alamos problems
    to share with all DOE sites.
        On a more optimistic note, good progress has been made in
    implementing the intent of the Congress in creating the NNSA. The
    National Nuclear Security Administration is in its third year of
    operation, focusing the management of the Nation's nuclear security
    programs through a single organization. The new organization brought
    together the Department of Energy's Defense Programs, Defense Nuclear
    Nonproliferation, and Naval Reactors organizations in a separately
    organized and managed agency within the DOE. The standup of the
    organization has been a complex undertaking, and I am pleased to report
    that NNSA is now fully operational. As a result of our strategic
    planning exercises last year, and the resulting re-engineering of
    program responsibilities and organizations, we are getting a better
    handle on the many diverse components of the NNSA programs. Through an
    emphasis on our new Planning, Programming, Budgeting and Evaluation
    (PPBE) process, we are planning programs with a long-term view,
    budgeting within a firm five-year resource envelope, and managing
    program and budget execution with more discipline, all leading to
    better results for the citizens of the United States.
        On December 20, 2002, the NNSA began a fundamental restructuring of
    its management structure designed to implement the President's
    Management Agenda to create a more effective NNSA. The NNSA of the
    future will build upon the successes of the past by giving outstanding
    people the tools needed for strong and effective management of our
    vital national security mission. This reorganization eliminated a layer
    of Federal management oversight in the field by disestablishing NNSA's
    three Operations Offices at Albuquerque, Nevada, and Oakland; shifting
    the locus of Federal management oversight to eight Site Offices, closer
    to where the actual work is performed; and, consolidating all business
    and administrative support functions into a Service Center to be
    located in Albuquerque to increase overall efficiency. These changes
    were the culmination of nine months of functional and business process
    re-engineering, as first described in the Administrator's February 2002
    ``Report to Congress on the Organization and Operations of the National
    Nuclear Security Administration.'' These management and organizational
    reforms are expected to permit NNSA to achieve significant Federal
    staff reductions of about 20 percent in the nuclear weapons enterprise
    by the end of fiscal year 2004.
        As we continue to implement the NNSA Act, we are particularly
    mindful of the President's Management Agenda to which we are firmly
    committed. We have invested much time and energy over the past year to
    carrying out its five major initiatives. Implementation of a PPBE
    process as NNSA's core business practice is designed to improve budget
    and performance integration throughout the organization. During the
    past twelve months, NNSA has been involved in an intensive effort to
    design and implement a PPBE framework simultaneously with the standup
    of the new NNSA organization. The processes have been designed in-
    house, along the lines of the DOD's PPBS system but tailored to our
    needs. We are adapting processes to address NNSA's emerging
    organization and unique business operations, and working within limited
    administrative staffing levels.
        Budgeting structures are being updated and aligned with management
    structures. We are making excellent progress in finalizing the cascade
    of performance metrics linked from the NNSA Strategic Plan to the
    individual budget and reporting (accounting) codes and contractor work
    authorizations. There is a very significant improvement in the
    Performance Measures across all programs for fiscal year 2004.
    Evaluation is becoming formalized through linkage with the budget, and
    improved by the realignment of roles and responsibilities for program
    managers and financial managers across the complex.
        We are pleased with the early progress of PPBE in becoming the core
    operating philosophy for NNSA. The first year was spent on process
    design, integration of the NNSA programs primarily at Headquarters, and
    in consultations and coordination of our efforts with the DOE Office of
    Management, Budget and Evaluation/Chief Financial Officer and the
    Administration. The DOE Inspector General is currently auditing the
    first year's implementation, with a report expected in late Spring
    2003. Our near term goal is to extend more formalized PPBE roles and
    missions from our Headquarters organizations to the new NNSA Federal
    field structure and the M&O contractors as the NNSA re-engineering
    proceeds during the next 12-18 months. It will take several budget
    cycles and lessons learned to complete the culture change, and to
    properly staff the organization to fully realize the benefits of PPBE.
    The NNSA remains committed to this goal.
        The NNSA also participated in the Administration's Performance
    Assessment Rating Tool (PART) analyses, evaluating four programs that
    encompass about 20 percent of NNSA's annual funding. The PART
    assessment noted that the NNSA programs were well managed and that NNSA
    management was proactively working to make additional improvements to
    program effectiveness and efficiency. Two of the NNSA programs,
    Advanced Simulation and Computing and International Nuclear Materials
    Protection and Cooperation, were rated in the top 5 percent of programs
    government-wide and received the highest PART ratings of ``Effective''
    from the Office of Management and Budget. The PART analysis tool
    embodies and reinforces the PPBE processes and discipline we are
    implementing throughout NNSA. We plan to incorporate the PART
    assessment for all of NNSA's programs as part of our annual Evaluation
    cycle, starting with the fiscal year 2005 budget this summer.
                                   conclusion
        In conclusion, I remain confident that we are headed in the right
    direction. Our budget request will support continuing our progress in
    protecting and certifying our nuclear deterrent, reducing the global
    nuclear danger from proliferation and weapons of mass destruction, and
    enhancing the force projection capabilities of the U.S. nuclear Navy.
    It will enable us to continue to maintain the safety and security of
    our people, information, materials, and infrastructure. Above all, it
    will meet the national security needs of the United Stated in the 21st
    century.
        Mr. Chairman, this concludes my prepared statement. Now, I would be
    pleased to answer any questions that you and members of the Committee
    may have.

        Senator Domenici. I think what I am going to do is go to
    the Admiral and then have a few questions and observations
    before I get to Dr. Beckner.
        Ambassador Brooks. Certainly.
        Senator Domenici. All right. Admiral, might I say before
    you testify, that I am in the process, as part of my own
    recapping of my activities as a Senator, the process of putting
    a book together on nuclear and where we made mistakes as a
    Nation----
        Admiral Bowman. Sir.
        Senator Domenici [continuing]. In not proceeding with
    nuclear power. And I might suggest to you that, right up front,
    I use as an example the safety record of yours, and the fact
    that you now have well over 100 ships at sea with one or more
    nuclear power plants on board. You were denied access to no
    seaport other than one in New Zealand, which means that, for
    those who wonder about the safety or, conversely, the danger of
    nuclear fuel rods, the world has indicated that they permit
    them to move everywhere and anywhere in and about the seas,
    oceans, and seaports, and close to boats and far away from
    them, and nobody seems to be the least bit worried about the
    pollution that certainly would be very apt to exchange if there
    was something amiss, because nothing will carry it better than
    the water.
        Admiral Bowman. Sure.
        Senator Domenici. And it is a perfect setting for, where
    have we gone awry in being so frightened about what to do with
    spent fuel rods and what to do about them? So in that regard,
    much of what you have said and one of the late speeches that
    you made, I think, the year before last, is something we--I
    have been looking at very carefully, and we thank you for that.
        Admiral Bowman. Thank you, sir. I think smart ball for me
    would be to not testify now and just wait for additional
    questions.
        Senator Domenici. We will make your speech a part of the
    record in any event, but, sir, you had better talk.

                          STATEMENT OF FRANK L. BOWMAN

        Admiral Bowman. Well, thank you very much, Mr. Chairman,
    for those kind words and for the opportunity to testify today.
    With your permission, I do have a more detailed statement for
    the record.
        Senator Domenici. Yes, sir.
        Admiral Bowman. Let me also thank you, though, for the
    years and years of support that your committee and you
    personally have continued to provide this program. Without your
    support, that record that you just referred to would have been
    absolutely impossible. We have worked very hard to earn the
    trust and faith that you place in the program, and the citizens
    of this country place in this program. We will continue to do
    what is needed to make sure our nuclear fleet remains deployed
    around the world, fighting terrorism as it is doing right now.
        We all recognize the very serious threats our country faces
    today; some from hostile nations, some from organizations with
    no fixed borders, operating under a veil of secrecy and outside
    the international community.
        Right now, nuclear-powered warships are on the front line
    ready to strike against any threat to the Nation. Nuclear
    propulsion is and has been essential in providing the mobility,
    the flexibility, and the endurance that today's much-smaller
    Navy needs to meet a number of growing global missions. Events
    since September 11, 2001, have continually highlighted the
    value of Naval presence and, in particular, of nuclear power
    for the Navy's major combatants.
        On March 19, 2003, when Operation Iraqi Freedom began, 33
    nuclear-powered aircraft carriers and attack submarines were at
    sea. Three nuclear-powered aircraft carriers were ready to
    carry out the initial strike on Iraq. The U.S.S. Theodore
    Roosevelt, U.S.S. Abraham Lincoln, and U.S.S. Harry Truman, and
    U.S.S. Nimitz were on the way. The opening salvo of Operation
    Iraqi Freedom included Tomahawk cruise missiles launched from
    nuclear attack submarines. We had 10 nuclear attack submarines
    in the Red Sea alone.
        Some of these submarines had been covertly monitoring
    events offshore. By preparing for the attack and providing
    intelligence to national decisionmakers, submarines helped
    integrate the total battleship picture. This is just another
    example of the versatility and flexibility of these nuclear-
    powered submarines.
        Recent U.S. military operations in Afghanistan, along with
    those associated with Operation Iraqi Freedom, re-validated,
    again, the value of these forward-deployed nuclear-powered
    carriers. These very powerful ships are four and a half acres
    of sovereign territory from which we can conduct sustained
    combatant operations and, as you said, without having to
    negotiate staging rights from, or overflight rights over,
    foreign soil. Diplomatic activity over the last year has shown
    how unpredictable and troublesome those issues can be. Nuclear
    power provides the flexibility for these ships to sprint where
    needed and arrive ready for action.
        Many of the impressive capabilities these nuclear-powered
    ships and submarines possess were developed with the funding
    that this committee has supported. The Navy's new Virginia-
    class attack submarine will be delivered this coming summer--or
    summer of 2004, I should say. And the next generation class of
    aircraft carrier, CVN-21, will carry us through the 21st
    century and well beyond.
        Even though these new designs are important, Naval
    Reactors' number one priority is ensuring that the officers and
    sailors at sea operating these plants and defending our
    Nation's interests, are operating in a safe, effective,
    reliable situation. This is where most of Naval Reactors'
    funding goes.
        At the end of 2002, the average age of our nuclear-powered
    ships was 17 years. By 2012, 10 years from then, the average
    age will increase to over 24 years. As these ships age, they
    place a greater and greater demand on my budgets. And as
    critical components and systems fail in service or become
    obsolete and require replacement, the problem gets harder as
    time goes on.
        Since September 11, 2001, the demand for submarines has
    increased by 30 percent. We are trying to make do with the
    numbers we have, which are 54 attack submarines today, by
    running these submarines harder. If we continue to operate at
    today's operational tempo, these submarine reactor cores will
    not last the 30-plus years that we talked about last year.
        In response, and in conjunction with the new core design
    required by shifting to a lower uranium enrichment, Naval
    Reactors has begun work on an advanced transformational
    technology core that the Ambassador referred to, that will
    deliver a significant energy increase to future Virginia-class
    submarines.
        The TTC is a direct outgrowth of the program's advanced
    reactor technology work. It will also be a stepping stone for
    future reactor development. The TTC will use new core materials
    to achieve a significant increase in core energy density; more
    energy in the reactor without increasing the reactor size,
    weight, or space, and at a very reasonable cost.
        The TTC can do one or more of the following: We can extend
    the ship life if we ever go back to the pre-9/11 operating
    tempos, we can maintain the planned 30-plus-year lives if we
    continue on this increased operational tempo, or we can provide
    more power for the weapons and weapons systems of the future.
    It will not require any changes to the Virginia-class submarine
    itself or major designs within the propulsion plant.
        We are trying to do our part to help fill this gap of the
    need for submarines for the country. But this increased tempo
    of operations can only go so far and last so long. We really
    need to buy more submarines. And the only way we can get there
    is to buy submarines smarter, so we can afford more.
        Buying submarines one at a time will not achieve the
    numbers we need for the future, nor is it a cost-effective way
    to buy anything, including submarines. As included in the
    President's budget this year, multi-year procurements coupled
    with buying material and economic ordering quantity, and
    increasing production to two ships per year will provide
    significant savings. I ask for your support of innovative
    contracting approaches.
        Let me talk just very briefly, sir, about this year's
    budget request. Naval Reactors' fiscal year 2004 budget is $768
    million, an increase of some $49 million, 7 percent after
    inflation, compared to fiscal year 2003. The funding increase
    supports this transformational core that I was talking about
    plus accelerated remediation work and facility upgrades.
        The ongoing support of this committee is one of the most
    important factors in Naval Reactors' success story. This
    subcommittee has recognized the requirements and demands of our
    program, our growing need for power projection and forward
    presence far from home which further strains our aging nuclear
    fleet, and the funding required to meet these commitments today
    and into the future.
        The unique capabilities inherent in nuclear power have
    played a vital role over the past 50 years in our country's
    defense. This legacy is strong. It is as strong and vibrant
    today as it ever has been. With your continued support, it will
    continue far into the future. Naval Reactors' record is strong
    as you mentioned, sir, and the work is important, and the
    funding needs, I think, are modest.

                               PREPARED STATEMENT

        Mr. Chairman, also, with your permission, I would like to
    submit for the record the program's annual environmental
    occupational radiation exposure and occupational safety and
    health reports. I thank you for your continued support.
        Senator Domenici. It will be made a part of the record.
    Thank you.
        [The statement follows:]
                     Prepared Statement of Frank L. Bowman
        Thank you for inviting me to testify on Naval Reactors' fiscal year
    2004 Department of Energy/National Nuclear Security Administration
    budget request.
        Let me also thank you for the support you continue to provide my
    Program. I know that with your support, we will continue the success we
    have had for more than 50 years. We have worked hard to earn the trust
    and faith you place in the Program. We will continue to do what is
    necessary to ensure our nuclear fleet remains deployed around the
    world, actively involved in Operation Iraqi Freedom and the Global War
    on Terrorism (GWOT).
        We all recognize the serious threats our country faces today. The
    threats come not only from hostile nations, but also from organizations
    with no fixed borders, operating under a veil of secrecy and outside
    the international community.
        Nuclear-powered warships are on the frontline ready to strike
    against any threat to our national interests and to respond to any
    aggression against the United States. Nuclear propulsion is essential
    in providing the flexibility, speed, endurance, and multimission
    capability that today's smaller Navy requires to meet a growing number
    of global missions.
        Last year, I recounted the events of September 11, 2001, and how
    rapidly nuclear-powered warships were able to get on-station in the
    North Arabian Sea--validating again the value that nuclear power brings
    to our Navy. I discussed the significant contributions that nuclear-
    powered warships made during Operation Enduring Freedom.
        I'm here to tell you this year that as the events of the GWOT and
    Operation Iraqi Freedom unfold, the value of naval presence, and in
    particular of nuclear power for the Navy's major combatants, has been
    continually highlighted.
        Over the past year, U.S. military operations in Afghanistan and the
    Persian Gulf have revalidated and underscored the value of forward-
    deployed nuclear-powered warships. Nuclear-powered submarines have been
    covertly monitoring al Qaeda, providing intelligence to national
    decisionmakers for the GWOT. Keeping track of merchant ships that have
    possible connections with al Qaeda--knowing who's aboard, what the
    ships are carrying, what the names of the ships are, what color they
    are when they go into port, and what different color they might be when
    they come out of port--is all of inestimable value to our Nation during
    the GWOT.
        On March 19, 2003, when Operation Iraqi Freedom began, there were
    33 nuclear-powered warships, both aircraft carriers and attack
    submarines, at sea. Three nuclear-powered aircraft carriers were ready
    to carry out the initial air strikes on Iraq--USS THEODORE ROOSEVELT
    (CVN 71), USS ABRAHAM LINCOLN (CVN 72), and USS HARRY S. TRUMAN (CVN
    75)--with USS NIMITZ (CVN 68) on the way. The opening salvo of
    Operation Iraqi Freedom included Tomahawk cruise missiles launched from
    nuclear-powered attack submarines.
        Nuclear-powered aircraft carriers continue to provide 4\1/2\ acres
    of sovereign U.S. territory from which we can conduct sustained combat
    operations quickly without having to negotiate staging rights on--and
    potentially overflight rights across--foreign soil. Diplomatic activity
    over the last couple of months has shown how unpredictable and
    troublesome these issues can be. Nuclear power enhances these warships'
    capability and flexibility to sprint where needed and arrive ready for
    around-the-clock power projection and combat operations. Sustained
    high-speed capability (without dependence on a slow logistics train)
    enables a rapid response to changing world circumstances, allowing
    operational commanders to surge these ships from the United States to
    trouble spots or to shift them from one crisis area to another. Nuclear
    propulsion helps the Navy stretch available assets to meet today's
    worldwide commitments.
        Again and again, the ability to change from mission to mission is
    demonstrated by our nuclear-powered warships. The versatility and
    flexibility of our nuclear-powered attack submarines and aircraft
    carriers are vital to defending our national interests. As we look to
    the future, new and extremely valuable missions and capabilities are on
    the horizon for nuclear-powered warships. In January 2003, the highly
    successful SSGN GIANT SHADOW experiment onboard USS FLORIDA tested
    strategic concepts and hardware that could double or triple the value
    of submarines while reducing risk to the crews. GIANT SHADOW explored
    how a network of forces--a network including submarines carrying
    unmanned underwater vehicles (UUVs), unmanned aerial vehicles (UAVs),
    and various aerial, underwater, and ground sensors--could be used to
    provide surveillance, collect real-time intelligence, develop and
    recommend a course of action for the joint commander, and launch a
    time-critical strike, including covertly deploying special forces
    ashore. This capability will offer powerful options to force commanders
    for covert surveillance and weapons delivery.
        In our unstable world environment, nuclear-powered warships will
    continue to adapt. They will be ready to meet the changing needs of our
    national security today, and in the future.
                     nuclear power--today and in the future
        A forward-deployed, highly mobile Navy is imperative for the Navy's
    Sea Power 21 in support of our country's global responsibilities and
    obligations. Nuclear power delivers that mobility and delivers the
    endurance that goes with it, both of which are absolutely necessary in
    the world today, and as far out into the future as I can see.
        Many of the impressive capabilities these ships possess were
    developed with funding that was supported by this subcommittee.
        Naval Reactors' number-one priority is ensuring that the officers
    and sailors at sea defending our Nation's interests are operating safe,
    effective, reliable nuclear propulsion plants. This is where most of
    Naval Reactors' funding goes. Today, the Naval Reactors Program
    supports 103 reactors (the same number of reactors that operate
    commercially in this country) in 54 operational attack submarines, 16
    ballistic missile submarines, 2 SSGNs (under conversion), 9 nuclear-
    powered aircraft carriers, 4 training and prototype platforms, and a
    deep submergence vehicle. In addition, we are in the various stages of
    building five more attack submarines and three carriers, and refueling
    four LOS ANGELES-class submarines and one NIMITZ-class carrier.
        At the end of 2002, the average age of these ships was 17 years. By
    2012 the average age will increase to over 24 years (see chart 1). As
    these ships age, they place a greater and greater demand on Naval
    Reactors' DOE budgets as key components and systems obsolesce and
    require replacement.

        Another priority of the Program is designing and developing new
    nuclear propulsion plants to meet the Nation's needs. The Navy's new
    VIRGINIA-class attack submarine will be delivered in summer 2004; and
    the next-generation class of aircraft carriers, CVN-21, will carry us
    through the 21st Century and well beyond. Naval Reactors has begun work
    on an advanced Transformational Technology Core (TTC) that will deliver
    a significant energy increase to future VIRGINIA-class submarines.
        Since September 11, 2001, the Combatant Commanders' demand for
    submarines has increased 30 percent, which validates the need for 68-70
    attack submarines. We are attempting to make do with the numbers we
    have (54 attack submarines today) by running these submarines harder.
    We have increased our transit speed (speed of advance), increased our
    operating tempo (time underway during deployment), and reduced our
    turnaround ratio (which means the non-deployed time divided by the time
    deployed). Before September 11, 2001, our basis for planning had been
    to move these submarines from point A to point B at 16 knots. Today,
    many submarines travel from point A to point B to point C at 20 knots.
    The Navy's planning goals state that we should be operating while
    deployed for 65 percent of the underway time (35 percent in port,
    showing the flag and giving the crew some much needed rest or doing
    some needed maintenance). Instead, most deployed attack submarines are
    now at about 80 percent operational tempo. So we are trying to make
    ends meet, but what's going to give at the end of the day is reactor
    core endurance, because we are burning uranium out of these cores at a
    much faster rate. If we continue to operate at today's level, these
    submarine reactor cores will not last the 30-plus years we had planned.
                       ttc--right core at the right time
        To help meet these ever-increasing national security demands with a
    too-small submarine fleet, Naval Reactors has begun conceptual studies
    on the Transformational Technology Core. The TTC is a direct outgrowth
    of the Program's advanced reactor technology work. It is a stepping
    stone for future reactor development; this development should support
    procurement of the first core in about fiscal year 2008 for insertion
    into a 2010 Virginia Class.
        The TTC will use new core materials to achieve a significant
    increase in core energy density (that is, more energy in the reactor
    without increasing reactor size, weight, or space) and at a reasonable
    cost. The timing of TTC development also corresponds to the need to
    transition from 97 to 93 percent enriched uranium fuel--necessitated by
    the decision to use uranium from retired nuclear weapons as starter
    material for naval nuclear reactors in order to allow shutting down
    U.S. highly enriched uranium enrichment facilities.
        The TTC can do one or a combination of the following:
      --Extend ship life if we return to past usage rate.
      --Increase operating hours per operational year.
      --Increase average power during ship operations, which could enable
            the offboard sensors and UUV/UAV concepts or the higher speed
            of advance discussed earlier
        TTC will also save taxpayers' dollars. Once we achieve the
    submarine force level needed to meet national security requirements,
    increasing ship life will reduce the number of ships we need to buy to
    sustain the force level.
        The TTC is intended for forward fitting in VIRGINIA-class
    submarines, which will be the mainstay of the submarine fleet in future
    decades. We believe the first TTC will be available for installation in
    a 2010 VIRGINIA-class ship; at that time 14 of the expected 30 ships
    will be at sea or under construction. Because the TTC will not require
    a VIRGINIA-class ship redesign, the end result is significantly greater
    operational ability and flexibility. The TTC is truly the right core at
    the right time.
        Although the TTC will help submarines better meet increasing
    operational demands, the only long-term solution to meeting force level
    requirements is to build more submarines. It is imperative that we
    increase the VIRGINIA-class submarine build rate to meet the Nation's
    long-term force level requirement for attack submarines. To that end,
    the President's budget supports one VIRGINIA-class ship per year until
    2006 and then 2 per year in 2007 and 2008.
        The practice of buying submarines one at a time will not achieve
    the submarine numbers we need for the future, nor is it a cost-
    effective way to buy anything, including submarines. This year's
    shipbuilding plan helps the Navy get to where it needs to be by
    procuring two per year starting in fiscal year 2007. In addition, the
    increased production coupled with a multi-year procurement strategy
    that includes material buys in economic ordering quantities will
    provide significant savings (see chart 2).

              fiscal year 2004 department of energy budget request
        Naval Reactors' fiscal year 2004 DOE budget request is $768.4
    million, an increase of $49 million (after inflation) from fiscal year
    2003 to fiscal year 2004. The funding increase supports
    Transformational Technology Core (TTC) development, remediation work,
    and facility upgrades.
      --TTC ($33 million increase).--As discussed earlier, Naval Reactors
            has begun conceptual studies on the TTC to meet ever-increasing
            national security demands caused by a smaller Fleet size and
            higher operating tempo. Based on design core life, continuing
            the current ship operating tempo could reduce the expected
            submarine core life to less than 30 years. The TTC could extend
            ship life beyond 33 years by at least 30 percent if we return
            to the baseline operating tempo, or increase annual operating
            hours or average power output without increasing the current
            size, weight, or space of the current reactor. The TTC will be
            provided at a reasonable cost while enabling the Fleet to meet
            the increasing demand on the operating nuclear-powered ships.
      --Remediation ($10 million increase).--Naval Reactors will continue
            remediation efforts at Program sites in New York, Pennsylvania,
            and Idaho. It is important that we continue our ``clean as we
            go'' policy, to minimize any potential impact on the
            environment or site workers. Over the past few years, older
            facilities have been inactivated at a faster pace than our
            cleanup rate has been able to match, and additional facilities
            will be inactivated over the next several years. Accelerating
            cleanup is necessary to minimize the potential for future
            chemical or radiological releases to the environment, to
            minimize the costs of maintaining idle facilities, and to free
            up central areas at the various sites for future Program use.
      --Facilities ($6 million increase).--Naval Reactors has consistently
            funded facility and infrastructure maintenance within Program
            targets. However, additional funding is necessary to accomplish
            major maintenance and replacement of some of the Program's
            more-than 50-year-old infrastructure, located in New York,
            Pennsylvania, and Idaho. Significant infrastructure work is
            required to ensure protection, preservation, and continued
            reliable operation of Program facilities. Naval Reactors has
            worked within targets to maintain facilities, but the cost of
            necessary work now exceeds current funding.
        Naval Reactors supports the 82 nuclear-powered warships that make
    up over 40 percent of the Navy's major combatants. This responsibility
    includes ensuring safe and reliable operation of reactor plants in
    these ships, enhancing the reactor plants' performance, and developing
    improved reactor plants to support the Navy's needs for the future.
        Sustaining today's 103 operating reactors (the country also has 103
    commercial reactors) requires continual analysis, testing, and
    monitoring of plant and core performance. Nuclear propulsion is a
    demanding technology--the harsh environment within a reactor plant
    subjects equipment and materials to the harmful effects of irradiation,
    corrosion, high temperature, and high pressure over a lifetime measured
    in decades. In addition, naval reactor plants must have the resilience
    to respond to rapidly changing demands for power; be robust enough to
    withstand the rigors of battle and shock and to accommodate ships'
    pitching and rolling; and be safe and easily maintainable by the
    Sailors who must live next to them.
        Naval Reactors' DOE laboratories have made significant advancements
    in components, materials, core lives, and predictive capabilities.
    These advancements allowed the Navy to extend the service life and
    intervals between major maintenance periods for nuclear-powered
    warships and to reduce ship offline time for maintenance. Increasing
    ship availability also increases the Navy's warfighting capability and
    supports the Navy's unplanned surge requirements that we've seen
    recently, while reducing maintenance costs. Added ship availability is
    particularly important in the face of Fleet downsizing because the
    operational demands on each remaining ship continue to increase. In the
    same vein, some development effort is devoted to ensuring that Naval
    Reactors can meet the Navy's need to extend warship lifetime. Longer
    ship lifetimes are achievable because we are able to extend reactor
    plant lifetime. But longer lifetimes require more resources to support
    an older fleet.
        We have been able to extend the lifetime of some existing reactor
    plants because of the robust designs that resulted from solid
    engineering done over the past 50 years. After significant additional
    engineering, we determined that those reactor plants will be able to
    stay in service longer than we had originally intended. The engineering
    work to support those ships in their extended lives will continue
    during that extension. For new reactor core and reactor plant designs,
    we are using the experience of the past 50+ years to incorporate
    improvements into both design and construction. It is imperative that
    we continue to deliver robust designs. It is equally important that we
    do the necessary engineering work now to ensure that those reactor
    plants are able to meet the needs of national defense now, and for the
    next several decades.
        New plant development work at the Program's DOE laboratories is
    focused on completing the design of the next-generation submarine
    reactor for the Navy's new VIRGINIA-class attack submarines, continuing
    the design for CVN-21, and working on the Transformational Technology
    Core. In order to accommodate this work, we have had to throttle back
    on some promising advanced concepts technologies that include high-
    temperature fuel and direct energy conversion.
        The design of the reactor plant for the VIRGINIA-class submarine is
    nearly complete. Shipboard acceptance testing continues. VIRGINIA will
    go to sea early next year and will provide needed capability for the
    Navy at an affordable price.
        The CVN-21 nuclear propulsion plant design is well underway. CVN-21
    is the first new carrier designed since the 1960's NIMITZ class. The
    CVN-21 reactor plant will build on three generations of nuclear
    propulsion technology developed for submarines since NIMITZ. The new
    high-energy reactor design for CVN-21 represents a quantum leap in
    capability. Not only will CVN-21 enable the Navy to meet operational
    requirements of the future, but just as importantly, it will provide
    flexibility to deal with changing warfighting needs in the future.
    Reactor plant design work is on schedule to support the long design and
    manufacturing lead-times of reactor plant components needed for the
    CVN-21 construction schedule.
        Major inactivation work on seven shutdown prototype reactors is
    finished. The four prototype reactors at the Naval Reactors Facility in
    Idaho are defueled and in an environmentally benign, safe layup
    condition; site and reactor plant related remediation work, including
    State-mandated inactivation efforts, is planned for fiscal year 2003
    and future years. Dismantlement and cleanup work at the Windsor site in
    Connecticut is complete, and approval from the EPA and the State to
    release the site for unrestricted future use and property transfer is
    expected in fiscal year 2004. The two shutdown prototype reactors at
    the Kesselring site in New York have been inactivated and defueled, and
    major dismantlement work was completed in fiscal year 2002. Other
    inactivation work is continuing.
        The MARF and S8G prototypes in New York continue to operate to
    train students and provide a test platform for new nuclear propulsion
    plant equipment. There are no near-term plans to inactivate these
    plants.
       naval reactors fiscal year 2004 department of energy budget detail
        Since the early 1990s Naval Reactors' DOE budgets have decreased
    more than 30 percent. The Program's DOE budget has been flat (in real
    terms) from 2000 to 2003. To live within our means over the past
    several years, Naval Reactors has eliminated infrastructure,
    consolidated functions and facilities, revised work practices to become
    more efficient, and downsized the nuclear industrial base. Bettis
    Atomic Power Laboratory and Knolls Atomic Power Laboratory, the
    Program's two laboratories, respectively have the first and the third
    lowest overhead costs as a percentage of total budget out of 30 DOE
    sites featured in the ``fiscal year 2001 Functional Support Cost Report
    of 30 Major DOE Contract Sites.''
        Naval Reactors' technical budget request is categorized into four
    areas of technology: Reactor Technology and Analysis, Plant Technology,
    Materials Development and Verification, and Evaluation and Servicing.
    This approach supports the integrated and generic nature of our DOE
    research and development work. The results of Naval Reactors DOE-funded
    research, development, and design work in the following technology
    areas will be incorporated into future ships, and retrofitted into
    existing ships.
      --The $236.5 million requested for Reactor Technology and Analysis
            will continue design work on both the next-generation reactor
            for the VIRGINIA-class submarine and the new reactor for CVN-
            21, and will ensure the safe and reliable operation of existing
            reactors. The reduction in operating plant maintenance periods
            places greater requirements on thermal-hydraulics, structural
            mechanics, fluid mechanics, and vibration analysis work to
            predict reactor performance more accurately and to identify and
            avoid problems. The continued push for longer life cores means
            that our reactors will have to operate beyond our operational
            experience base for many years to come. Fortunately, improved
            analysis tools and understanding of basic nuclear data will
            allow us to predict performance more accurately and thus better
            ensure safety throughout the extended core life. Other efforts
            in this area include revising core manufacturing processes to
            reduce cost and hazardous waste, performing reactor safety
            analyses, designing advanced control drive mechanisms,
            developing components and systems to support the Navy's
            acoustic requirements, and developing improved shield designs
            to reduce both weight and costs. These efforts support the
            introduction of the Transformational Technology Core, a new
            high-energy core to support increased Fleet operational
            requirements. TTC is a direct outgrowth of the Program's
            advanced reactor technology work and will not only help meet
            national security demands, but also serve as a stepping stone
            for future reactor plant development.
      --The $131.4 million requested for Plant Technology provides funding
            to develop, test, and analyze components and systems that
            transfer, convert, control, and measure reactor power in a
            ship's power plant. Reactor plant performance, reliability, and
            safety are maintained by a full understanding of component
            performance and system condition throughout the life of a ship.
            The request reflects the goal of enhancing steam generator
            performance, which will benefit both CVN-21 and VIRGINIA-class
            steam generators. Development work for improving VIRGINIA steam
            generator performance is needed to meet energy and power
            requirements for the TTC. Naval Reactors is developing
            components to address known limitations or to improve
            reliability of instrumentation and power distribution equipment
            to replace aging, technologically obsolete equipment that is
            increasingly difficult to support. Additional technology
            development in the areas of chemistry, energy conversion,
            instrumentation and control, plant arrangement, and plant
            components will continue to improve reactor performance and
            support Fleet operational requirements.
      --The $137.7 million requested for Materials Development and
            Verification funds material analyses and testing necessitated
            by our having extended the life of our ships beyond the
            original projection. It also funds a portion of Naval Reactors'
            work at the Advanced Test Reactor (ATR), a specialized
            materials testing facility operated by the DOE Office of
            Nuclear Energy, Science, and Technology. Materials in the
            reactor core and reactor plant must perform safely and reliably
            for the extended life of the ship. Testing and analyses are
            performed on the fuel, poison, and cladding materials to verify
            acceptable performance, as well as to develop materials with
            increased corrosion resistance. Testing and development of
            reactor plant materials also ensures reliable performance and
            leads to improvements such as reduced stress in materials and
            reduced potential for cracking.
      --The $161.3 million request for Evaluation and Servicing sustains
            the operation, maintenance, and servicing of land-based test
            reactor plants and part of Naval Reactors' share of the
            Advanced Test Reactor. Reactor core and reactor plant
            materials, components, and systems in these plants provide
            important research and development data and experience under
            actual operating conditions. These data aid in predicting and
            therefore preventing problems that could develop in Fleet
            reactors. With proper maintenance, upgrades, and servicing, the
            two operating test reactor plants and the ATR will continue to
            meet testing needs for quite some time.
              Evaluation and Servicing funds also support the initiation of
            a dry spent fuel storage process line that will allow us to put
            naval spent fuel currently stored in water pits at the Idaho
            Nuclear Technology and Engineering Center and the Expended Core
            Facility at the Naval Reactors Facility (NRF) into dry storage
            at NRF. This process has now begun and will require small
            increases to the Naval Reactors budget request in future years.
            Additionally, these funds support ongoing cleanup of facilities
            at all Naval Reactors sites to minimize hazards to personnel
            and reduce potential liabilities due to aging facilities,
            changing conditions, or accidental releases.
             program infrastructure and administrative requirements
        In addition to the budget request for the important technical work
    discussed above, infrastructure and administrative funding is also
    required for continued operation of the Program. Specifically, the
    fiscal year 2004 budget request includes:
      --Facility Operations.--$57.7 million in funding is to maintain and
            modernize the Program's facilities, including the Bettis and
            Knolls laboratories and the Expended Core Facility (ECF),
            through Capital Equipment purchases and General Plant Project
            upgrades. Because the cost of necessary work currently exceeds
            funding, Naval Reactors has requested an additional $6.0
            million in the fiscal year 2004 budget to help accomplish major
            maintenance and replacement of some of the Program's more-than
            50-year-old infrastructure to ensure protection, preservation,
            and continued reliable operation of Program facilities.
      --Construction.--$18.6 million in funding is to refurbish and replace
            Program facilities. This includes the continuation of the ECF
            Dry Cell project in Idaho, a project that will significantly
            improve Naval Reactors' ability to process naval spent fuel for
            dry storage. (Under a Settlement Agreement signed by the
            Department of Energy, the Navy, and the State of Idaho, Naval
            Reactors spent fuel must be among the early shipments to the
            first permanent repository or interim storage facility.) The
            requested funding also enables the continuation of the
            Cleanroom Technology Facility.
      --Program Direction.--$25.2 million in funding is to cover Naval
            Reactors' 186 DOE personnel at Headquarters and the Program's
            field offices, including salaries, benefits, travel, and other
            expenses. This staff maintains oversight of the Program's
            extensive day-to-day technical and administrative operations,
            while continuing to ensure compliance with growing
            environmental, safety, and other regulatory requirements--all
            of which, notwithstanding our excellent record, necessitate
            substantial effort.
                         president's management agenda
        The President's Management Agenda promotes efficiency and
    improvement. All Federal agencies are adopting and implementing the
    initiatives where feasible. Naval Reactors has a proven track record of
    results, especially within the following two areas of the President's
    Management Agenda:
    Budget and Performance Integration
        Naval Reactors planning leads to well-documented, quantifiable,
    proven accomplishments. The Program consistently meets midterm and end-
    of-year goals. Milestones and research outputs are clearly linked to
    the long-term Program goals of supporting operating naval nuclear
    propulsion plants, providing new propulsion plants to meet national
    security requirements, and maintaining outstanding environmental
    performance.
        Naval Reactors' comprehensive multi-year planning process requires
    all Program activities to identify performance indicators clearly. This
    process ensures that the Program continually meets or exceeds its
    performance goals.
    Better R&D Investment Criteria
        Naval Reactors work builds on existing generic technology and as
    such is evolutionary in nature. For general development efforts, the
    Program's multi-year planning process helps measure progress and
    ensures that goals are achieved. During reviews, competing lines of
    research are evaluated to ensure that the highest priority work is
    accomplished within existing resources. Each individual development
    effort has clear starting and ending points, with established
    milestones and off ramps. All plant types benefit from development work
    targeted at specific platforms--including work on new, advanced plant
    types, which could benefit existing submarines and aircraft carriers.
              performance measurements, goals, and accomplishments
        Naval Reactors has a long history of operating with the highest
    levels of integrity and operational accountability. Our husbanding of
    taxpayer dollars provided by this subcommittee is well recognized. Last
    year in forwarding the President's fiscal year 2003 budget request to
    you, the Office of Management and Budget (OMB) rated Naval Reactors as
    ``Effective''--the highest rating on OMB's scale--and noted: ``Outputs
    are identifiable and make key contributions to national security.
    Delivery schedules are consistently met. Contracts have positive and
    negative incentives, and include performance requirements.''
        Furthermore, in a report dated December 12, 2001, the General
    Accounting Office recognized Naval Reactors' strong performance within
    DOE and NNSA. The report stated: ``The Office of Naval Reactors, which
    is a part of NNSA, has long been recognized as having a focused
    mission, strong leadership, clear lines of authority, long-serving
    employees, and a strong set of internal controls, as well as a culture
    that enhances accountability and good control over its costs and
    contractor performance.'' The Naval Reactors Program has always been
    dedicated to continual improvement. We use semiannual reviews of short-
    and long-range plans to rebaseline work and revisit Program priorities.
    Monthly financial reports from contractors are used to compare actual
    performance against Projected performance. Additionally, Naval Reactors
    Headquarters maintains close oversight of its Management and Operating
    contractors through periodic reviews, formal audits, and performance
    appraisals.
        For the fiscal year 2002 end-of-year performance results, my
    Program met or exceeded all major performance targets. We ensured the
    safety, performance, reliability, and service life of operating
    reactors for uninterrupted support of the Fleet. We exceeded 90 percent
    utilization availability for test reactor plants. By the end of fiscal
    year 2002, U.S. nuclear-powered warships had safely steamed over 124
    million miles. Naval Reactors developed new technologies, methods, and
    materials to support reactor plant design, which included surpassing
    the fiscal year 2002 goal of 96 percent design completion of the next-
    generation submarine reactor. We initiated detailed design on the
    reactor plant for the next-generation aircraft carrier, which is on
    schedule to meet the planned ship construction start. Additionally,
    Naval Reactors maintained its outstanding environmental performance--no
    personnel exceeded Federal limits (5 rem per year) for radiation
    exposure, and program operations had no adverse impact on human health
    or the quality of the environment.
        Naval Reactors expects to meet or exceed all fiscal year 2003
    performance targets, which are to achieve 90 percent utilization
    availability for operation of test reactor plants; to exceed 126
    million miles safely steamed; to complete 99 percent of the next-
    generation submarine reactor; to complete 55 percent of the CVN-21
    reactor design; to continue ensuring that no personnel exceed 5 rem per
    year of radiation exposure; and to have no adverse impact on human
    health or the quality of the environment.
                                   conclusion
        The ongoing support of the Senate Appropriations Committee
    Subcommittee on Energy and Water Development is one of the most
    important factors in our success story. The subcommittee has recognized
    the requirements and demands the Program confronts daily: a growing
    need for power projection and forward presence far from home, which
    strains our dwindling number of nuclear ships; an aging nuclear fleet;
    and the funding required to meet these commitments today and in the
    future.
        The unique capabilities inherent in nuclear power have played a
    vital role over the past 50 years in our Nation's defense. This legacy
    is as strong and vibrant today as it ever has been. With your support,
    this legacy will continue far into the future as the Nation meets each
    new threat with strength and resolve. Naval Reactors' record is strong,
    the work important, the funding needs modest.
        I thank you for your support.

        Senator Domenici. Perhaps we will just proceed rather
    quickly with the next witnesses. I do not think it will take
    too long.
        Okay, Dr. Beckner.

                         STATEMENT OF EVERET H. BECKNER

        Dr. Beckner. Mr. Chairman, members of the subcommittee, it
    is a pleasure to be here this afternoon to review several
    significant programmatic accomplishments.
        As Ambassador Brooks has highlighted, the stockpile
    stewardship program has allowed us again this year to certify
    to the President that the nuclear weapons stockpile is safe,
    secure, and reliable. And at this time, there is no need to
    resume underground testing.
        Using the cutting-edge scientific and engineering tools of
    stewardship, we have a more complete understanding of the
    condition of the stockpile with each passing year. We annually
    withdraw approximately 100 weapons from the active stockpile
    and perform a comprehensive diagnostic exam of the weapons at
    the Pantex plant. This examination studies the hundreds of
    parts that make up the weapon. While most of these weapons are
    reassembled and returned to the services, several are subject
    to destructive evaluation, providing us additional insights
    into the health of the stockpile.
        To ensure that the existing stockpile continues to meet its
    military requirements, the NNSA also has a comprehensive
    refurbishment program known as stockpile life extension where
    we are presently working on four warhead types in the enduring
    stockpile, the W-76, W-87, B-61, and the W-80. This program
    designs, builds, tests, and installs new subsystems and
    components, thereby extending the operational service life for
    those warheads. For example, we have already refurbished the
    parts from nearly three-quarters of all W-87 warheads for the
    Air Force. NNSA is also restoring the full suite of
    manufacturing capabilities needed to respond to any stockpile
    contingency.
        As you can see, while we are maintaining and refurbishing
    the stockpile, with each passing year it is getting to be a bit
    harder to do so. In fact, it now appears that by the year 2020
    or so, we will have refurbished every weapon in the stockpile.
        Returning to the present, as members of this committee are
    aware, we are installing an interim pit production capability
    at Los Alamos. Within the next few weeks we expect Los Alamos
    to deliver a W-88 pit, as Ambassador Brooks stated. It will
    meet all quality manufacturing requirements for use in the
    stockpile. It will be the first certifiable pit made by the
    United States since the shutdown of Rocky Flats in 1989.
        To obtain a better permanent manufacturing capability NNSA
    has begun work on design and siting for a modern pit facility
    that will be capable of manufacturing all pit types for the
    current stockpile and any new requirements that we can
    reasonably foresee should they arise.
        To complete the material supply story, NNSA has recently
    restarted wet chemistry operations at the Y-12 plant in Oak
    Ridge, Tennessee, to produce highly-enriched uranium metal. And
    further, we will begin producing new tritium for the stockpile
    by irradiation of tritium-producing rods at a TVA reactor this
    fall. To complete the story on tritium, in concert with the
    Defense Department, we have adjusted the tritium production
    plans to reflect changes resulting from the MPR and the Moscow
    Treaty.
        Critical to many aspects of stewardship is the role of
    secure transportation. Again, this year, this organization of
    Federal agents has safely and securely moved nuclear weapons,
    nuclear components, and special nuclear materials over a
    hundred million miles without serious accidents or compromise
    of cargo. Our agents, many of them veterans of the armed
    services, are highly skilled and authorized to use deadly force
    in the performance of their duties.
        But stewardship is more than maintenance and refurbishment;
    it is also about the future. With the support of the Congress,
    we are investing in leading edge scientific and engineering
    tools required to support the stockpile now and into the
    future.
        Three areas deserve special mention. First, the Advanced
    Scientific Computing Initiative, ASCI. Over the last several
    years we have deployed several world class super computers:
    White at Lawrence Livermore, Q at Los Alamos, and Red Storm at
    Sandia. These machines are working full-time to address SFIs
    and to support the important life extension work I mentioned
    earlier.
        Late next year we will begin to take delivery of two even
    more capable machines including the largest and most capable
    machine in the world, a 100 TeraOPS machine at Lawrence
    Livermore National Laboratory. This suite of capabilities is
    allowing us to solve critical weapons assessment problems that
    only a few years ago were impossible.
        Two, the Dual Access Radiographic Hydro Test Facility at
    Los Alamos, called DARHT, is providing CAT-scan-like images of
    weapons implosion processes. This facility is proving to be
    even better than we anticipated in providing critical
    hydrodynamic data to validate the ASCI codes. Increasingly,
    this facility will become our workhorse for the study of ultra-
    high density hydrodynamics, providing data previously available
    only from full-scale testing.
        And three, I am also pleased to report that the National
    Ignition Facility at Lawrence Livermore National Laboratory
    continues to make excellent progress in meeting and even
    exceeding its technical milestones. On March 6, laboratory
    scientists delivered four beautiful beams of ultraviolet laser
    light into the target chamber well ahead of schedule. Stockpile
    stewardship experiments in the NIF will begin in fiscal year
    2004.
        Now, let me say a few words about the changes we are
    planning in the fiscal year 2004 budget submission in response
    to the Nuclear Posture Review and the threats this country
    faces today. To ensure that future American presidents have
    deterrent options to deal with these threats, we are proposing
    a modest increase in the advanced concepts program in 2004.
        The most significant elements of that program will be the
    Robust Nuclear Earth Penetrator, RNEP, which was mentioned
    previously. As you know, this program will be conducted jointly
    with the Air Force to examine whether or not one of two
    existing warheads in the stockpile, the B-61 or the B-83, can
    be sufficiently hardened, packaged, and delivered to allow the
    weapon to survive penetration into various geologies and
    attack-hardened, buried targets with high reliability. The
    remaining $6 million of advanced concepts funds will be divided
    between the weapons labs for studies of other new concepts.
        Mr. Chairman, that concludes my remarks. I would be pleased
    to answer your questions.
        Senator Domenici. Thank you very much.
        Mr. Baker, it is good to have you back.

                         STATEMENT OF KENNETH E. BAKER

        Mr. Baker. Thank you, it is always a pleasure to brief you,
    sir, on our program----
        Senator Domenici. Thank you.
        Mr. Baker [continuing]. And the opportunity to give you,
    sir, our 2004 budget request.
        NNSA's nonproliferation activities are central to the Bush
    administration's national strategy to combat weapons of mass
    destruction. NNSA continues to be committed to the
    nonproliferation mission as reflected in the breadth of our
    programs to address nonproliferation concerns in Russia, other
    former Soviet states and, increasingly, throughout the world.
        The nonproliferation challenge is multidimensional, and our
    budget request addresses the challenges on many fronts and in
    many places. While much of our work is with Russia, we are
    taking global commitments to address global threats.
        September 11, 2001, and the aftermath have made it clear
    that the threat comes not only from so-called rogue states, but
    some national terrorist organizations that may take any
    imaginable step to pursue their ruthless ends. The threat can
    come from any region and can take many forms. So we need to
    address it broadly.
        Our 2004 request, as Ambassador Brooks has stated, is 31
    percent above last year's appropriation. Most of the money is
    in three areas. First, the United States and Russia are nearing
    agreement on purchasing Russian highly-enriched uranium for
    research, U.S. research reactors, and down-blending uranium
    from Russian weapons for its strategic uranium reserve. We have
    requested $30 million for this initiative. This is in addition
    to the approximately 170 metric tons of weapons usable material
    already blended down and sent to USEC.
        The largest fiscal year 2004 budget request is about $276
    million that supports our plutonium disposition program. The
    United States and Russia will each dispose of 34 metric tons of
    weapons-grade plutonium by irradiating it in mixed oxide, MOX,
    fuel in existing nuclear reactors. Russia has told us that they
    will use the U.S. design for the MOX fuel fabrication facility,
    thus ensuring the programs remain roughly on the same schedule.
    Construction of both U.S. and Russian MOX fuel facilities is
    scheduled to begin in fiscal year 2004.
        We have also requested a small increase in another program
    to fund the IAEA additional protocol, and to help the IAEA
    verify the extent and dismantlement of foreign clandestine
    nuclear programs.
        With this background, sir, I would like to touch on a broad
    range of programs that we will pursue to support the
    President's nonproliferation agenda with your help. We are
    working with the global partners to reduce the proliferation
    threats. For example, the global partnership against the spread
    of weapons of mass destruction, formed at Kananaskis summit in
    June 2002, has recommitted the G-8 nations to increase greatly
    the assistance to the nonproliferation, disarmament,
    counterterrorism and nuclear safety area. The partnership has
    pledged to provide $20 billion over the next 10 years for the
    nonproliferation and threat reduction in Russia and elsewhere.
    The United States will provide half of that money.
        We are working with the international community to better
    secure high-risk radioactive sources that can be used for dirty
    bombs. Six weeks ago, Secretary Abraham presided over an
    international conference on this issue which was attended by
    750 participants and 124 countries, far beyond our
    expectations. And I think there could be no better symbol on
    how seriously this world takes the dirty bomb. There is much to
    be done and the fiscal year 2004 request is $36 million for
    this purpose.
        We are continuing to provide physical security of nuclear
    material through the IAEA, through bilateral arrangements, such
    as materials protection control and an accounting program in
    Russia. In fiscal year 2004 this will include security upgrades
    to approximately 24 additional metric tons of Russian nuclear
    material and 1,200 Russian navy nuclear warheads, in general.
    We expect to be complete with security improvements to the
    under-secured weapons usable material in 2008, about 2 years
    ahead of schedule.
        While we have included a request for $24 million to address
    the under-secured nuclear warheads at the strategic rocket
    forces, NNSA has sought not to increase an overall budget for
    Russian MPCEA. The pace of the program is now primarily
    governed by Russia's ability to absorb assistance and by access
    arrangement, now that we have our funding.
        We are consolidating nuclear materials into Russia by
    reducing the number of locations where the material was stored
    and thereby reducing its vulnerability to theft and sabotage.
    By the end of 2003, we will have removed all weapons usable
    materials from 23 buildings, reducing the total number of
    buildings where there is such material from 75 to 52. Over time
    this number will decrease more.
        The NNSA will help to end the production of Russian nuclear
    material that could be used for nuclear weapons. Just a few
    weeks ago, Secretary Abraham and Minister Rumyantsev signed a
    key agreement that paved the way for the NNSA to work with
    Russia to shut down the three plutonium reactors that are still
    producing weapons-usable plutonium. These reactors, located at
    Seversk and Zheleznogorsk will be replaced with fossil fuel
    energy plants to meet energy needs of the local Russian
    communities.
        Additionally, our export control and second line of defense
    programs are minimizing the risk of illicit movement of
    radiological materials and WMD-related dual use commodities
    across international borders. Under a new initiative called
    Megaports, we will improve our ability to detect and stop
    illicit traffic--transfer of such materials in major transfer
    hubs around the world.
        Additionally, Mr. Chairman, a program that you started many
    years ago continues to be more and more effective every day.
    And that is our program to prevent the adverse migration of WMD
    scientific expertise from Russia. This program funnels former
    weapons scientists, their expertise into some commercially
    viable area and peaceful business ventures, and shrinks the
    complex from moving fences, from closing buildings, and for
    other alternate forms of employment.
        We have been continually improving our ability to detect
    proliferation of timely potential targets through our robust
    R&D detection program. Research and development of
    proliferation detection provides the United States timely
    detection of potential threats. Our R&D efforts are key to
    identifying threats at critical thoroughfares, detecting
    clandestine perverse proliferation activities and verifying
    treaty adherence.
        In summary, we in the NNSA are addressing the threat of
    proliferation of weapons of mass destruction in all dimensions.
    I am proud of the work we do and more proud of the men and
    women that spend weeks and months away from their family and
    the comforts of their home and work this tireless mission as
    fast as they can.
        Mr. Chairman and Senator Reid, also, I want to thank you
    for the years of support for these programs. With your help and
    your continued help, we are making this country a safer place.
    Thank you, sir.
        Senator Domenici. Thank you very much. I am going to submit
    a number of questions for you all to answer in perhaps 2 weeks,
    an adequate time.
        I just want to say how thrilled I am to listen to the
    testimony, to hear about the progress being made in some areas
    that just a few years ago I never thought we would ever be
    involved in. And to hear the progress in MOX and that the
    Russians are now going along with it, we are both going to be
    doing the same thing with reference to that program, is just
    incredible. I never thought we would be there. There is a
    substantial amount in the budget to proceed with dispatch in
    that regard.
        And, Mr. Ambassador, I note that much discussion today
    about NNSA and I just want to continue to urge that you move
    ahead wherever you can to make the transition total. And you
    are--you are moving as fast as you can toward making the NNSA
    the semi-autonomous agency contemplated by the statute, and
    Senator Reid complimented you today and complimented it today.
    I am pleased to hear that. And you know of my insistence that
    once we have that statute drawn, that you proceed to live with
    it and move in that direction as rapidly as you can. I note the
    testimony here today by NNSA on many fronts is very good, and I
    am very proud of it.
        A couple of observations. I wanted to say, Admiral, believe
    it or not, in another committee here in the Senate, the
    Authorizing Committee for Energy and Natural Resources, just
    today we approved as part of a new energy--comprehensive energy
    bill, the creation of a testbed for the United States to begin
    the development of a brand new nuclear reactor for civilian
    use, a model, with many new characteristics which will make
    even the latest of our light water reactors appear to be an
    ancient, ancient mariner. And that will have a 10-year program
    development which, hopefully, agencies as far as yours will
    participate in helping them move ahead rapidly. It is not
    intended to be a production reactor. It is intended to be a
    model of the kind that could be used by America or the world as
    the next generation of energy producers that would have many
    things that the current reactors do not have; passivity in
    terms of the physics of the instrument; many things that worry
    people, it is as safe as could be even today, even to make them
    better. That is going to be approved from what I can tell by
    the Congress as a new activity.
        That is pretty visionary and it is long overdue, but in the
    environment that you and I lived in the last 15 years, it is
    something we probably would never have expected to happen.
        Admiral Bowman. Yes, sir.
        Senator Domenici. In terms of the war we are in right now
    and the aftermath of it, I can just surmise, not knowing
    anything specifically, but I would think our President would be
    very excited about moving ahead rapidly in some of the areas
    that you were describing to us here today. It is obvious to me
    that he is going to be interested in taking an international
    lead in getting weapons of mass destruction more under control
    in the world. And I am sure that as he asks about that, he will
    find that within the Department of Energy many of the things
    that he is going to want to be doing, the groundwork is there
    for him to take the leadership in the world. I am very, very
    pleased about that.
        Dr. Beckner, I appreciate your testimony about NIF. I only
    hope you are right. It has been so wrong early on that I am
    almost tempted to call a separate hearing on NIF just to make
    sure that I get it straight and that they get it straight. But
    I did note your testimony and I will reread it.
        In summary, it is on schedule and as an expert and
    supervisor you were saying it is probably going to do what it
    was intended to do, is that correct?
        Dr. Beckner. That is correct.
        Senator Domenici. It is not just going to have these rays;
    they are going to do what they are supposed to do?
        Dr. Beckner. Yes, sir.
        Senator Domenici. They are going to be hot enough when we
    are finished to do it?
        Dr. Beckner. There is every reason to believe so at this
    time.
        Senator Domenici. As an aside, I was just going to ask:
    What do either of you think about the Z machine at Sandia? I
    assume we have another reading out of it. I imagine it is
    another rather incredible instrumentality out there.
        Dr. Beckner. It continues to perform very well.
        Senator Domenici. And what will it be used for?
        Dr. Beckner. Well, among other things, we are looking at
    whether we may be able to do some plutonium hydrodynamics
    experiments with it now. It remains to be seen if that will be
    possible, but that is one of the new possibilities. So we are
    encouraged by that.
        Senator Domenici. It certainly is an example of an
    achievement of high significance, so I assume it will be used
    for something great.
        Dr. Beckner. Certainly.
        Senator Domenici. Is that a fair assessment?
        Dr. Beckner. Of course. Yes, sir.
        Senator Domenici. Just because NIF is coming along does not
    mean we should throw it away. The reverse might have been true
    had we known about it.
        I cannot think of anything else, other than that I will
    submit questions. Did you want to make any other observations,
    Mr. Ambassador, having heard the testimony or heard my ad-
    libbing up here, blithering so to speak?
        Ambassador Brooks. No, sir. Except to say, again, how much
    all of my colleagues and I appreciate both the committee's
    support and your strong personal support for these programs
    over the years.
        Senator Domenici. I think we are making some headway with
    the OMB. It is a good-looking budget for a change. We do need a
    little bit more money in some areas.
        We are--incidentally, Mr. Baker, on the issue of the
    Megaports and the machines, we had asked for an extra $150
    million for that program, knowing that we are ready to go and
    that there is some in the budget but not enough. It is still
    there waiting to be decided as one of the issues. If that
    happens, then we will not have to squeeze the budget so much.
    We will have received that money in a supplemental for some of
    the activity you are referring to.
        Mr. Baker. Thank you very much, sir.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. We are asking for more than is in the
    budget in our supplemental request.
        [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
                        safeguards and security funding
        Question. The NNSA has a unique and challenging security
    environment because of the special nature of our mission and the many
    tons of material and weapons under our control. Security costs
    throughout the Department have been increasing for years, and
    particularly in the aftermath of September 11. And now that are country
    is at war with Iraq, the security condition has been raised to the
    higher ``orange level'' security condition. As a result of this,
    Senator Reid and I, with great help from Senator Stevens, last week led
    the fight here in the Senate to add significant sums to the fiscal year
    2003 supplemental to cover projected heightened security costs that the
    Department did not budget for. What threat level or security condition
    did you assume in developing the fiscal year 2004 budget request?
        Answer. The Department and the NNSA implement and maintain our
    Security Condition based upon the Homeland Security Advisory System
    developed by the Department of Homeland Security. For instance, our
    Security Condition 3 (SECON 3), which corresponds with Homeland
    Security ``Number 3 Elevated Condition (Yellow),'' was anticipated for
    routine day-to-day security operations during fiscal year 2004 and was
    used for budget development.
        Question. Will it be sufficient if the Department remains at
    Security Condition 3 for all of fiscal year 2004?
        Answer. Yes, that was the minimum baseline because of the present
    world-wide tension.
        Question. Are there investments we could make today that would
    dramatically reduce operational security costs over the next few years?
    If so, please provide specifics for the record.
        Answer. Yes, we believe that there are ways in which we can
    increase the efficiency of security operations, and we are working on
    them. For instance, we are working with other agencies striving to
    identify advanced technologies to maintain or improve security at
    reduced costs. Additionally, we will continue to review our physical
    and cyber protection measures by assessing vulnerabilities and
    protection strategies, and identifying common cost effective solutions
    for all NNSA sites. We are also working with the Department of Energy,
    Office of Security, to expedite security clearances for individuals
    who, when cleared, will reduce our guard force overtime costs. In
    addition, our sites continue to evaluate changes in their operations,
    such as consolidation of nuclear material and changes to security
    perimeters that can provide increased detection and assessment
    capabilities.
                    overall budget for stockpile stewardship
        Question. Could you use additional resources in these areas if they
    were provided?
        Answer. The Stockpile Stewardship Program (SSP) is planned and
    budgeted for by the NNSA Planning, Programming, Budgeting, and
    Evaluation/Execution (PPBE) system, which establishes a formal,
    resource-constrained baseline for the SSP. Within the 5-year planning
    horizon of the Future-Years Nuclear Security Plan, workload has been
    prioritized to fit this resource-constrained baseline.
        Question. What are some of the highest priority tasks that you will
    not be able to achieve within the requested budget?
        Answer. Because of the way in which the NNSA budget is formulated,
    particularly the programming part of the PPBE system, SSP's highest-
    priority needs are addressed in the fiscal year 2004 budget request.
                                    tritium
        Question. The NNSA is preparing to spend over $500 million on a
    Tritium Extraction Facility over the next few years in South Carolina.
    The project is not going particularly well and last year its cost was
    re-estimated to increase 25 percent. What is the status of the Tritium
    Extraction Facility project?
        Answer. A new baseline for the cost and schedule of the Tritium
    Extraction Facility construction project (98-D-125) was approved by the
    Deputy Secretary on February 24, 2003, following independent management
    reviews. The total project cost is $506 million and the facility will
    be operational by July 2007. When measured against the new baseline, to
    date, the project is on schedule and spending is within the planned
    profile.
        Question. Given a possible change in tritium requirements as a
    result of the Moscow Treaty and other arms reductions, what is the date
    that we must resume tritium production? (Note: We don't need tritium
    until well beyond 2012 now.)
        Answer. Taking into account the Moscow Treaty, the NNSA plans to
    initiate tritium production in October 2003 by irradiating several
    hundred tritium-producing rods in the Tennessee Valley Authority Watts
    Bar reactor until March 2005. Those rods will then be stored until the
    Tritium Extraction Facility is ready to begin extraction operations in
    fiscal year 2007. The NNSA will continue to use the Watts Bar reactor
    to irradiate rods and to operate the Tritium Extraction Facility. There
    are no current plans to use either of the Sequoyah reactors in the
    foreseeable future.
        This low-tempo operating approach has advantages over a scenario
    that would delay the start of tritium production. First, this approach
    yields the earliest demonstration that tritium capabilities have been
    restored, which, in turn, enhances the confidence of NNSA and the
    Department of Defense, thus reducing the need for a 5-year tritium
    reserve. Reducing or eliminating the reserve would be a significant
    factor in reducing tritium production requirements. Second, the
    continuing low-tempo plan is the best way to ensure that tritium-
    production experience is gained by maintaining the current government
    and commercial capability base, thus eliminating the need for costly
    reestablishment efforts in the future. This approach has been briefed
    to the Nuclear Weapons Council.
        We need tritium well before 2012. The lead time to produce tritium
    to meet currently projected requirements is 3 to 5 years. Under NNSA's
    current plan, the rate of tritium production will increase by fiscal
    year 2008 in order to ensure that minimum projected stockpile
    requirements are satisfied.
                                 pit production
        Question. Ambassador Brooks or Dr. Beckner, we have had many tough
    conversations about the pit program over the years, and I have had to
    work hard to add tens of millions of dollars over the last several
    years to get it on track. As you know, I have always felt that our
    ability to demonstrate our ability to rebuild this very important
    weapons component was a key test of the stockpile stewardship program.
    I understand we have, or will soon achieve an important milestone of
    progress. Can you give the subcommittee an update on where we are on
    pit production?
        Answer. The Department of Energy/NNSA recognizes that manufacture
    and certification of a W88 pit is a pivotal element of the Stockpile
    Stewardship Program. As such, the NNSA has worked with Los Alamos
    National Laboratory (LANL) to projectize the pit manufacturing and
    certification campaign to ensure a disciplined process. The result of
    this effort is that Los Alamos has completed the manufacture of the
    first certifiable W88 replacement warhead pit in April 2003. This is
    the first step to establish a capability to manufacture 10 pits per
    year at Los Alamos in fiscal year 2007. Initially, Los Alamos will only
    manufacture W88 pits and processes to manufacture other pits will be
    developed at both Los Alamos and Lawrence Livermore National Laboratory
    in fiscal year 2009.
        Question. When do you expect you will be able to certify the first
    pit? (Note: Los Alamos produced its first ``certifiable pit'' this
    week. The internal milestone was to have it done by April 30.)
        Answer. Los Alamos National Laboratory (LANL) is currently
    scheduled to certify that W88 pits manufactured at LANL will meet W88
    warhead requirements in fiscal year 2007. This success-oriented fiscal
    year 2007 schedule requires that non-nuclear experiments and analysis
    remain on track. Because the W88 pit is scheduled to be certified
    without a nuclear test, a new level of precision in pit manufacturing
    and certification must be established. This precision is essential to
    ensure high confidence in stockpiled W88 warheads that would use a Los
    Alamos manufactured pit.
                                 supercomputing
        Question. Ambassador Brooks or Dr. Beckner, as you are well aware,
    this subcommittee has raised a number of questions about the direction
    of the ASCI supercomputing program within NNSA. A particular point of
    concern is the way in which the platform acquisition strategy has been
    in a state of constant change over the last several years. The original
    ASCI acquisition schedule (circa 1995) proposed the acquisition of the
    following platforms at a projected total program cost of $1.7 billion
    from 1996 through 2001:
      --1 T--1997;
      --3 T--1998;
      --10 T--2000;
      --30 T--2001;
      --100 T--2003.
        Actual costs during that period were approximately $2.9 billion.
    Furthermore, the platform acquisition schedule continues to change. As
    of today, NNSA has acquired or is planning to acquire the following:
      --3 T--Red (SNL);
      --3 T--Blue Mountain (LANL);
      --3 T--Blue Pacific (LLNL);
      --12 T--White (LLNL);
      --20 T--Q (LANL);
      --40 T--Red Storm (Sandia);
      --100 T--Blue Jean (LLNL).
        Is the current ASCI approach the most cost-effective and efficient
    manner of achieving the desired capability and capacity?
        Answer. We believe that the current approach has provided the
    Stockpile Stewardship program with effective and efficient computing
    cycles. High-end computing solutions emerging over the past year,
    principally the advent of low-cost, high-performance Linux clusters,
    are providing us opportunities to obtain even more cost-effective
    machines for smaller jobs.
        All of the ASCI platforms have been acquired through competitive
    procurements, and in every case the machines have been brought in for
    the amount we have budgeted. We have met all of our planned schedules
    for the deployment of these computer platforms, except for the Q
    machine at Los Alamos, which was downsized due to Congressional budget
    reductions. The increase in the ASCI budget in the 2001 timeframe was
    not caused by a change in our platform acquisition strategy. Instead,
    increased program costs were caused by the merger of original ASCI with
    the old Stockpile Computing program and by the inclusion of several new
    program elements, including code verification and validation, distance
    computing, visualization, and University Alliances.
        Question. What are the mission requirements driving the ASCI
    program?
        Answer. The ASCI program, together with a vigorous experimental
    program, is an integral part of the Stockpile Stewardship program. ASCI
    provides the simulation capability, both software and hardware, to
    enable decision-making to support the existing and future nuclear
    weapons stockpile. Activities supported include annual assessment for
    all current stockpile systems, resolution of significant findings
    (SFIs), peer review and independent assessments, design and analysis of
    weapons-related experiments and requirements for facilities, resolution
    of technical issues affecting the production complex, nuclear test
    readiness, the ability to respond rapidly to new military or design
    requirements, and the development and validation of advanced physics
    models and codes for more fundamental understanding of weapons physics
    to reduce uncertainty in system margins and respond effectively to
    future issues or significant findings that may arise.
        Question. How much capacity is needed and when is it needed over
    the next 10 years?
        Answer. Our current acquisition strategy reflects the capacity
    needs given to us by our weapons designers. However, the early success
    of our code projects has increased demand for computer cycles beyond
    our initial projections. We are in the process of reevaluating our need
    for these cycles and extending our strategy through the end of the
    decade.
        Question. What is the maximum capability required in the top ASCI
    platform, and when, over the next 10 years?
        Answer. Since the inception of the ASCI program, the 2004 objective
    has been to produce a supercomputer operating environment capable of
    performing high-fidelity, three-dimensional weapons calculations at a
    resolution sufficient for confident prediction of weapon behavior. In
    1995, this appeared to be an ambitious and risky undertaking. ASCI
    progress to date shows that we will be able to perform such
    calculations at the rate of about one per month on a 100 Tera OPS
    machine. As the nuclear weapons stockpile continues to age, the
    challenges will grow ever more complex demanding greater computing
    capabilities and faster turnaround times. We estimate that a 1-2 Peta
    OPS (quadrillion operations per second) system will be required. We
    believe that machines of this size will be technically feasible and
    affordable near the end of the decade based on the continuing pace of
    technology advances.
        Question. Was the NNSA wise to abandon custom-designed chips and
    vector architecture for much cheaper, commodity chip-based, massively
    parallel systems?
        Answer. The designers and engineers at the weapons laboratories are
    using the ASCI machines to solve weapons related problems that only a
    few years ago would have been impossible to solve. We did not make a
    decision to abandon custom-designed chips and vector architectures. The
    only bids we received on our early procurements were for massively
    parallel machines based on commodity microprocessors. During this
    period, the single U.S. vendor of vector architectures was purchased by
    another company, and their vector machines were not available. Only
    within the past month or so has a U.S. vendor been capable of
    delivering a vector machine. We hope to see this architecture bid
    competitively in our future procurements, and we are eager to see
    whether there are applications for which this technology provides a
    cost-effective solution.
        Question. What level of customization is needed for the various
    government interests in supercomputing (e.g. weapons design, molecule
    modeling and simulation, cryptanalysis, bioinformatics, climate
    modeling)?
        Answer. We believe that computer architecture diversity is healthy
    for the United States scientific community and the Nation. Different
    scientific applications are unlikely to perform with high efficiency on
    a single architecture. Through our Advanced Architecture and
    Pathforward programs, we are currently supporting development of custom
    architectures that we believe will yield effective performance for
    weapons simulations and a large number of related scientific
    applications for the Department of Defense. We do not have enough
    experience with other applications, including cryptanalysis,
    bioinformatics, and climate modeling, to be able to predict what
    architectures are best suited to those problems.
        Question. How effective are the current or planned ASCI platforms
    in addressing the requirements of the program?
        Answer. Our platforms are performing well, albeit they are
    oversubscribed. They are being used to address relevant stockpile
    issues in closing Significant Finding Investigations, certifying
    weapons components, and supporting Stockpile Life Extensions and peer
    reviews.
        Question. Are there alternative architectures, interconnect
    technologies, systems software and tools, or other approaches that will
    result in improved performance for future ASCI platforms?
        Answer. The answer, as with all technology dependent programs, is
    yes. We have a long history of exploring, identifying and funding
    technologies that help improve the performance of future platforms.
    When better technologies become available, we would like to retain
    enough flexibility in our procurement strategy to be able to take
    advantage of them.
        Question. If so, can industry supply the required alternative
    architecture and software, i.e. is industry properly incentivized? Or,
    must government lead the development of alternatives?
        Answer. The computing industry is driven by market forces of which
    high end computing represents a very small share. Nevertheless, our
    investments have an impact out of proportion to our market share. We
    have been extremely successful with our Pathforward program, which has
    benefited the broader high-end computing community and is acknowledged
    as a successful approach to incentivizing industry. Although the
    funding for this program element is not as robust as in past years,
    ASCI continues to make investments in Pathforward with industry
    partners.
        Question. As it relates to the ASCI mission requirements, what is
    the cost/benefit of investing more heavily in capacity now, and
    deferring acquisition of capability machines, thereby taking advantage
    of the falling price/teraflop?
        Answer. Our procurement strategy has provided cost-effective
    supercomputers to our weapons designers and code teams. We are
    investing heavily in the development of 3-D, high-fidelity physics
    applications, which are addressing urgent stockpile issues. Effective
    use of these applications by weapons designers will be impossible
    without our largest platforms, and delays will severely limit our
    ability to address these issues promptly.
                              modern pit facility
        Question. Ambassador Brooks or Dr. Beckner, the NNSA is planning on
    building a modern pit production facility that would come on line in
    2019. Dr. John Foster has suggested that the NNSA should have a
    significantly more flexible and accelerated approach that would allow
    you to have a modular facility on line as early as 2010. Will you
    update us on this project?
        Answer. The Department has not made a final decision to proceed
    with a Modern Pit Facility to ensure long-term pit production to meet
    the needs of the United States nuclear stockpile. However, a Critical
    Decision-0 (CD-0) on mission need relative to a Modern Pit Facility
    (MPF) was made in May 2002. This decision enabled the start of the
    National Environmental Policy Act (NEPA) process, including preparation
    of an Environmental Impact Statement (EIS) and conceptual design of a
    MPF in fiscal year 2003. A preferred site will be announced in that
    document. The Department plans to issue a Record of Decision (ROD) in
    2004. The ROD will be based on the MPF Environmental Impact Statement
    and other factors such as cost and technical considerations.
        Question. How much more would it cost if you used a flexible/
    modular approach suggested by Dr. Foster?
        Answer. We are currently utilizing a modular approach and are
    developing a range of costs relative to that approach. If it is
    determined that it is necessary to accelerate the project, the costs
    will likely rise in the early years of the project.
        Question. Are you still planning on making a siting decision as
    early as December of this year?
        Answer. We are committed to a Record of Decision milestone of April
    2004. However, our goal is to arrive at the Record of Decision earlier.
                    facilities and infrastructure initiative
        Question. Ambassador Brooks or Dr. Beckner, 2 years ago I was very
    pleased to work with Chairman Reid in getting the Facilities and
    Infrastructure rebuilding effort underway with $200 million. For fiscal
    year 2004, you have requested a total of $265 million. The state of the
    complex had too long been a neglected issue. But last year, this
    committee's focus on infrastructure was reaffirmed in the Nuclear
    Posture Review--which concluded that we must have a flexible and
    responsive nuclear weapons enterprise in order to meet the challenges
    of an uncertain and unpredictable threat environment. However, I am
    still concerned about two points. Past evidence put before this
    committee indicated we needed to be spending an additional $300 to $500
    million per year for the next 15 or so years to refurbish the weapons
    complex. Why have you requested significantly less?
        Answer. The fiscal year 2004 budget request of $265 million is
    substantial and will support some 150 Recapitalization, Facility
    Planning, and Facility Disposition projects that will provide capital
    renewal and sustainability, with an emphasis on deferred maintenance
    reduction. Facility Disposition projects will reduce the footprint of
    the complex by approximately 325,000 gross square feet. From the turn
    of the century, the fragile condition of the nuclear weapons complex
    has been described in a series of internal and external assessments.
    The Foster Panel, Chiles Report, the DOE Inspector General, the Defense
    Department, and the NNSA comprise the reports in the series.
    Independently, each concluded that the complex is old, with half of the
    facilities 40 years or older; and, to restore the complex to an
    acceptable condition, substantial additional annual funding was needed,
    on the order of some $300 to $500 million for about a decade. In
    addition, all agreed that although money is important and needed,
    strong structured management, absent in the past, is as important.
        Two components dominate the NNSA's corporate management approach--
    securing the appropriate level of funding, and rigorous management.
    Current funding levels meet NNSA's planned facility requirements and
    are approved by the OMB, and most importantly, the Congress. In
    addition, improved management of the infrastructure is developed and
    implemented through integrated management tools that include the Ten-
    Year Comprehensive Site Plans (TYCSP), Project Execution Plans, a well-
    structured Planning, Programming, Budget, and Evaluation process, upon
    which is determined the longer view of program needs described in
    NNSA's Future-Years Nuclear Security Program (FYNSP). The request for
    resources shown in the FYNSP seeks annual incremental increases of
    about $50 million building to $500 million in fiscal year 2008. The
    NNSA believes that growth of the Facilities and Infrastructure
    Recapitalization Program is building in accordance with the changing
    culture regarding improved facilities management and the ability to
    successfully execute the funds provided. The program has 2 years of
    full funding experience, is proceeding according to plan, and has a
    number of impressive successes to its credit.
        Question. Secondly, if we are ever going to effectively reduce the
    maintenance backlog, we must stop contributing to the backlog. My
    review of the budget requests for regular maintenance of facilities is
    still below what is needed. So while we are trying to reduce the
    maintenance backlog through the F&I program, we are adding to it by
    under funding regular maintenance. Do you agree with my contention?
    Please respond.
        Answer. The Readiness in Technical Base and Facilities (RTBF)
    Operation of Facilities budget identified in the Future Year Nuclear
    Security Plan (FYNSP) in conjunction with the Facility Infrastructure
    Recapitalization Program (FIRP) budget is adequate to maintain the
    complex in a safe, secure, and compliant status. The President's fiscal
    year 2004 request for RTBF proposes an overall increase of 7.4 percent
    and a 4.2 percent increase for Operations of Facilities. The RTBF
    program is committed to ensuring its facilities have responsible
    maintenance programs and adequate funding to support the mission. NNSA
    has established a goal of stabilizing (i.e., zero growth) the program
    facility deferred maintenance backlog by fiscal year 2005 and to reduce
    it to industry standard levels (or better) by fiscal year 2009. RTBF
    will fund the complex at an adequate level; this will enable (FIRP) to
    execute its deferred maintenance reduction responsibilities and help
    recapitalize the complex.
        Historically, the maintenance backlog has not been measured
    consistently through the application of consistent direction across the
    complex. In fiscal year 2003, NNSA has taken action to assure
    consistent application of standardized definitions to create a
    ``corporate'' business process and allow the establishment of a
    baseline. Until this was done, it was not possible to understand the
    magnitude of what is needed. In fiscal year 2004 and beyond, NNSA will
    track funding of maintenance and measure the maintenance backlog to
    assure that actual progress is being made. With these tools and
    measures in place, NNSA can and will ensure that maintenance is not
    under funded.
        Question. Will you update the committee on the Facilities and
    Infrastructure Initiative?
        Answer. The effort to restore the nuclear weapons complex began as
    the Facilities and Infrastructure (F&I) Initiative. Upon congressional
    authorization, the F&I Initiative became the Facilities and
    Infrastructure Recapitalization Program. The physical infrastructure of
    the nuclear weapons program is managed by NNSA within a corporate
    facilities management framework, which is designed to stabilize the
    deferred maintenance backlog, improve the complex through facility
    upgrade and new construction, while at the same time reducing the
    footprint of our facilities through elimination of excess facilities,
    yielding an operationally more economical, revitalized enterprise. The
    general NNSA approach is that daily operations and maintenance to
    ensure the availability of facilities and infrastructure essential to
    the Stockpile Stewardship mission are principally funded within the
    Readiness in the Technical Base and Facilities (RTBF) program. Capital
    renewal and sustainability are the focus of the Facilities and
    Infrastructure Recapitalization Program. Capital acquisition (line
    items) is managed across several program areas, in accordance with an
    Integrated Construction Program Plan.
        The mission of the Facilities and Infrastructure Recapitalization
    Program (FIRP) is to restore, rebuild, and revitalize the physical
    infrastructure of the nuclear weapons complex. The program applies new
    direct appropriations to address an integrated, prioritized series of
    repair and infrastructure projects that will significantly increase the
    operational efficiency and effectiveness of the NNSA weapons complex
    sites. The FIRP mission is an integral component of the NNSA Strategic
    Goal to provide state-of-the-art facilities and infrastructure
    supported by advanced scientific and technical tools to meet
    operational and mission requirements. The Nuclear Posture Review
    discussed the need to revitalize the nuclear weapons complex as the
    third leg of the New Triad of our national nuclear strategy. The
    Facilities and Infrastructure Recapitalization Program was established
    specifically to address these concerns and assure that the NNSA
    continues to meet its major performance objectives of ensuring the
    vitality and readiness of the national security enterprise.
        Base maintenance and infrastructure efforts at NNSA sites are
    primarily funded within Readiness in Technical Base and Facilities
    (RTBF)/Operations of Facilities and through site overhead allocations.
    These efforts focus on ensuring that facilities necessary for immediate
    programmatic workload activities are maintained sufficiently to support
    that workload. FIRP addresses the additional sustained investments
    above this base for deferred maintenance and the infrastructure that
    are needed to extend facility lifetimes, reduce the risk of unplanned
    system and equipment failures, increase operational efficiency and
    effectiveness, and allow for recapitalization of aging facility
    systems. FIRP also manages utility line items. This capital renewal and
    sustainability focus is the core mission of the Facilities and
    Infrastructure Recapitalization Program.
        A major metric for the recovery of the facilities and
    infrastructure of the nuclear weapons complex is the reduction of the
    NNSA's deferred maintenance, currently in excess of a billion dollars.
    The NNSA has committed to stabilize its deferred maintenance by the end
    of fiscal year 2005. Additionally, by the end of fiscal year 2009 the
    NNSA has committed to reduce deferred maintenance to within industry
    standards and return facility conditions for mission essential
    facilities and infrastructure to an assessment level of good to
    excellent (deferred maintenance replacement plant value less than 5
    percent). FIRP will provide the major funding, and management effort,
    to achieve this reduction.
        A separate but vital sub-program is Facility Disposition. This
    congressionally directed effort requires that at least $50 million of
    the FIRP funding be used each year to dispose of excess facilities that
    will provide the greatest impact on reducing long-term costs and risk.
    In the near term, this has meant focusing on footprint reduction. The
    facility disposition effort not only frees high value real estate to
    enable the modernization of the complex, but also provides NNSA the
    foundation to manage the entire range of its excess facilities
    portfolio. The NNSA is committed to reduce the nuclear weapons complex
    footprint by 3 million gross square feet of excess space by 2009. FIRP
    will provide the major funding and management effort to achieve this
    reduction.
        Embedded within the FIRP program management is the NNSA commitment
    to congress to demonstrate credible deliverables, efficient management,
    and fiscal accountability. The program's funding significantly ramps-up
    over the next several years until it reaches the level determined by
    the NNSA, and external reviews, required to restore the nuclear weapons
    complex and ultimately return the condition of the complex to industry
    standards by fiscal year 2009.
        The NNSA is committed to responsible and accountable facility
    management processes, including budgetary ones, so that the condition
    of NNSA facilities and infrastructure is maintained equal to or better
    than industry standards. This integrated corporate long-term goal,
    encompassing improved facilities management and significant additional
    funding, will ensure the recovery and subsequent sustainment of the
    nuclear weapons complex.
        Question. What have you accomplished, and where do we need to go in
    the future?
        Answer. The backdrop for the restoration of the weapons complex is
    set in the following remarks/commitments made by General Gordon to the
    Congress:
      --Infrastructure is aging, in some cases failing. (HASC Oversight
            Panel--11 July 2000)
      --Cannot let our infrastructure decay . . . it's potentially
            dangerous, it sends wrong signal . . . (HASC Oversight Panel--
            11 July 2000)
      --Are we under invested in facilities? . . . today I am positive of
            the answer: we are under invested by a lot. (Senate Water and
            Energy Subcommittee, Senate Appropriations Committee--13 March
            2001)
      --The facilities that underpin the American nuclear deterrent require
            immediate attention, on the order of $500 million a year for at
            least the next 10 years. (Senate Water and Energy Subcommittee,
            Senate Appropriations Committee--13 March 2001).
        General Gordon's early compelling argument, and successive
    semiannual status reports to the authorization and appropriations
    committees, prompted Congress to authorize $8.7 million in fiscal year
    2001, $197 million in fiscal year 2002, and $243 million in fiscal year
    2003 for the Facilities and Infrastructure Recapitalization Program to
    begin the restoration of the nuclear enterprise. With 2 years of full
    funding, the significant achievements of the Facility and
    Infrastructure Recapitalization Program (FIRP) are as follows:
      --Established advocacy for facilities--the third leg of the New Triad
            of our national nuclear strategy
      --Defined corporate facilities management, as an embedded concept in
            NNSA strategy, planning, facility restoration,
            recapitalization, and revitalization of the nuclear enterprise
      --Introduced commonality and standardization regarding facility
            management and accountability
      --Championed a corporate facility management data base (FIMS)
      --Introduced a graded approach to life-cycle facility management
      --Established an approach to facility budgeting
      --Established a ``first time ever'' complex-wide prioritized project
            listing
      --Developed criteria for priority approach to sifting requirements on
            a ``worst first'' basis
      --Embedded comprehensive long-term planning (Ten-Year Comprehensive
            Site Plan (TYCSP))
      --Established formal Federal review process
      --Limned facility stewardship:
        --Established facility complex baseline conditions
        --Built performance measures to track conditions
        --Developed a prioritization and integration process for project
                selection
        --Established desired steady state goal for complex-wide facility
                condition
      --Established fiscal visibility and accountability:
        --Established financial visibility--both direct and indirect
        --Established financial benchmarks
        --Developed and promulgated Federal facility budget guidance
        --Instituted institutional general plant projects for laboratories
        --Established the recapitalization program controlled by work
                authorizations and baseline change control
      --Instituted procedural improvements:
        --Periodic and independent reviews of program
        --Performance measures/performance evaluation management plan/
                laboratory appraisal plan
        --Developing return on investment strategies/best practices such as
                the multi-site--Roofing Repair Pilot Program
        --Established strategic professional linkages--National Research
                Council's Federal Facilities Council, civilian industry's
                APPA; and the Energy Facilities Contract Group (EFCOG) as
                well as within the DOE
      --Conceived the FIRP in three parts--recapitalization, facility
            planning, and facility disposition
      --Established FIRP performance indicators for reduction of the
            backlog of deferred maintenance and reduction of the complex's
            facility footprint
      --Established annual targets for achieving performance goals
      --Managing FIRP with fiscal responsibility within FYNSP constraints
      --Defined achievable targets for program execution in fiscal year
            2002 and fiscal year 2003--$440 million
      --Managing projects in accordance with a graded approach to meeting
            DOE Order 413.3
      --Faithfully adhere to the ``what and how'' approach to headquarter
            and field responsibilities
      --FIRP is executed through Federal field validation for baseline
            credibility, fiscal and legal accountability
      --FIRP requires identification of site-specific Stockpile Stewardship
            Program supporting projects
      --FIRP is managing to the parameters of a construction year--
            obviously different than the fiscal year cycle
      --Receiving wide-spread recognition for performance of Federal and
            M&O staffs--congressional report language
      --Congress continues to fund at growth levels established in Calendar
            Year 2000.
        With regard to the future, the formula remains, leadership support
    within the NNSA, measurable results; Departmental support, OMB support,
    and most importantly, continued support of the Congress. Corporate
    facilities management is embedded at each of the eight sites,
    performance measures on a par with industry standards management of the
    backlog of deferred maintenance projects is occurring, the footprint is
    shrinking ahead of plan, and the NNSA is performing within its means.
    NNSA is positioned to be able to adequately maintain the vital ``Third
    Leg of the New Triad'' of the Nation's nuclear posture.
                            nonproliferation budget
        Question. To Ambassador Brooks or Mr. Baker: I am pleased to see
    the broad and specific goals of your nonproliferation program continue
    to receive strong support from the Administration. Overall, I believe
    you have a pretty good budget for fiscal year 2004. How would you
    characterize your progress in the Nuclear Nonproliferation programs?
        Answer. We are making good progress toward achieving our goals and
    objectives. We have had many successes in our programs, have
    accelerated our efforts in protecting nuclear materials, and are now
    aggressively ramping up several new cooperative programs and
    initiatives, as follows:
      --On March 12, we signed agreements with the Russian Federation to
            initiate our work on the Elimination of Weapons-Grade Plutonium
            Production in Russia. This will allow us to begin work with our
            Russian partners to close down the last three operating
            plutonium production reactors in Russia.
      --In a major development in reciprocal U.S. and Russian plutonium
            disposition efforts, the Russians have recently agreed to the
            U.S. design for their mixed oxide (MOX) fuel fabrication
            facilities. Construction should begin next year.
      --We have recently begun cooperative work with Russia's Strategic
            Rocket Forces in order to improve the security of their nuclear
            warheads and we are providing security upgrades at two sites to
            which the Russian Ministry of Defense has permitted DOE access.
            We anticipate work on additional proposed sites in the future.
      --We are working toward the goal of completing the materials
            protection, control and accounting (MPC&A) upgrades by 2008 at
            which point we will enter a sustainability phase and transition
            to Russian ownership of the programs.
      --We have initiated a project to equip foreign seaports with
            radiological and nuclear detection systems to pre-screen
            containers destined for U.S. ports.
      --In our efforts to engage Russian weapons scientists in commercial
            activities, our Russian Transition Initiative program has
            secured over $90 million in private venture capital, in
            addition to industry matching funds that bring in $3 for every
            $2 invested by the U.S. Government.
      --We are supporting U.S. Government participation in the G-8 Global
            Partnership that involves the United States committing $10
            billion of nonproliferation funds to be matched by $10 billion
            from the international community over the next 10 years.
        These are just some of the programs and projects we are working on.
        Question. How many sites did you protect last year compared to
    previous years?
        Answer. We expect to significantly increase the number of sites
    protected under more extensive or comprehensive MPC&A upgrades than in
    previous years. We will complete comprehensive upgrades at an
    additional 8 sites in fiscal year 2003 verses 4 sites in fiscal year
    2002, raising the total number of sites protected with comprehensive
    upgrades to 48. In fiscal year 2004, we will complete comprehensive
    upgrades at an additional 7 sites raising the total number of fully
    protected sites to 55.
        Question. What, if anything, is needed to ensure the success of
    this program?
        Answer. We believe that the strategies we are pursuing within our
    panoply of programs fully supported by the President and reflecting the
    outcome of the recent review of nonproliferation programs by the
    National Security Council are significantly reducing the WMD
    proliferation threat to the United States. However, I would like to
    stress the importance of the full and continued congressional funding
    for the Department's programs. I am grateful for the cooperation from
    Congress and look forward to continuing that cooperation as we advance
    our shared national security objectives. It is also essential that we
    enjoy full and complete cooperation from our international partners,
    such as Russia, in breaking down bureaucratic barriers to program
    implementation and take further steps to accelerate our efforts there.
    I also believe that success in working with our G-8 partners to advance
    our Global Partnership objectives will be essential to future success.
        NNSA's nonproliferation mission and responsibilities set forth in
    the National Nuclear Security Administration Act are broad enough to
    encompass our conduct of nuclear nonproliferation activities outside of
    Russia. However, we are seeking to clarify in the National Defense
    Authorization Act for fiscal year 2004 that NNSA has the requisite
    authority to conduct its International Nuclear Materials Protection and
    Control Program not only in the former Soviet Union but in other
    countries where the risks of proliferation of weapons of mass
    destruction, materials, and technology also threaten the security of
    the United States.
                         materials protection in russia
        Question. Ambassador Brooks or Mr. Baker, I had an opportunity to
    visit yesterday with Minister Alexander Rumyantsev, the Russian
    Minister of Atomic Energy. We talked about many of our nuclear
    nonproliferation programs of common interest. I reassured him of my
    strong support for the programs, but I also raised with him my concerns
    that we were still not making progress as fast as we should and are not
    getting the access necessary to ensure our tax dollars are being
    properly spent. But he raised another issue of concern--that the legal
    agreements that form the basis of our cooperative efforts would expire
    this summer, and that our governments were having trouble renegotiating
    the agreements. That is potentially an issue of great concern. Will you
    comment first on the access issue--are we getting what we need to
    provide security upgrades in Russian production facilities storing the
    greatest amounts of nuclear material?
        Answer. Our efforts to secure materials in Russia are proceeding
    well. We have made significant progress with the Russian Ministry of
    Atomic Energy (MinAtom), especially at ``civilian'' facilities with
    less stringent access restrictions imposed by MinAtom. In fact, we are
    finishing work at the first large MinAtom fuel processing facility, the
    Luch facility, this spring. Luch was the site of the attempted theft of
    HEU by a facility insider several years ago. We expect to complete at
    least 2 additional large MinAtom facilities next year (Novisibirsk &
    IPPE in Obninsk). Consequently, this part of our program is in the
    process of downsizing as work is completed.
        Work at sensitive MinAtom facilities continues, but the pace is set
    mostly by the time it takes to overcome access restrictions more than
    anything else. We are making progress at these sites--contracts for
    upgrades have and will continue to be signed at places like Tomsk,
    Krasnoyarsk-26, Mayak, and C-70 as the year progresses. We are
    achieving concrete results with the MOD as well. Last year we completed
    negotiations for upgrades at the majority of the remaining sites in the
    RF Navy believed to require comprehensive upgrades. This is another
    area of our program that will be scaling down in the next couple of
    years--assuming the RF Navy does not introduce additional sites where
    upgrades are justified. However, our work with the Strategic Rocket
    Forces (SRF) is just underway, and we should be seeing increased
    activity in this area over the next few years.
        We will continue to focus our efforts on providing upgrades to
    sites containing materials of concern that we have access to in order
    to reduce the threat as quickly as possible, while we negotiate access
    to the remaining weapons sites.
        In our Nuclear Cities Initiative program, we have had no problems
    with access since signing an access arrangements document last year.
    The Russian side does still have some difficulty figuring out how it
    will provide access to foreign companies that want to own land and
    property in Russia. That has made it a little more difficult than we
    would like getting Western businesses to invest unreservedly in Russia,
    but the regional and municipal authorities, and MinAtom itself, are
    working to develop various proposals that will satisfy both the Western
    private sector and Russian security requirements.
        Question. Also, what are you doing to ensure this important work is
    not stopped because of a failure to get proper legal agreements?
        Answer. The bilateral agreements that govern our MPC&A activities
    do not expire until 2006. These include the U.S/Russian Cooperative
    Threat Reduction umbrella agreement and the 1999 Agreement. We will
    start the renegotiation process well in advance of this deadline. In
    the case of the NCI Government-to-Government Agreement, which is set to
    expire at the end of this September, we have received a letter from
    Minister Rumyantsev requesting extension of the Agreement for another
    5-year term, without making any changes to the current text. However,
    the Administration is reviewing the liability protection in this
    agreement, which may impact our ability to extend it. We are working
    with the Russians and our interagency colleagues to identify ways to
    solve this problem.
                    mpc&a outside of the former soviet union
        Question. Ambassador Brooks or Mr. Baker, historically the focus of
    our nonproliferation programs has been almost exclusively on the former
    Soviet Union. And Russia certainly remains the largest source of
    nuclear materials which could become potential threats to our security.
    But the events of the last 2 years have certainly shown us threats
    exist all over the globe. What nonproliferation problems and
    opportunities do you see outside the former Soviet Union?
        Answer. While true that our programs focus on Russia, it's also
    true that for many years we have engaged in a variety of
    nonproliferation efforts around the world. Those nonproliferation
    efforts continue today and have in fact expanded since September 11th.
    As you correctly point out, there are several countries outside the
    former Soviet Union, for instance in South Asia, that raise important
    nonproliferation issues. In that context, there may be opportunities
    for mutually beneficial exchanges that could lead to enhancements in
    the security of nuclear weapons, weapons-usable nuclear material,
    radiological material, and the prevention of illicit nuclear/
    radiological material from crossing borders. In some key cases, we have
    not fully engaged these countries because they remain outside the Non-
    Proliferation Treaty and we are therefore constrained somewhat by law
    and policy with respect to how we can assist them.
        Question. What do you need in terms of money or agreements in order
    to begin addressing those threats?
        Answer. The recent fiscal year 2003 Supplemental Appropriations
    included $15 million for nonproliferation work outside of the former
    Soviet Union. That should be sufficient to continue our longstanding
    engagement with these countries. However, if initial efforts in areas
    such as South Asia lead to large programs of direct assistance in these
    areas, additional resources would be required. We will be in a better
    position to identify the required funding level once the scope of such
    work has been more clearly defined and the U.S. Government has
    completed its evaluation of what types of security assistance are
    desirable and permissible.
        NNSA's nonproliferation mission and responsibilities set forth in
    the National Nuclear Security Administration Act are broad enough to
    encompass our conduct of nuclear nonproliferation activities outside of
    the FSU. However, we are seeking to clarify by means of the fiscal year
    2004 National Defense Authorization Act that NNSA has the requisite
    authority to conduct its International Nuclear Materials Protection and
    Control Program not only in the states that resulted from the former
    Soviet Union but in other countries where the risks of proliferation of
    weapons of mass destruction, materials, and technology threaten the
    security of the United States.
        Beyond that, the legal requirements, like the funding requirements,
    will very much depend on the attributes of the country in question and
    the scope of work proposed. We will certainly keep you informed as
    these activities proceed.
        Question. I remember that in Russia, early progress was
    accomplished on a scientist-to-scientist basis through the so-called
    ``lab-to-lab'' approach. Is the original ``lab-to-lab'' approach being
    revisited to encourage progress in some of the countries that may
    present threats?
        Answer. Yes, in many countries we have found direct exchanges
    between technical experts to be a valuable tool of engagement.
    Specifically with respect to countries outside the former Soviet Union,
    we will use this approach in combination with other vehicles to engage
    on sensitive nonproliferation issues.
                     russian plutonium disposition program
        Question. Ambassador Brooks or Mr. Baker, I am pleased to see us on
    the cusp of constructing facilities in the United States and Russia to
    finally carry out the disposition of up to 34 metric tons of plutonium
    in each of our two countries. However, I remain concerned about the
    schedule and our ability to begin construction in Russia in fiscal year
    2004. I don't say that because you are not doing everything you can, I
    just say it because the job is very hard. Among the obstacles still out
    there are securing all of the $1 billion in international financing for
    construction, getting the right legal agreements in place, and finding
    another $1 billion to finance the operations of the MOX plant. How are
    we coming on those issues?
        Answer. For the construction phase of the Russian plutonium
    disposition program, pledges thus far total $800 million, leaving a
    $200-million shortfall. We believe that the remainder of funding
    necessary for construction will be obtained shortly. As for the
    operations phase of the program, there are a number of non-government
    funding sources that could be used for this purpose, including receipts
    from the exports of Russian MOX fuel and displaced uranium fuel, cross-
    subsidies from other Russian programs and Russian domestic MOX fuel
    sales. In many cases, these are heavily dependent upon future
    developments in the Russian and international nuclear industries and
    markets, which are not predictable at the present time. Nonetheless, we
    believe that a combination of these revenue sources could be used to
    fund some or all of the operations phase of the disposition program.
        In addition to obtaining funding, we have recently made significant
    progress in developing a multilateral structure that allows for
    bilateral U.S.-Russian program management. We are also working to adapt
    the detailed design of the U.S. facility for use in Russia and to reach
    agreement on licensing arrangements that will permit Russia to use
    Cogema MOX technology for its MOX facility. Once the key details of
    these efforts are decided, we can begin to set up the necessary legal
    implementing documents.
        Question. What confidence do you have that we can stay on schedule?
        Answer. We expect to begin construction of both the U.S. and
    Russian MOX facilities in fiscal year 2004. Russia's recent
    announcement to use the design of the U.S. MOX facility to dispose of
    34 metric tons of its surplus weapons plutonium will greatly accelerate
    the Russian program. However, the requirement to maintain parallel
    progress between the two programs may cause the U.S. program to be
    delayed slightly in order to allow the Russian program to catch up.
                         russian transition initiatives
        Question. Ambassador Brooks or Mr. Baker, on several occasions the
    Administration indicated its strong support for programs designed to
    employ scientists in the Former Soviet Union. The Initiatives for
    Proliferation Prevention (IPP) has enjoyed success, but the Nuclear
    Cities Initiative has had more difficulty in producing results,
    although it has had some. In the environment of a huge budget increase
    for nonproliferation, the budget request for these Russian Transition
    Initiatives remains flat at about $40 million. Should I conclude from
    that request that you do not see as much opportunity in those programs
    as some of the others focused on materials?
        Answer. No, we still see a great deal of opportunity and need in
    the work of these programs focused on the human component of our
    proliferation concerns, and believe that these scientist engagement
    programs have a great deal of importance for our national security. At
    the end of World War II, the U.S. Government was concerned about German
    missile and nuclear expertise falling into the wrong hands, and we made
    sure those German scientists did not trade their information on the
    open market. Similarly, today we must make sure that the enormous
    scientific and technical expertise left over from the Cold War in the
    former Soviet Union does not find its way to rogue states or terrorist
    groups. I believe that our requested budget levels are sufficient to
    respond to the risk of adverse migration of this scientific and
    technical expertise to terrorists or rogue states--especially
    considering that these programs are highly leveraged by private sector
    investment and matching contributions that meet or exceed U.S.
    Government funding. But having performed a relative risk assessment of
    adverse migration versus the magnitude of the threat posed by unsecured
    materials, I believe the Administration has made some reasonable
    decisions about the relative distribution of funding requests.
        Question. Is the Administration not as concerned about ``brain
    drain'' issues as it was several years ago?
        Answer. Since September 11th, the Administration is even more
    concerned about nuclear know-how falling into the wrong hands. In
    recognition of that threat, the President requested and received a
    supplemental of $15 million in fiscal year 2002 from Congress for these
    programs. So ``brain drain'' from the former Soviet Union remains a
    strong concern. However, since the early and mid-1990's when some of
    these programs were begun, conditions have improved somewhat. The
    Russian economy has stabilized and we are not seeing the run-away
    inflation that stripped away life savings. The Russian Government is
    paying nuclear scientists more regularly. Also, the Russian economy is
    beginning to generate some private sector opportunities for these
    scientists. Our programs have adapted to these changes by focusing less
    on supplementing scientists' meager paychecks and more on seeking
    sustainable economic transformation and downsizing of the Russian
    weapons complex, taking advantage of market opportunities through
    technology commercialization.
              role of nnsa labs in department of homeland security
        Question. Ambassador Brooks, approximately $140 million in R&D
    activities at the labs has been transferred over to the Department of
    Homeland Security to manage. As you know, I wrote several provisions
    into the Act creating the Department of Homeland Security that will
    ensure our national labs continue to bring their expertise to bear on
    many problems facing us in the war on terrorism. Will you please
    comment on how the transition of those programs is going?
        Answer. The transition is progressing well. Of the approximately
    $150 million in functional transfers to the Department of Homeland
    Security (DHS), approximately $85 million of these programmatic
    activities were from the NNSA, $79 million from our Nonproliferation
    and Verification R&D program and $6 million from the nuclear
    assessments program. NNSA also transferred Program Direction funding
    associated with these activities in the amount of $3.7 million.
    Nonproliferation and Verification R&D program management is working
    closely with their DHS counterparts to assure a smooth transition of
    the R&D activities towards countering nuclear smuggling and preventing
    or countering the effects of biological or chemical terrorism. To
    facilitate this transition, DHS has asked NNSA to participate in
    execution of these programs through fiscal year 2003. In addition,
    particular activities in which we continue to have a strong role are
    the test bed for nuclear detection technology in cooperation with the
    New York/New Jersey Port Authority and the establishment of the
    BioWatch initiative in 30 cities across the country. We are working
    closely with DHS personnel as they assume management of these programs,
    so that the high quality work of the national laboratories continues to
    serve the national need, without any loss of capability or momentum.
        Question. Do you foresee any problems?
        Answer. No, but I do feel that it will be important for NNSA and
    DHS to work together to complement each others' missions. That is, NNSA
    will continue to work on development of technology for national
    security missions, some of which will have application to homeland
    security problems. NNSA's Nonproliferation and Verification R&D program
    will continue to focus on strategic R&D in support of WMD
    nonproliferation missions, while DHS focuses on the more immediate-
    operational needs of homeland security agencies, including the U.S.
    Customs Service, the Coast Guard, and the Transportation Security
    Administration. NNSA can complement the near-term development and
    application of, for example, radiation detection technology by DHS,
    with the strategic, ``leap-ahead'' research necessary to sustain
    national security capabilities, drawing on the strengths of the
    national laboratories and the NNSA responsibility for nuclear weapons
    and materials.
        Question. Do you believe counter-terrorism R&D will continue to be
    a growing part of the labs missions?
        Answer. Yes, the labs' research in nuclear, chemical, and
    biological science and technology will continue to be important to
    national security programs and provides the core competency to address
    counter-terrorism concerns. NNSA will continue to maintain a strong R&D
    program in nuclear technologies, which is of paramount importance to
    both the weapons and nonproliferation missions, and the NNSA
    Nonproliferation and Verification R&D program will continue research on
    methods to detect activities associated with proliferation of all types
    of weapons of mass destruction. However, with the transfer to the DHS
    of the R&D for the chem-bio domestic preparedness mission that
    department must undertake the support of the science and technology
    base in those disciplines. NNSA will no longer be funded to sustain the
    required capabilities in those areas.
                       nasa's nuclear systems initiative
        Question. Admiral Bowman, NASA is proceeding with its ``nuclear
    systems initiative,'' and I know they remain interested in you managing
    all or parts of that program. This initiative will develop new
    radioisotope power systems for on-board electric power on future space
    platforms, and it will also conduct research and development on nuclear
    electric propulsion systems that would allow future space craft to
    speed throughout the outer reaches of the solar system. Of course, much
    of the historic capability in nuclear space systems resides at other
    DOE labs outside of your program. What is your view of this effort and
    the role for Naval Reactors?
        Answer. First, I should make clear that we are not lobbying for
    this work; our hands are already full with current and planned Naval
    Nuclear Propulsion Program work. We have no particular expertise in
    radioisotope power systems and have no interest in managing this aspect
    of the nuclear space initiative. However, NASA has indicated that they
    are interested in NR taking the lead for reactor development in the
    Nuclear Systems Initiative (NSI), including the Jupiter Icy Moons
    Orbiter (JIMO). My view of the overall effort is based on what I have
    learned from NASA, which has convinced me that fission reactor
    technology is a key that will unlock new capabilities in space science.
    If this effort is assigned to us by the Administration and funded by
    Congress, our role should be to manage this work consistent with our
    practices for naval reactor plants. If we are not in charge, I believe
    that our role should be limited to occasional peer review.
        Question. Do you agree that the other NNSA labs with expertise in
    nuclear systems for space should play a strong role in this effort?
        Answer. Yes, the NR program does not possess all the technical
    expertise and facilities needed to execute this task entirely within
    Naval Nuclear Propulsion program national laboratories. Consistent with
    our practice for other advanced development efforts, NR would seek to
    leverage existing expertise and facilities at NNSA labs, other DOE
    labs, and in Industry to accomplish this task most effectively and at
    the lowest cost to the taxpayer. However, this work would be managed
    and budgeted for through Naval Reactors Headquarters. We believe that
    strong centralized control is necessary for success in this area.
    Therefore, we would coordinate this effort through one or both of our
    existing single-customer laboratories, which would have the overall
    responsibility for integrating the reactor system and identifying the
    appropriate subcontractors (including DOE laboratories).
        Question. What terms and conditions would you want in order to
    manage the whole program?
        Answer. To be clear, NR has no interest in managing the entire NSI
    or JIMO efforts, both of which contain significant non-reactor work, in
    which Naval Reactors possesses no relevant expertise. If Congress and
    the Administration decided to assign this work to Naval Reactors, we
    would continue to do business the ``NR way.'' This means that NR should
    have complete financial, technical, and contractual control over the
    parts of the NSI for which we are responsible. To make that control
    effective, we would request a separate line in the DOE budget for space
    reactor work. This would also help ensure that our space and Navy
    responsibilities do not interfere with each other. We would use our
    successful practices in naval reactor design by assigning one of our
    single-customer laboratories the lead for integrating the reactor
    system. Finally, this work would be conducted so that no sensitive or
    classified naval nuclear propulsion information was disclosed. These
    terms are important for us to preserve our total ownership approach to
    doing business. I would request a letter from high levels in the
    Administration to assign this mandate to Naval Reactors, codifying
    these terms and conditions.
                               naval reactor labs
        Question. You have two outstanding engineering labs, the Bettis
    Atomic Power Lab and the Knolls Atomic Power Lab. Both of those labs
    went through contract competitions within the last 5 years. Did
    competing the contracts at your labs produce significant or notable
    improvements in performance?
        Answer. Competing Naval Reactors' labs resulted in lower combined
    cost to the government to run those facilities. In the Request for
    Proposal we asked that the successful bidder make any transition
    transparent to the laboratory workforce. Cost savings were principally
    through the ability to reduce contribution to corporate overhead. This
    workforce continues to deliver the same consistently high-quality
    engineering support for our nuclear fleet that it has for over 50
    years.
        Question. Can you elaborate on the Naval Reactors tradition as to
    how you manage your labs? I ask that with full knowledge that the
    weapons labs are much different animals from yours, but I ask just as a
    point of contrast.
        Answer. Naval Reactors' two national labs, Bettis Atomic Power
    Laboratory (Bettis), and Knolls Atomic Power Laboratory (KAPL), have
    made vital contributions to the Naval Reactors Program for more than 50
    years. It is difficult to isolate the factors that have led to this
    success, but several do stand out. First, our labs have a very focused
    mission: they only do work for this program and their general managers
    report directly to me. Second, my field offices use an effective audit
    and appraisal program that allows me to keep a close watch on the
    performance of our labs. Third, Naval Reactors benefits from a focused
    multi-year planning process, reviewed semiannually, as well as an
    annual technical work review. Experts in naval nuclear propulsion
    perform these reviews. Finally, Naval Reactors maintains a simple,
    technically talented, enduring, lean headquarters structure that allows
    us to oversee our responsibilities effectively. My headquarters staff
    retains clear, total responsibility for all aspects of naval nuclear
    propulsion, including management of the laboratories. Laboratory
    general managers report directly to me. By statute (Executive Order
    12344 codified in Public Laws 106-65 and 98-525) the Director of Naval
    Reactors is a four-star admiral with an 8-year tenure, as well as a
    deputy administrator in the NNSA/DOE. This is important for two
    reasons: it gives the director the stature to handle the issues that
    arise while overseeing such unforgiving technology and it gives him
    enough time to learn all the aspects of the job while providing
    leadership consistency.
                                     ______

                   Questions Submitted by Senator Harry Reid
                                nuclear security
        Question. Ambassador Brooks, since September 11th NNSA has sent up
    numerous reprogramming requests to cover the costs of enhanced
    security, particularly for periods when the Nation has gone to Code
    Orange. Generally, we have been happy to approve these reprogrammings.
    However, I am concerned that we have seen lot of supplemental
    appropriations requests come to the Hill during the last few years and
    they rarely, if ever, have any funding for the NNSA. Given that you are
    the guardians of both our Nation's nuclear stockpile and also a
    tremendous amount of fissile nuclear material around the country, this
    concerns me. Is your organization not requesting additional funding for
    nuclear security? Is OMB simply denying your requests?
        Answer. While we continually work hard to establish a base
    Safeguards and Security program request that will be sufficient to
    effectively meet our annual security program requirements, we, like the
    rest of the Nation, are doing this against a backdrop of rapidly
    evolving threats of terrorism. Against this backdrop, we also continue
    to actively assess our programs to assure performance and readiness.
    Accordingly, budget changes within a year may be necessary. The fiscal
    year 2004 budget request for Safeguards and Security is sufficient to
    meet our currently known needs for ongoing Safeguards and Security
    activities. This request was developed with information from an
    assessment of the complex's needs following the September 11, 2001,
    attacks, and was formulated using the NNSA Planning, Programming,
    Budgeting and Evaluation process to assure that funding requests are
    closely linked to established program plans and balanced across NNSA.
        The requests for supplemental funding you mention have been related
    to emergent requirements that could not be accommodated within the base
    budget request--the ``unknown-unknowns.'' A good example is the amount
    of time we will spend this year at the elevated ``SECON 2'' security
    level at our sites. Rather than budget for this type of contingency, it
    is our policy to work within the base budget and accommodate what we
    can before requesting additional funding authority. The Administration
    endorses this approach and, in fact, supported two such requests for
    our S&S programs last year.
        Right now, we are looking at the increased costs we're incurring
    for site protection at the SECON 2 level. We are also expecting the DOE
    to issue in the near future, a revised, Design Basis Threat. Each of
    our sites will analyze their security postures and the range of
    activities that may need to be taken to best address the new threat
    guidance. The sites will also work throughout the coming year to
    identify areas of efficiencies and operational improvements that could
    reduce S&S costs while maintaining the level of protection we require.
        Throughout our efforts, we will try to accommodate S&S program
    needs within available funding. If increased funding is required, we
    will promptly work with the Congress.
        Question. What can we do to get the Administration to take the
    threat of loose nuclear material as seriously as they seem to take the
    threat of chemical or biological attack?
        Answer. The Bush Administration takes all threats posed by WMD
    seriously and has undertaken several major initiatives to address
    security risks arising from nuclear and radiological materials.
    Presidents Bush and Putin agreed last year to cooperate on ways to
    accelerate the elimination of excess nuclear materials. To supplement
    our ongoing programs to convert highly enriched uranium to nuclear
    reactor fuel and dispose of excess weapons plutonium, we are currently
    negotiating with Russia on several new initiatives that will increase
    the rate at which nuclear materials are converted to non-weapons usable
    forms. This year's G-8 summit meeting included a reaffirmation of
    commitments by the United States and its allies to supply up to $20
    billion of assistance to enable Russia to reduce proliferation risks,
    with the elimination of excess fissile materials identified as a
    priority area. Through the Materials Protection, Control, and
    Accounting program run by DOE's National Nuclear Security
    Administration, we have upgraded security at facilities and storage
    sites in Russia and other countries that contain hundreds of tons of
    weapons-usable nuclear material.
        Secretary Abraham hosted an international conference in March to
    identify steps that need to be taken globally to reduce the danger that
    terrorists could use radiological dispersion devices. DOE is actively
    engaged in assisting a number of countries to recover and safely
    dispose of abandoned radiological sources that pose a security threat.
    Domestically, the NRC is working to put in place improved security for
    radiological sources used for commercial, medical, or scientific
    purposes in the United States. DOE continues to operate the Off-Site
    Source Recovery Program, which has already retrieved and securely
    stored thousands of radioactive sources no longer needed for their
    original purposes.
                                nevada test site
        Question. The Nevada Test Site provided crucial capabilities to the
    Nation during the Cold War, and the Administration claims that this
    national asset must remain ready to undertake similar responsibilities
    if called upon. Yet, the levels of activity at the Test Site and the
    levels of employment have steadily diminished since the termination of
    nuclear testing. The only way I see to maintain the former capability
    is to establish new activities at the Test Site that require similar
    skills and facilities. Without that approach, the entire capability
    will evaporate. Older workers will depart through death and retirement,
    and without a stable and demanding mission new workers will not
    develop. Please tell me how your Administration plans to reverse the
    decline in morale and mission content at the Nevada Test Site.
        Answer. Since the moratorium on nuclear testing in 1992, the NTS
    has maintained the readiness to conduct testing if deemed necessary by
    the President. The skill mix needed for the readiness posture is
    complimentary to that needed to support Stockpile Stewardship program
    activities. By ensuring a continued robust subcritical experiment and
    other physics research program capabilities such as JASPER and Atlas at
    the NTS, historic skills and capabilities can be maintained.
        To date, 19 subcritical experiments have been successfully
    conducted at the NTS. The national laboratories rely on the technical
    expertise and scientific skills of NTS workers to maintain underground
    testing expertise and capability and to capture essential data from the
    subcritical experiments. Although we expect the number of subcritical
    experiments to decline over the next several years, the complexity of
    the experiments and need for advanced diagnostics will increase.
        NNSA is committed to continued use of the NTS and expansion of its
    missions as is evident in the relocation of the Atlas program to the
    NTS. Atlas is a high performance pulsed power machine and will be used
    to implode targets and measure the physical properties of weapons
    material. NNSA is committed to bringing this machine on line in Nevada
    and fielding experiments in support of the Stockpile Stewardship
    program.
        As other DOE/NNSA facilities face encroachment by population
    centers, we look to move those missions with greater need for remote
    and secure operations to the NTS. It is recognized that the NTS has
    sufficient infrastructure and security features that make it ideal for
    nonproliferation and national security related projects. A clear
    example is the planned relocation of the critical assembly work from
    Los Alamos to the NTS. These assemblies will complement the existing
    missions of the NTS by providing an additional training tool for
    emergency response personnel and those who work in nuclear
    environments.
        This administration continues to enhance and support nuclear-
    related emergency response activities and is working closely with the
    newly-formed Department of Homeland Security (DHS) to fight terrorism.
    An ambitious DHS-sponsored program to train first responders and local
    emergency managers from throughout the country at the NTS continues to
    grow. Known as the National Center for Exercise Excellence, this
    program will graduate 6,000 students this year alone. Within NNSA, the
    existing NTS infrastructure is being modernized under current National
    Center for Combating Terrorism (NCCT) funding to accommodate this
    increase in student volume, and will ultimately enhance other national
    security programs. The Remote Sensing Laboratory has provided the great
    majority of radiological emergency response for the United States over
    the last 30 years. These scientists and engineers, in close partnership
    with the National Laboratories, are also developing the next generation
    of counterterrorism technology for the Department of Homeland Security.
                           nuclear weapons stockpile
        Question. Maintaining the safety and reliability of our nuclear
    weapons stockpile is technically difficult, even if we were still
    testing. The absence of testing makes this job even more difficult. I
    know that the work of our weapons scientists and engineers is mostly
    classified and carried out in secure facilities, but I suspect that
    most of the scientific and technical tools are very similar to those
    used for nonclassified research and development. Please tell me how the
    Administration is assuring benefit to the classified program from the
    enormous Federal investments in scientific and technical advances made
    by DOE's Office of Science, the National Science Foundation, the
    Department of Defense labs, Commerce's National Institute of Science
    and Technology, and others like the Justice Department and our
    intelligence agencies.
        Answer. NNSA firmly supports leveraging science and technology
    investments made by other Federal agencies. Let me provide just a few
    examples from our Accelerated Strategic Computing program:
      --Energy Sciences Network (ESNet).--The weapons program's SecureNet
            relies heavily upon the Office of Science's ESNet as the
            underlying infrastructure for wide area network communications.
      --High Performance Storage System (HPSS).--Developed through a
            consortium including the Oak Ridge National Laboratory (ORNL),
            the three weapons laboratories, and IBM Government Systems,
            HPSS provides a high speed, parallel, network-centered system
            for high performance storage. ASCI continues to rely on ORNL to
            provide storage system management support.
      --Defense Threat Reduction Agency's PITHON.--This experimental
            capability simulates hot x-rays by using a moderate energy
            source. Data from this facility will be used as part of the
            ASCI code verification and validation process.
      --National Security Agency Encryptors.--Development and early
            production of UltraFastlanes through the National Security
            Agency enabled sufficient data transfer rates to support
            designer work at the labs.
      --National Science Foundation platforms.--Compute cycles from the
            Blue Horizon platform at San Diego Supercomputing Center are
            used to provide Stockpile Stewardship Alliance University
            partners with access to unclassified supercomputing capability.
                           nonproliferation programs
        Question. The nonproliferation programs within your Administration
    are, for the most part, pursued by the same organizations that manage
    the weapons research anddevelopment. In fact, most of the
    nonproliferation scientists and engineers are either former or even
    present weapons specialists in the Stockpile Stewardship program. Yet,
    the management of these two activities within your administration is
    quite different. For example, definition of the stockpile stewardship
    program develops from a partnership between the Federal Government and
    the civilian specialists. Is the same approach used for
    nonproliferation activities?
        Answer. As for the approach for development of U.S.
    nonproliferation programs, the programs have evolved considerably over
    the last 10 years. The phrase ``partnership between the Federal
    Government and the civilian specialists'' may be somewhat misleading.
    The National Security Council sets the agenda for U.S. nonproliferation
    programs for the Executive Branch. However, the NNSA's nonproliferation
    programs have received considerable input from Nongovernmental
    Organizations (NGOs), Congress, and the Interagency. Also, milestones
    and events such as the fall of the Soviet Union, the crash of the
    Russian economy, accords by former Soviet States to abrogate nuclear
    weapons, the September 11, 2002, terrorist attacks and others have had
    major influence on the evolution of these programs. With 10 years of
    experience implementing nonproliferation programs in the former Soviet
    Union and in other countries around the world, the NNSA has developed a
    broad range of experts upon which to draw for expertise, both inside
    and outside of the NNSA.
        Question. Do you think that efficiencies and cost savings could be
    found by uniting these two programs into a single program, perhaps
    entitled Nuclear Security programs?
        Answer. By act of Congress, the National Nuclear Security
    Administration has three line organizations: Defense Programs, Defense
    Nuclear Nonproliferation, and Naval Reactors. Each program has a
    distinct mission, a unique set of skills to accomplish the mission,
    different stakeholders, and a dissimilar venue for performing the work.
    Naval Reactors has specific legislative mandates. Defense Programs and
    Defense Nuclear Nonproliferation, however, work quite independently to
    perform their missions, although there are some areas of mutual
    concern. Defense Programs carries out the Stockpile Stewardship Program
    and other missions primarily in the United States; Defense Nuclear
    Nonproliferation conducts its programs internationally. Defense
    Programs' primary customer is the Department of Defense while Defense
    Nuclear Nonproliferation works with U.S. allies to reduce the threat of
    weapons of mass destruction, keeping threats away from the U.S. shores.
        Congressional action to create the NNSA as a ``separately
    organized'' agency within the DOE provides for the management of
    nuclear weapons expertise and infrastructure under a single leader.
    Defense Programs and Defense Nuclear Nonproliferation organizations
    reflect the disparate missions of these organizations. A large part of
    the work for each program is accomplished at the three NNSA
    laboratories, Lawrence Livermore, Sandia, and Los Alamos. However, the
    NNSA national laboratories have organized in such a way that the
    expertise to support each program is provided by dedicated and
    specialized support because of the nature of the work for each program.
    Defense Nuclear Nonproliferation, moreover, uses resources of other
    laboratories and contractors outside of NNSA, including Pacific
    Northwest, Argonne, Brookhaven, and Oak Ridge National Laboratories in
    working in Russia and around the world.
        In those areas where mutual concerns of Defense Programs and
    Defense Nuclear Nonproliferation converge, such as international access
    to the U.S. nuclear weapons complex for treaty compliance, the NNSA is
    particularly well organized to perform the necessary interfaces to
    determine the best approach to accomplish both missions. Combining
    these organizations would be disruptive and blur the distinct missions
    of each organization. The structure of the NNSA provides for cost
    effective management of resources through delivery of services to the
    line organizations by the Offices of Management and Administration and
    Infrastructure and Security.

                             CONCLUSION OF HEARINGS

        Senator Domenici. Anything further?
        We stand in recess. Thank you all very much.
        [Whereupon, at 3:40 p.m., Thursday, April 10, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

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

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--At the direction of the subcommittee
    chairman, the following statements received by the subcommittee
    are made part of the hearing record on the Fiscal Year 2004
    Energy and Water Development Appropriations Act.]

                          DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army--Civil

                               Corps of Engineers

     Prepared Statement of Orange County, California and the Orange County
                             Flood Control District
        Mr. Chairman and Members: On behalf of Orange County, California,
    and the Orange County Flood Control District, I respectfully request
    your support for fiscal year 2004 Federal appropriations to fund the
    following U.S. Army Corps of Engineers projects:
    Santa Ana River Mainstem Project (including Prado Dam)--$67,864,000
        We especially urge your support of the $67.8 million for the Santa
    Ana River Mainstem Project. This will allow the Corps to continue
    construction on Prado Dam, which began construction in fiscal year
    2003. Since fiscal year 1990, the Subcommittee on Energy and Water
    Development has consistently provided the funds necessary to maintain
    the planned schedule of construction for the Santa Ana River Mainstem
    Project. As a result, the Seven Oaks Dam was completed in 1999, the
    Lower Santa Ana River is about 90 percent complete, the Oak Street
    Drain is complete, and work has commenced on the San Timoteo feature.
    The urgency to complete all features of the project has been
    highlighted by the flooding that has occurred throughout California
    during the past several years and, in particular, by the damage
    associated with the El Nino condition in 1997 and 1998. As the Corps of
    Engineers has reported on several occasions, destruction from a design
    storm on the Santa Ana River will cause damages exceeding $15 billion
    and the loss of thousands of lives. The Orange County Flood Control
    District requests continued support for the timely implementation of
    the Santa Ana River Mainstem Project, including Prado Dam, by including
    an appropriation of $67.8 million for fiscal year 2004.
    Upper Newport Bay (Dredging)--$5,800,000
        The construction dredging and restoration of Upper Newport Bay is
    another high priority project for Orange County. The restoration of
    Upper Newport Bay will ensure the preservation of one of California's
    most precious remaining estuaries along the coast. We urge your support
    for this very important and significant project.
    Westminster/East Garden Grove, California--$300,000
        Watershed restoration and flood control feasibility study on East
    Garden Grove Wintersburg Channel.
    Coyote Creek, Carbon Canyon Watershed in Orange County--$600,000
        Watershed feasibility study for tributaries in western Orange
    County that drain into Coyote Creek, Carbon Canyon, and the San Gabriel
    River.
    Newport Bay/San Diego Creek Watershed--$186,000
        Continuation of watershed ecosystem restoration study.
    Orange County Beach Shoreline--$600,000
        This is a feasibility study for shore protection, watershed, and
    water quality effort along the Orange County coast.
    Special Area Management Plan (San Diego Creek SAMP)--$680,000
        This is part of a cooperative effort between private property
    owners and government to identify and protect critical wetland habitat
    in south Orange County ahead of development.
    San Juan Creek, South Orange County--$300,000
        Continuation of watershed feasibility study for ecosystem
    restoration and flood control.
    Aliso Creek Mainstem--$618,000
        Continuation of watershed feasibility study for ecosystem
    restoration.

        We thank you for the opportunity to address the Subcommittee and
    for your past record of support for projects that are so important to
    Orange County.
                                     ______

     Prepared Statement of DINAMO, The Association for the Development of
                   Inland Navigation in America's Ohio Valley
        Mr. Chairman and Members of the Subcommittee: I am Barry Palmer,
    Executive Director of DINAMO, The Association for the Development of
    Inland Navigation in America's Ohio Valley. DINAMO is a multi-state,
    membership based association of business and industry, labor, and State
    government leaders from throughout the Ohio Valley, whose singular
    purpose is to expedite the modernization of the lock and dam
    infrastructure on the Ohio River Navigation System. Largely through the
    leadership of this subcommittee and the professional efforts of the
    U.S. Army Corps of Engineers, we in the Ohio Valley are beginning to
    see the results of 22 years of continuous hard work in improving our
    river infrastructure.
        Lock and dam modernization at Robert C. Byrd Locks and Dam, Grays
    Landing Locks and Dam, Point Marion Lock, and Winfield Locks are
    largely complete. These projects were authorized for construction in
    the Water Resources Development Act of 1986. The immediate problems
    really are focused on completing in a timely manner lock and dam
    modernization projects authorized by the Congress in subsequent water
    resources development acts. Substantial problems remain for reliable
    and efficient funding of improvements at the Olmsted Locks and Dams,
    Ohio River, IL/KY; Lower Monongahela River Locks and Dams 2, 3 & 4, PA;
    McAlpine Locks and Dam, Ohio River, IN/KY; Marmet Lock, Kanawha River,
    WV; and for Kentucky Lock, Tennessee River, KY. The construction
    schedules for all of these projects have slipped from 3 to 6 years
    each, and we are requesting funding for these construction projects at
    an ``efficient construction rate.'' This term means that these projects
    can be operational by 2010 or earlier, if funded at or near the full
    capability of the U.S. Army Corps of Engineers. Additional funding is
    also needed to complete pre-construction engineering and design (PED)
    for Greenup Locks and Dam, Ohio River, KY/OH and for John T. Myers
    Locks and Dam, Ohio River, KY/IN. The President's Fiscal Year 2004
    Budget contains no monies for Pre-Construction, Engineering and Design
    for the John T. Myers Lock Extension project, although the project was
    authorized by the Water Resources Development Act of 2000 and has
    received regularly scheduled funding for planning and PED for many,
    many years. Additionally this Committee provided $800,000 last year for
    a planning start at Emsworth, Dashields and Montgomery Locks and Dams,
    Ohio River, PA. Following is a listing of the projects and an efficient
    funding level determined by the U.S. Army Corps of Engineers to advance
    construction projects for completion by 2010 or earlier and to advance
    other projects through planning, construction, engineering and design
    process:
    Recommendations for Fiscal Year 2004
        For the Robert C. Byrd Locks and Dam modification project, formerly
    the Gallipolis Locks and Dam on the Ohio River, OH/WV, about $2,700,000
    to continue major rehabilitation of the dam. Fiscal Year 2004 Budget
    Request $2,500,000.
        For the Winfield Lock Replacement on the Kanawha River, WV,
    $2,000,000 for continued construction and relocations related to
    environmental mitigation. Fiscal Year 2004 Budget Request $2,000,000.
        For the Olmsted Locks and Dam, replacing Locks and Dams 52 and 53
    on the Lower Ohio River, IL/KY, $73,000,000 to award the contract to
    initiate construction of the new gated dam. Fiscal Year 2004 Budget
    Request $73,000,000.
        For the Monongahela River Locks and Dams 2, 3 & 4, PA, $61,00,000,
    to complete construction of the new Braddock Dam, continue any ongoing
    contracts at Charleroi which were able to be awarded in fiscal year
    2003 and award a major contract for the construction of the new
    Charleroi Locks. In addition, critical Pool 2 relocations and Pool 3
    dredging should resume in fiscal year 2004 in order to support timely
    completion of the project. Initiating construction work at Charleroi in
    fiscal year 2003 is critical to completing the project by 2010. Fiscal
    Year 2004 Budget Request $35,000,000.
        For the McAlpine Lock Project on the Ohio River, IN/KY, $70,000,000
    to construction of the new 110  1,200 lock addition. Fiscal Year
    2004 Budget Request $26,100,000.
        For the Marmet Lock Replacement on the Kanawha River, WV,
    $69,200,000 to continue construction of the new 110  800 project.
    Fiscal Year 2004 Budget Request $52,154,000.
        For the Kentucky Lock Addition on the Tennessee River, KY,
    $53,400,000 to continue construction of the new highway and bridge work
    and to begin construction of the upstream cofferdam. Fiscal Year 2004
    Budget Request $24,866,000.
        For Pre-Construction Engineering and Design for the John T. Myers
    Locks and Dam, Ohio River, IN/KY, $2,500,000. A new construction start
    for this project will be required soon, since this project was
    authorized for construction in the Water Resources Development Act of
    2000. Fiscal Year 2004 Budget Request $0.00.
        For Pre-Construction Engineering and Design for the Greenup Locks
    and Dam, Ohio River, OH/KY, $5,800,000. A new construction start for
    this project will be required soon, since this project was authorized
    for construction in the Water Resources Development Act of 2000. Fiscal
    Year 2004 Budget Request $2,895,000.
        For the Ohio River Mainstem Study, which will identify a
    comprehensive investment plan for the next 50 years and also assess
    system economic and environmental impacts associated with the plan,
    $1,500,000 in fiscal year 2003. This level of funding is needed to
    complete a preliminary draft report including a System Investment Plan
    and Cumulative Effects Assessment. Fiscal Year 2004 Budget Request
    $1,350,000.
        For the Emsworth, Dashields and Montgomery Locks and Dams, Ohio
    River, PA, $1,500,000. Fiscal Year 2004 Budget Request $0.00.
        All lock and dam modernization projects should be completed in a
    timely and orderly manner. It is important to note that monies to pay
    for lock and dam modernization are being generated by 20 cents per
    gallon diesel fuel tax by towboats operating on America's inland
    navigation system. These tax revenues are gathering in the Inland
    Waterways Trust Fund, in order to finance 50 percent of the costs of
    these project costs. There is about $400 million in the Inland
    Waterways Trust Fund. The real challenge is not the private sector
    contribution to completing these lock and dam construction projects in
    a timely manner, but rather it is the commitment of the Federal
    Government to matching its share.
        Additionally DINAMO opposes expansion of the authority of the
    Inland Waterways Trust Fund to finance a portion of Operation and
    Maintenance expenditures on America's inland navigation system. The
    Trust Fund's balance and all future revenues are already spoken for.
    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, many of
    which are under construction. All of the current Trust Fund balance and
    all of the 20-cents-per-gallon fuel taxes paid by transportation users
    for the next 8 years are needed to complete just six of the priority
    projects currently under construction. To spend these funds for O&M
    will ensure that the construction or major rehabilitation of these and
    other important ongoing and future projects will never be completed or
    built--unless there is a future tax increase to replenish a bankrupt
    Trust Fund! The proposal violates the agreements underlying the Water
    Resources Development Act of 1098, which affirmed continued
    responsibility for inland waterways Operations and Maintenance in
    return for waterway users assuming the obligation for financing 50
    percent of future construction and major rehabilitation costs. Congress
    must ensure that the balance and all future Trust Fund revenues are
    spent on the purposes for which they were collected--to modernize the
    inland waterway system and ensure its future.
        The construction schedules for Ohio River Navigation System
    projects have slipped from 3 to 6 years, depending on the project.
    Delaying the construction of these vitally needed infrastructure
    investments is a terribly inefficient practice. Inefficient
    construction schedules cost people a lot of money. A February 2002
    study by the Institute for Water Resources concluded that $1.97 billion
    of cumulative benefits (transportation savings) for Olmsted, Lower
    Monongahela River 2, 3 & 4, McAlpine, Marmet, and Kentucky lock and dam
    modernization projects have been lost forever. The benefits foregone
    represent the cumulative annual loss of transportation cost savings
    associated with postponing the completion of these projects from their
    ``optimum,'' or ``efficient,'' schedule. In addition, this study
    concludes that $672 million of future benefits are at risk but will be
    foregone (based on fiscal year 2002 schedules) if funding is not
    provided to accelerate design and construction activities in accordance
    with ``efficient'' schedules. In February of this year (2003) the
    Institute for Water Resources updated this information: because of
    additional construction schedule slippage, projects have been further
    delayed and additional benefits have also been washed down the river.
    (This chart, ``Inland Waterway New Construction Projects, Benefits
    Foregone Attributable to Stretched Project Schedules in Fiscal Year
    2003 Budget Request,'' is attached to this testimony.)
        Expenditures for lock and dam modernization are an investment in
    the physical infrastructure of this Nation. The President's $4.194
    billion Corps of Engineers Civil Works Budget for fiscal year 2004 will
    fall at least $800 million short of what will be needed to meet the
    Nation's water resources needs. Mr. Chairman, we have great confidence
    in the Corps of Engineers and urge your support for a funding level
    more in line with the real water resources development needs of the
    Nation. For lock and dam modernization on America's inland navigation
    system, targeted construction funding ought to be at a level of about
    $300 million annually, with half coming from the Inland Waterways Trust
    Fund and half coming from the General Treasury. Last year Congress
    provided about $4.63 billion for the Corps of Engineers program and
    more than $250 million for lock and dam modernization on America's
    inland navigation system. It is reasonable that funding for the Corps
    program should be increased to levels closer to $5 billion and about
    $300 million for lock and dam modernization on our Nation's river
    system, in order to complete the major lock and dam modernization
    projects by the end of the decade or earlier.
        Following is our analysis of the partial consequences of inadequate
    funding of Ohio River Navigation System infrastructure improvements:
    Olmsted Locks and Dam
        Ground was broken on Olmsted Locks and Dam in 1996. Locks and Dam
    52 and 53 will be replaced with this single facility at mile 964.4 of
    the Ohio River. Olmsted will feature twin 110  1,200 lock chambers
    and a submersible dam. During high water conditions, which should occur
    about 60 percent of each year, tows will pass over the dam using the
    navigable pass portion. The total cost is approximately $1 billion,
    with a benefit/cost ratio of 3.5 to 1. The project is scheduled for
    completion in 2011. Congress appropriated $65 million for construction
    work in fiscal year 2003.
        Olmsted has already slipped its completion date by 5 years, and
    more than $1.84 billion in transportation benefits have already been
    washed down the river (non-recoverable) because of construction
    schedule slippage. The President's Fiscal Year 2004 Civil Works Budget
    has funded the project on an Efficient Funding Schedule, and the new
    facility could be operational by 2011 if this level of funding is
    maintained. This improved construction scenario (when compared to
    fiscal year 2003 construction schedule projections) could prevent the
    loss of more than $2.63 billion in transportation benefits.
        According to the Corps of Engineers Waterborne Commerce Statistics
    for 2001, more than 82 million tons of commodities were shipped past
    the point where Olmsted is being built. These shipments had a combined
    value of $18.3 billion. The leading commodity shipped past the Olmsted
    Lock site was coal, which made up 24 percent of the total tonnage.
    Limestone, iron ore and grains such as corn and soybeans were other
    significant commodities making up this traffic.
    Lower Monongahela River Locks and Dams 2, 3 & 4
        Locks and Dams 2, 3 and 4 are the first three navigation projects
    on the Monongahela River upstream of Pittsburgh. Lock and Dam 2 is
    located at Monongahela River mile 11.2, Lock and Dam 3 is located at
    mile 23.8, and Lock and Dam 4 is at mile 41.5. Lock and Dam 2 has a
    main lock chamber measuring 110  720 feet and an auxiliary lock that
    is 56  360. The other two projects have main lock chambers that are
    56  720 and auxiliary lock chambers that are 56  360. Lock and
    Dam 2 was originally built in 1905, with new locks completed in the
    early 1950's. Lock and Dam 3 was built in 1907, and Lock and Dam 4 was
    completed in 1932.
        The dam at L/D 2 is being replaced by a gated dam being built using
    an innovative in-the-wet method of fabricating segments off-site and
    floating them in place, and the project will be renamed Braddock Locks
    and Dam. L/D 3 will be removed. Twin 84  720 locks will be built at
    L/D 4 (to be renamed Charleroi Locks and Dam). Construction on this
    two-for-three replacement project began in 1994 and is scheduled for
    completion in 2010, at a total cost of $750 million. The benefit/cost
    ratio is 2.1 to 1. In fiscal year 2003, $42 million was appropriated
    for this work. Continued funding at a rate of $35 million (Fiscal Year
    2004 Budget) annually could delay completion an additional 9 years,
    possibly by 2016 and the loss of more than $267.3 million in
    transportation benefits.
        According to the Corps of Engineers Waterborne Commerce Statistics
    for 2001, almost 22.2 million tons of commodities moved through any or
    all of the three locks. Of the 19.1 million tons of coal transiting
    these locks, over 7.2 million tons were destined for 23 power plants in
    7 States. The value of the 22.2 million tons was nearly $1.6 billion.
    Nearly 10 million tons moved through all three locks.
    McAlpine Locks and Dam
        McAlpine Locks and Dam is located in downtown Louisville, Kentucky.
    The dam is at mile 604.4 of the Ohio River and the locks are in the
    Louisville and Portland Canal on the Kentucky side of the river. The
    56  600 auxiliary lock was completed in 1921 and the 110  1,200
    main chamber was opened in 1961. There is also an inactive 56  360
    lock chamber. In 1960, the project was renamed from Lock and Dam 41 in
    honor of a former Louisville District Engineer.
        Construction began at McAlpine in 1999 on a new 110  1,200 lock,
    which will replace the active 110  600 auxiliary and an inactive
    auxiliary lock. The project is scheduled for completion in 2008 at a
    total cost of $278 million, with a benefit/cost ratio of 1.8 to 1.
    Congress appropriated $21 million for work in fiscal year 2003.
    McAlpine has already slipped its completion date by 6 years, and over
    $245 million in transportation benefits have been washed down the river
    (non-recoverable) because of construction schedule slippage. Failure to
    fund the project on an Efficient Funding Schedule in fiscal year 2004
    (at $70 million) and each future year could delay completion by as much
    as an additional three years, possibly to 2011. That scenario would
    wash approximately another $124.86 million in benefits down the river.
        According to the Corps of Engineers Waterborne Commerce Statistics
    for 2001, more than 55 million tons of commodities were shipped through
    McAlpine Locks. These shipments had a combined value of nearly $11.7
    billion. Of the 20 million tons of coal moving through McAlpine in
    2001, over 13 million tons went to more than 30 power plants in 8
    States. McAlpine Locks was important to the steel industry, as it
    passed 5.5 million tons of iron ore, pig iron and other raw iron and
    2.5 million tons of iron and steel products.
    Marmet Lock and Dam
        Marmet Locks and Dam is located at mile 67.7 of the Kanawha River.
    The locks were opened in 1933 and the dam was completed in 1934. The
    two lock chambers measure 360  56. Located about 9 miles upstream of
    Charleston West Virginia, the project is approximately 27 miles from
    the head of navigation.
        An improvement to Marmet Locks was authorized in 1996. The proposed
    project is a new 800  110 lock chamber to go with the existing pair
    of 360  54 chambers. Property acquisition and design work continue
    and construction is underway. The total cost of the project is $313
    million, and Congress appropriated $50 million for work in fiscal year
    2003. The benefit/cost ratio is 2.9 to 1. Average annual benefits of
    this new project are about $55.9 million a year. Marmet has already
    slipped completion date by 3 years, and over $117 million in
    transportation benefits have been washed down the river (non-
    recoverable) because of construction schedule slippage.
        According to the Corps of Engineers Waterborne Commerce Statistics
    for 2001, just over 17 million tons of commodities were shipped through
    Marmet Locks. These shipments had a combined value of $802 million. Of
    the 16.1 million tons of coal moving through Marmet, 11.5 million tons
    were destined for 30 power plants in 7 States, and another 1.5 million
    tons went to steel plants.
    Kentucky Locks and Dam
        Kentucky and Barkley Locks work as a system for passing barge
    traffic even though they are located on different rivers. Kentucky Lock
    and Dam is located on the Tennessee River 22.4 miles upstream of the
    junction with the Ohio River. Barkley Lock and Dam is located on the
    Cumberland River 30.6 miles upstream of the Ohio. The two rivers are
    connected by the Barkley Canal, which intersects the Tennessee River at
    mile 25.3 and the Cumberland River at mile 32.8. Kentucky's lock
    chamber is 110  600 and has been in operation since 1944. Barkley
    was completed in 1966 and has a 110  800 lock chamber.
        Ground was broken in October of 1999 on a new 110  1,200 lock at
    Kentucky Lock. Completion is scheduled for 2010; the total cost will be
    approximately $533 million, with a benefit/cost ratio of 2.4 to 1. The
    existing 110  600 lock will continue to be used as an auxiliary.
    Kentucky Lock and Dam's current single lock chamber is insufficient to
    handle increasing tonnage. The lack of an auxiliary chamber forces tows
    to use Barkley Lock during periods of extended delays and closures.
    When Kentucky Lock is at 90 percent capacity, tows face average delays
    of 5 to 6 hours. $30 million was appropriated for work on Kentucky
    Lock's new chamber in fiscal year 2003. Kentucky Lock has already
    slipped completion date by 2 years, and over $74 million in
    transportation benefits have been washed down the river (non-
    recoverable) because of construction schedule slippage. The President's
    fiscal year 2004 Civil Works Budget ($25 million) will delay completion
    of the project by as much as 10 years and approximately $551 million in
    transportation benefits will be washed down the river.
        In conclusion, Mr. Chairman, we thank you for your interest and
    support of lock and dam modernization on the Ohio River Navigation
    System. It was that the rivers played a tremendous role in the defense
    of our Nation. Today our Nation's security is more and more determined
    by our economic muscle, our ability to compete for more and news
    customers in different parts of the world. These locks and dams are at
    the core of our basic infrastructure that enables Americans to compete
    globally for its basic manufacturing products--iron and steel,
    chemicals, petroleum products, aluminum, etc. We urge your support of
    efficient funding of these vitally needed projects that last fifty or
    more years and provide many dollars in return for the investment sunk.
        We thank you for the opportunity to present this request and our
    thoughts on these matters.

                          TABLE 1.--INLAND WATERWAY NEW CONSTRUCTION PROJECTS--BENEFITS FOREGONE ATTRIBUTABLE TO STRETCHED PROJECT SCHEDULES IN FISCAL YEAR 2003 BUDGET REQUEST
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Initial Optimum         Current Optimum        Fiscal Year 2003        Average                   Est.                     Est.         Est.         Est.
                                            Schedule                Schedule             Budget Schedule        Annual                  Benefits                 Benefits     Benefits   Inflation @
                                    ------------------------------------------------------------------------ Benefits \1\   Schedule    Foregone    Schedule   Foregone vs    Foregone       2.7%
                                                                                                            --------------  Change in  vs Initial   Change in  Current Opt      Not     ------------
                Project                                                                                                     Years vs     Opt \2\    Years vs  ------------- Recoverable
                                         ($         Compl        ($         Compl        ($         Compl                      PDR    ------------   Current               -------------
                                      million)                million)                million)                ($ million)                  ($          Opt     ($ million)               ($ million)
                                                                                                                                        million)                            ($ million)
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Lower Mon 2-4..................      $645.0        2004      $750.0        2009      $750.0        2010       $29.17            6     $134.62           1      $19.24       $115.38       $1.27
    London Rehab...................        18.7        2003        22.2        2003        22.2        2004         1.34            1        1.26           1        1.26   ...........        0.32
    Marmet.........................       268.0        2007       313.0        2009       313.0        2010        55.90            3      117.53           1       36.87         80.66        0.04
    Olmsted........................     1,020.0        2006     1,060.0        2010     1,052.0        2011       526.25            5    1,848.55           1      327.11      1,521.44        0.31
    McAlpine.......................       255.0        2002       278.0        2007       278.0        2008        41.62            6      245.36           1       29.12        216.24        1.06
    Winfield \3\...................       221.6        2002       227.5        2002       235.5        2003        56.11            1  ..........           1  ...........  ...........        0.13
    R.C. Byrd \3\..................       373.0        1999       373.0        2002       379.0        2003       161.20            4  ..........           1  ...........  ...........        0.08
    Kentucky Lock..................       481.5        2008       533.0        2009       533.0        2010        55.10            2       74.91           1       36.34         38.57        0.03
    Inner Harbor \4\...............       575.0        2009       576.4        2012       576.4        2014       109.70            5      322.37           2      117.58        204.78        3.75
    Greenup \5\....................       245.0        2008       240.7        2009       245.0        2020        26.50           12      163.92          11      163.92   ...........       81.96
    Myers \5\......................       182.1        2008       225.0        2010       182.1        2020         8.60           12       53.20          10       53.20   ...........       68.69
    Chickamauga \6\................       239.4        2010       239.4        2010       239.4        2015         1.96            5        5.43  ..........        5.43   ...........       34.11
                                    ----------------------------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL....................  ..........  ..........  ..........  ..........  ..........  ..........  ............          57    2,967.14          31      790.07      2,177.07      157.66
                                    ================================================================================================================================================================
    Fiscal Year 2002 Analy- sis....  ..........  ..........  ..........  ..........  ..........  ..........  ............          29    2,621.82          35    1,149.35      1,472.48      172.95
                                    ================================================================================================================================================================
    Change from 2002...............  ..........  ..........  ..........  ..........  ..........  ..........  ............  ..........      345.32  ..........     (359.28)       704.59      (15.29)
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Average Annual Benefits based on Fiscal Year 2002 Budget Justification of Expense, February 2002.
    \2\ Benefits foregone estimated from net present value of benefits in each year of delay, based on 50-year project life, and adjusted to fiscal year 2002 base year. Discount rate adjusted to
      6.125 percent.
    \3\ Locks are completed, dam construction remains.
    \4\ Inner Harbor ``Initial Optimum'' reflects Fiscal Year 2000 Optimum Schedule.
    \5\ Greenup and Myers ``Initial Optimum'' reflects Fiscal Year 2002 Optimum Schedule.
    \6\ Chickamauga not included in previous fiscal year 2002 analysis.

      Prepared Statement of the Association of State Dam Safety Officials
        Dear Chairman Domenici and Members of the Subcommittee: The
    Association of State Dam Safety Officials is pleased to offer this
    testimony on the President's proposed budget for the U.S. Army Corps of
    Engineers (USACOE) Fiscal Year 2004. The Association's testimony
    includes issues related to the safety and security of the dams owned or
    operated by the USACOE and in support of the National Inventory of Dams
    (NID) authorized by the Dam Safety and Security Act of 2002.
        The Association of State Dam Safety Officials is a national non-
    profit organization of more than 2,000 State, Federal and local dam
    safety professionals and private sector individuals dedicated to
    improving dam safety through research, education and communications.
    Our goal simply is to save lives, prevent damage to property and to
    maintain the benefits of dams by preventing dam failures. Several
    dramatic dam failures in the United States called attention to the
    catastrophic consequences of failures. The failure of the federally-
    owned Teton Dam in 1976 caused 14 deaths and over $1 billion in
    damages, and is a constant reminder of the potential consequences
    associated with dams and the obligations to assure that dams are
    properly constructed, operated and maintained.
                           national inventory of dams
        The National Inventory of Dams is a computer database, maintained
    by the USACOE, that houses vital information of Federal and non-Federal
    dams across the United States. The database tracks information about
    the dam's location, size, use, type, proximity to nearest town, hazard
    classification, age, height and many other technical data fields. The
    database can be used for States or Federal agencies to access
    comprehensive information for planning, security alerts or to use
    within a Graphic Information System (GIS) vital in tracking lifeline
    systems and responding to emergency events through using the geographic
    and mapping abilities along with the engineering information within the
    NID database.
        The NID can be used by policy makers as a tool when evaluating
    national or local dam safety issues. For example, it is extremely
    useful in establishing the average age of the dams in the United
    States, or identifying the number and location of a particular type of
    dam construction (i.e. the number and location of ``thin arch'' dams
    greater than 100 feet in height). In addition, the Federal Emergency
    Agency uses the State dam data to establish the amount of State grant
    assistance funds, in accordance with the National Dam Safety Program.
    It is essential that this inventory be accurate and current.
        There are over 78,000 dams on the National Inventory of Dams in the
    country. To have access to this critical data when needed and to be
    able to track trends in assessing dam safety improvements, it is
    essential that this data be current and accurate. The NID can meet this
    need, but it is only as accurate as the last update. The database must
    be continually updated, the dam information is constantly changing
    (i.e. new ownership, major repairs, removal of dams, increasing the
    height and storage, additional downstream development or changes to the
    dam's hazard classification). This data is now even more important as
    the intelligence community and Federal law enforcement have identified
    dams as a specific target of potential terrorists attacks. The data can
    also be of tremendous benefit to Federal agencies such as FEMA, NWS,
    USGS and the new Department of Homeland Security for locating large
    dams, for watershed planning, flood control planning or emergency
    response to failures or extreme storm events.
        The USACOE has done an excellent job in developing and maintaining
    the NID. Continuing updates and improvements to this database resource
    should be a high priority. Federal agencies that own dams as well as
    State dam safety programs provide updated information and corrections
    to the data fields, which provides for accurate and current data.
        The Association respectfully requests that the subcommittee
    recognize the importance of this national dam database and increase the
    appropriation amount from the proposed funding level in the President's
    budget of $300,000 to the full authorized funding amount of $500,000.
              dam safety, security, and operation and maintenance
        The USACOE is recognized as a national leader in dam construction
    and dam safety. The USACOE currently owns or operates 609 dams in the
    United States, and these dams, like other critical components of the
    national infrastructure are aging and the require vigilant inspection
    as well as routine maintenance. In addition, the security of our
    Nation's infrastructure is a major concern. Dams, especially the large
    Federally-owned dams are a potential target for terrorists attacks.
        The USACOE dams are typically very large, provide flood protection,
    water supply, hydropower, recreation and many are critical to the
    waterway navigation on the Nation's major rivers. The consequences of a
    failure or misoperation of one of these dams can cause enormous loss of
    life and property damage, as well as the loss of the benefits provided
    by the dam. Therefore, the Association strongly supports appropriations
    necessary to make needed repairs, to conduct security assessments and
    improvements wherever necessary. The Association believes that
    operation and maintenance are critical to the continued safe
    performance of the dams. Too often deferred maintenance causes a small
    problem to become larger and more costly; and if left unattended, may
    cause the dam to become more susceptible to failure.
        The Association respectfully asks that the subcommittee recognize
    that inspections, safety repairs, security and routine maintenance are
    all essential to assure the safety and the continuing benefits of
    USACOE dams.
        The Association specifically requests:
      --Increase in appropriations for the USACOE Dam Safety Program non-
            project management funds to $250,000 from the proposed $45,000;
      --Increase in appropriations for the USACOE Dam Security Program non-
            project management funds to $250,000 from the proposed $30,000
            to include assistance to the State dam safety programs in
            conducting security vulnerability assessments and for training
            in the dam security assessment tools such as RAM-D;
      --Increase in the USACOE ``Planning Assistance to States Program''
            Line A.1e.(1) from $6,000,000 to $10,000,000 to provide much
            needed assistance to the States to cost-share dambreak
            modeling, developing emergency evacuation plans and to jointly
            conduct security vulnerability assessments;
      --Appropriations of $40,000,000 for needed dam safety repairs to the
            Canton Dam in Oklahoma, the Tuttle Creek Dam in Kansas, the
            Clearwater Dam in Missouri and to complete the safety repairs
            to the Waterbury Dam in Vermont.
        Finally, while the security of the USACOE dams is currently a major
    priority, the continued safety, repair and maintenance of the USCOE
    dams should not be diminished. Improved security on an unsafe dam may
    deter an attack, but it still leaves the lives and property downstream
    at an unnecessary risk. The Association also respectfully requests that
    the fiscal year 2004 funding for Line B.6 Dam Safety and Seepage/
    Stability Correction Program be increased to $15,000,000 from the
    proposed $8,000,000; and that the Operation and Maintenance budget be
    increased from the proposed $1,939,000,000 to $2,000,000,000 for fiscal
    year 2004 with the additional funds dedicated to dam safety efforts not
    currently funded in the budget.
        Mr. Chairman and members of the Subcommittee, thank you for this
    opportunity to provide this testimony in support of safe dams. We look
    forward to working with the Subcommittee and staff on this important
    national issue.
                                     ______

                 Prepared Statement of Volusia County, Florida
        On behalf of our citizens and fishermen, Volusia County, Florida
    requests that the Energy & Water Subcommittee appropriate:
      --$3,000,000 in fiscal year 2004 to the U.S. Army Corps of Engineers'
            (Corps) Construction account to fund a 1,000 foot seaward
            extension of the South Jetty of the Ponce DeLeon Inlet. The
            Committee provided $1 million for construction of this project
            in fiscal year 2003. The South Jetty seaward extension is
            essential for safe inlet navigation and protection of the Inlet
            channel and the North Jetty landward extension funded in fiscal
            years 1999, 2000, and 2002.
      --$3,000,000 in fiscal year 2004 to the Corps' Operations and
            Maintenance account to fund the removal of 300,000 cubic yards
            of sand from the North Cut of the Ponce DeLeon Inlet to provide
            for safe navigation until the South Jetty construction is
            complete.
        A more detailed case history and description of the situation and
    projects follow below.
        Ponce DeLeon Inlet is located on the east coast of Florida, about
    10 miles south of the City of Daytona Beach in Volusia County. The
    Inlet is a natural harbor connecting the Atlantic Ocean with the
    Halifax River and Indian Rivers and the Atlantic Intra-coastal Waterway
    (AICW). Ponce DeLeon Inlet provides the sole ocean access to all of
    Volusia County and is the only stabilized inlet on the east coast of
    Florida between St. Augustine and Cape Canaveral, a distance of 112
    miles. Fishing parties and shrimp and commercial fisherman bound for
    New Smyrna Beach or Daytona Beach use the Inlet, as well as others
    entering for anchorage. Nearby fisheries enhanced by the County's
    artificial reef program attract both commercial and sport fisherman.
    Head boat operators also provide trips to view marine life and space
    shuttle launches from Cape Canaveral. In addition, U.S. Coast Guard
    Lifeboat Station Ponce is located immediately inside Ponce de Leon
    Inlet and provides navigation safety and security for boaters,
    fisherman, divers and sailors from the entire east central Florida
    region.
        Unfortunately, the Inlet is highly unstable and, despite numerous
    navigation projects, continues to threaten safe passage for the charter
    boat operators and commercial fisherman who rely on the access it
    provides for their livelihood. Recreational boaters and Coast Guard
    operators are also at risk passing through this unstable inlet. The
    shoaling of the channels in the Inlet so restricts dependable
    navigation that the Coast Guard no longer marks the north channel in
    order to discourage its use. The Coast Guard continues to move the
    south and entrance channel markers and provides warnings that local
    knowledge and extreme caution must be used in navigating the inlet.
    More seriously, the Coast Guard search and rescue data for fiscal years
    1981-1995 show that 20 deaths have resulted from vessels capsizing in
    the Inlet, the direct result of the Inlet's instability. One hundred
    forty-seven vessels capsized and 496 vessels ran aground in the Inlet
    during the same period.
        The Federal interest in navigation through the Ponce DeLeon Inlet
    dates back to 1884 and continues to the present. The existing
    navigation project was authorized by the Rivers and Harbors Act of
    1965. The construction authorized by that Act, including ocean jetties
    on the north and south sides of the Inlet, was completed in July 1972.
    It became evident soon after completion of the authorized project that
    the project did not bring stability to the Inlet. A strong northeaster
    in February 1973 created a breach between the western end of the North
    Jetty and the sand spit the Jetty was connected to inside the Inlet.
    The breach allowed schoaling to occur that was serious enough to close
    boat yards and require almost $2 million worth of repairs, including
    extending the western end of the North Jetty.
        Under the existing maintenance agreement entered into upon
    completion of the construction, the Corps periodically performs
    maintenance on the Inlet. Maintenance projects have included several
    dredging efforts, adding stone sections to the south side of the North
    Jetty, extending the westward end of the North Jetty for the second
    time, and closing the North Jetty weir. Prior to the North Jetty
    project discussed below, the Corps' last maintenance was dredging,
    completed on the entrance channel in January 1990.
        In fiscal year 1998, the Corps received a $3,500,000 appropriation
    for emergency maintenance on the North Jetty. Migration of the entrance
    channel undermined the North Jetty, seriously threatening its
    structural integrity. The fiscal year 1998 funds were used to construct
    a granite rock scour apron for the 500 to 600 feet of where the Jetty
    was undermined.
        In fiscal year 1999, the Corps received $4,034,000 from the
    Operations and Maintenance account to extend the North Jetty of the
    Inlet landward by 800 feet. This maintenance project was completed in
    July 2002 to prevent the erosion that will cause outflanking of the
    North Jetty. Continued outflanking of the west end of the North Jetty
    could create a new inlet for the Halifax and Indian Rivers resulting in
    major changes to the Ponce DeLeon Inlet. The resultant shoaling of both
    the north and south channels, as well as changes to the entrance
    channel, would make passage through the inlet extremely dangerous and
    unpredictable.
        In fiscal year 2000, the Corps received $7,696,000 in their
    Operations and Maintenance account for use in the Ponce DeLeon Inlet.
    This appropriation provided funding to continue the North Jetty
    project, funding for surveys designed to determine the scope of a new
    maintenance contract for the Ponce De Leon Inlet, and funding for a
    dredging project to address a minor maintenance issue under the
    existing maintenance contract.
        In fiscal year 2001, the Corps received $46,000 in their Operations
    and Maintenance account for standard maintenance of the Ponce DeLeon
    Inlet.
        In fiscal year 2002, Congress appropriated $2.032 million to the
    Corps' Operations and Maintenance account for completion of the North
    Jetty construction. The Corps completed construction of this project in
    July 2002.
        In fiscal year 2003, Congress provided $1 million in the Corps'
    Construction account for commencement of the South Jetty oceanward
    extension, as authorized by WRDA 1999.
        For fiscal year 2004, Volusia County requests that the Corps
    receive $3 million for the balance of the Federal share of construction
    funds for the South Jetty oceanward extension. The Corps anticipates
    that the construction of the Jetty extensions will help stabilize the
    Inlet and reduce future maintenance costs. In addition to creating a
    safer navigation environment, completion of the North and South Jetty
    will save future Federal maintenance costs.
        The Ponce DeLeon Inlet presents a serious engineering challenge,
    the success of which is measured in terms of human life and vessel
    damage. The existing project has failed to stabilize the Inlet.
    Extending the North Jetty was the first step toward correcting the
    failure and meeting the challenge. Full funding of the 1,000 foot
    oceanward extension of the South Jetty is the next critical step toward
    providing safe passage for the commercial and recreational boaters in
    Volusia County.
        State agencies, including the Florida Inland Navigation District
    and the Florida Department of Environmental Protection agree and
    therefore have committed to assisting the County in meeting the local
    cost share. In addition, providing these funds at this time is likely
    to prevent the need for a much more substantial maintenance project in
    the near future.
        In addition to the construction funding for the jetty projects to
    protect the Ponce DeLeon Inlet, the County also requests $3,000,000 be
    appropriated in the Corps' Operations and Maintenance account, for the
    Corps to remove 300,000 cubic yards of sand from the North Cut of the
    Ponce DeLeon Inlet. As discussed above, the North Jetty construction
    was completed in July 2002 and the South Jetty construction will begin
    this year. Maintenance dredging is needed until both jetties are
    constructed.
        Until both the North and South Jetty projects are operational, sand
    continues to shoal in the navigation channels of the Ponce DeLeon
    Inlet. The shoaling creates unsafe navigation conditions, thereby
    impeding commercial and recreational traffic. Removing 300,000 cubic
    feet of sand from the North Cut of the Inlet will greatly improve safe
    navigation. Finally, this effort is supported locally, as evidenced by
    the County's grant of $395,000 to the Corps for emergency dredging of
    the North Cut in fiscal year 2003.
        Thank you for your consideration of this request.
                                     ______

              Prepared Statement of the Seminole Tribe of Florida
        The Seminole Tribe of Florida is pleased to submit this statement
    regarding the fiscal year 2004 budget for the Army Corps of Engineers
    (Corps). The Tribe asks that Congress provide $14,835,000 in the Corps'
    construction budget for critical projects in the South Florida
    Ecosystem, as authorized in section 208 of the Water Resources
    Development Act (WRDA) of 1999. On January 7, 2000, the Tribe and the
    Corps signed a Project Coordination Agreement for the Big Cypress
    Reservation's critical project. The Tribe's critical project includes a
    complex water conservation plan and a canal that transverses the
    Reservation. In signing this Agreement, the Tribe, as the local
    sponsor, committed to funding half of the cost of this approximately
    $50 million project. Design and planning efforts continue, and the
    first phase of construction is nearly complete.
        The Tribe's critical project is a part of the Tribe's Everglades
    Restoration Initiative, which includes the design and construction of a
    comprehensive water conservation system. This project is designed to
    improve the water quality and natural hydropatterns in the Big Cypress
    Basin. This project will contribute to the overall success of both the
    Federal and the State governments' multi-agency effort to preserve and
    restore the delicate ecosystem of the Florida Everglades. In
    recognition of this contribution, the Seminole Tribe's Restoration
    Initiative has been endorsed by the South Florida Ecosystem Restoration
    Task Force.
                         the seminole tribe of florida
        The Seminole Tribe lives in the Florida Everglades. The Big Cypress
    Reservation is located in the western basins, directly north of the Big
    Cypress National Preserve. The Everglades provide many Seminole Tribal
    members with their livelihood. Traditional Seminole cultural,
    religious, and recreational activities, as well as commercial
    endeavors, are dependent on a healthy Everglades ecosystem. In fact,
    the Tribe's identity is so closely linked to the land that Tribal
    members believe that if the land dies, so will the Tribe.
        During the Seminole Wars of the 19th Century, the Tribe found
    protection in the hostile Everglades. But for this harsh environment
    filled with sawgrass and alligators, the Seminole Tribe of Florida
    would not exist today. Once in the Everglades, Seminoles learned how to
    use the natural system for support without harm to the environment that
    sustained them. For example, the native dwelling, the chickee, is made
    of cypress logs and palmetto fronds and protects its inhabitants from
    the sun and rain, while allowing maximum circulation for cooling. When
    a chickee has outlived its useful life, the cypress and palmetto return
    to the earth to nourish the soil.
        In response to social challenges within the Tribe, Tribal elders
    provided guidance. Tribal elders directed the Tribe's leadership to
    look to the land, for when the land was ill, the Tribe would soon be
    ill as well. When looking at the land, the leadership saw the
    Everglades in decline and recognized that the Tribe had to help
    mitigate the impacts of man on this natural system. At the same time,
    tribal members acknowledged that this land must sustain the Tribe and
    its culture. The clear message from the Tribal elders and the land
    called for a way of life to preserve the land and the Tribe. Tribal
    members must be able to work and sustain themselves. Tribal leadership
    needs to protect the land and the animals, while also protecting Tribal
    farmers and ranchers.
        Recognizing the needs of the land and the people, the Tribe, along
    with its consultants, designed a plan to mitigate the harm to the land
    and water systems within the Reservation while ensuring a sustainable
    future for the Seminole Tribe of Florida. The restoration plan will
    allow Tribal members to continue their farming and ranching activities
    while improving water quality and restoring natural hydroperiod to
    large portions of the native lands on the Reservation and ultimately,
    positively effecting the Big Cypress National Preserve and Everglades
    National Park.
        The Seminole Tribe's project addresses the environmental
    degradation wrought by decades of Federal flood control construction
    and polluted urban and other agricultural runoff. The interrupted sheet
    flow and hydroperiod have stressed native species and encouraged the
    spread of exotic species. Nutrient-laden runoff has supported the rapid
    spread of cattails, which choke out the periphyton algae mat and
    sawgrass necessary for the success of the wet/dry cycle that supports
    the wildlife of the Everglades.
        The Seminole Tribe designed an Everglades Restoration project that
    reflects the need to live off of the land while minimizing impacts on
    the Everglades. The Seminole Tribe is committed to improving the water
    quality and flows on the Big Cypress Reservation. The Tribe already has
    committed significant resources to the design and construction of this
    project and to its water quality data collection and monitoring system.
    The Tribe is willing to continue its efforts and to commit more
    resources, for its cultural survival is at stake.
                 seminole tribe's big cypress critical project
        The Tribe has developed a water conservation plan that will improve
    water quality essential to the cleanup of the Everglades ecosystem and
    to plan for the storage and conveyance of Tribal water rights. The
    Tribe's Everglades Restoration Initiative is designed to mitigate the
    degradation the ecosystem has suffered through decades of flood control
    projects and urban and agricultural use and ultimately to restore the
    Nation's largest wetlands to a healthy state.
        The Seminole Tribe's critical project, a part of the water
    conservation plan, provides for the design and construction of flood
    control, storage, and treatment facilities on the western half of the
    Big Cypress reservation with other conveyance facilities on the eastern
    side. The project elements include canal and pump conveyance systems,
    including major canal bypass structures, irrigation storage cells, and
    water quality polishing areas. This project will enable the Tribe to
    meet targets for low phosphorus concentrations, as well as to convey
    and store irrigation water and improve flood control. It will also
    provide an important public benefit: a new system to convey excess
    water from the western basins to the Big Cypress National Preserve,
    where water is vitally needed for rehydration and restoration of
    natural systems within the Preserve.
                                   conclusion
        Improving the water quality of the basins feeding into the Big
    Cypress National Preserve and the Everglades National Park is vital to
    restoring the Everglades for future generations. Congress has
    acknowledged this need through the passage of the last three Water
    Resource Development Acts. This Committee has consistently shown its
    support through appropriating requested amounts over the last 6 fiscal
    years. By continuing to grant this appropriation request for critical
    project funding, the Federal government will take another substantive
    step towards improving the quality of the surface water that flows over
    the Big Cypress Reservation and on into the delicate Everglades
    ecosystem. Such responsible action with regard to the Big Cypress
    Reservation, which is Federal land held in trust for the Tribe, will
    send a clear message that the Federal government is committed to
    Everglades restoration and the Tribe's stewardship of its land.
        Completion of the critical project requires a substantial
    commitment from the Tribe, including the dedication of over 2,400 acres
    of land for water management improvements and meeting a 50/50 cost
    share. The Tribe has initiated the first phase of construction with the
    main conveyance canal. As the Tribe moves forward with its contribution
    to the restoration of the South Florida ecosystem, increasing Federal
    financial assistance will be needed as well.
        The Tribe has demonstrated its economic commitment to the
    Everglades Restoration effort; the Tribe is asking the Federal
    government to also participate in that effort. This effort benefits not
    just the Seminole Tribe, but all Floridians who depend on a reliable
    supply of clean, fresh water flowing out of the Everglades, and all
    Americans whose lives are enriched by this unique national treasure.
        Thank you for the opportunity to present the request of the
    Seminole Tribe of Florida. The Tribe will provide additional
    information upon request.
                                     ______

      Prepared Statement of the Riverside County Flood Control and Water
                             Conservation District
                      murrieta creek flood control project
        Murrieta Creek poses a severe flood threat to the cities of
    Murrieta and Temecula. Over $10 million in damages was experienced in
    the two cities as a result of Murrieta Creek flooding in 1993. The 1997
    Energy and Water Appropriations Act dedicated $100,000 to conducting a
    Reconnaissance Study of watershed management in the Santa Margarita
    Watershed ``including flood control, environmental restoration,
    stormwater retention, water conservation and supply, and related
    purposes''. The study effort was initiated in April 1997 and completed
    the following December. The Reconnaissance Study identified a Federal
    interest in flood control on the Murrieta sub-basin, and recommended
    moving forward with a detailed feasibility study for a flood control
    project on Murrieta Creek.
        Efforts on the Feasibility Study began in April 1998 and were
    completed in September 2000. The Feasibility Study Report recommends
    the implementation of Alternative 6, the Locally Preferred Plan (LPP)
    for flood control, environmental restoration and recreation. The LPP is
    endorsed by the Cities of Temecula and Murrieta and by the community as
    a whole.
        H.R. 5483, the Energy and Water Appropriations Act of 2000 included
    specific language authorizing the Corps to construct ``the locally
    preferred plan for flood control, environmental restoration and
    recreation described as Alternative 6, based on the Murrieta Creek
    Feasibility Report and Environmental Impact Statement dated September
    2000''.
        After finalizing the necessary cost sharing agreement in February
    2001, the Corps initiated the detailed engineering design necessary to
    develop construction plans and specifications for a Murrieta Creek
    Project utilizing a fiscal year 2001 appropriation of $750,000. The
    project received an additional appropriation of $1,000,000 for
    engineering design efforts in fiscal year 2002. Those funds were
    utilized to develop design-level topographic mapping for the entire 7-
    mile long project, to complete all necessary geotechnical work, and to
    begin the preparation of construction drawings for the initial phases
    of construction.
        The Murrieta Creek Flood Control Project is being designed and will
    be constructed in four distinct phases. Phases 1 and 2 include channel
    improvements through the city of Temecula. Phase 3 involves the
    construction of a 240-acre detention basin, including the 160-acre
    restoration site and over 50 acres of recreational facilities. Phase 4
    of the project will include channel improvements through the city of
    Murrieta. Equestrian, bicycle and hiking trails as well as a continuous
    habitat corridor for wildlife are components of this and every phase of
    the project.
        The Omnibus Appropriations Bill for fiscal year 2003 provides $1
    million for a new construction start for this critical public safety
    project. Construction activities on Phase 1 of the project will
    commence in the Fall of 2003. The appropriation also allows the Corps
    to complete its engineering design work for Phase 2 of the project.
    Phase 2 traverses the area of Temecula hardest hit with damages from
    the severe flooding of 1993. The Corps anticipates having a Phase 2
    construction contract ready to award in the Summer of 2004. The
    District therefore respectfully requests the Committee's support of a
    $4 million appropriation in fiscal year 2004 so that the Corps may
    complete construction on Phase 1, and initiate construction on Phase 2
    of the long awaited Murrieta Creek Flood Control, Environmental
    Restoration and Recreation Project.
                           santa ana river--mainstem
        The Water Resources Development Act of 1986 (Public Law 99-662)
    authorized the Santa Ana River--All River project that includes
    improvements and various mitigation features as set forth in the Chief
    of Engineers' Report to the Secretary of the Army. The Boards of
    Supervisors of Orange, Riverside and San Bernardino Counties continue
    to support this critical project as stated in past resolutions to
    Congress.
        The three local sponsors and the Corps signed the Local Cooperation
    Agreement (LCA) in December 1989. The first of five construction
    contracts started on the Seven Oaks Dam feature in the spring of 1990
    and the dam was officially completed on November 15, 1999. A dedication
    ceremony was held on January 7, 2000. Significant construction has been
    completed on the lower Santa Ana River Channel and on the San Timoteo
    Creek Channel. Construction activities on Oak Street Drain and the Mill
    Creek Levee have been completed. Seven Oaks Dam was turned over to the
    Local Sponsors for operation and maintenance on October 1, 2002.
        For fiscal year 2004, an appropriation of $5.7 million is necessary
    to initiate construction activities on several features within ``Reach
    9'' of the Santa Ana River immediately downstream of Prado Dam. This
    segment of the Santa Ana River project is the last to receive flood
    protection improvements. The streambed existing today in a relatively
    natural state would receive only localized levee and slope revetment
    treatment to protect existing development along its southerly bank.
    Approximately $500,000 of the total $5.7 million appropriation
    requested for Reach 9 would fund environmental mitigation measures
    necessitated by the Corps' construction activities.
        The completion of landscaping activities on Reaches 5, 6 and 8 of
    the Santa Ana River Channel in Orange County would require a $5 million
    appropriation. The removal of accumulated sediment within an already
    completed section of the Santa Ana River Channel near its outlet to the
    Pacific Ocean will necessitate an fiscal year 2004 appropriation of $5
    million. This dredging work is necessary before project turnover to the
    Local Sponsors for operation and maintenance.
        Construction activities on the last remaining phase of San Timoteo
    Creek Channel, a Mainstem feature located within San Bernardino County,
    would be completed given a final $15 million appropriation.
        The Prado Dam feature of the Santa Ana River Mainstem project is in
    need of several major upgrades in order that it mitigate the potential
    impacts of a 100-year storm. All of the engineering work necessary to
    redesign the dam is now complete. In fiscal year 2003, the Corps was
    able to award a construction contract to begin modifications to the dam
    embankment and outlet works.
        An fiscal year 2004 appropriation of $37.164 million would allow
    the Corps to continue with the construction of improvements to Prado
    Dam's outlet works and embankment, and would fund all necessary
    environmental mitigation measures. We, therefore, respectfully request
    that the Committee support an overall $67,864,000 appropriation of
    Federal funding for fiscal year 2004 for the Santa Ana River Mainstem
    project including Prado Dam.
                 san jacinto & santa margarita river watersheds
                         special area management plans
        The County of Riverside recognizes the interdependence between the
    region's future transportation, habitat, open space, and land-use/
    housing needs. In 1999, work was initiated on Riverside County's
    Integrated Planning program (RCIP) to determine how best to balance
    these factors. The plan will create regional conservation and
    development plans that protect entire communities of native plants and
    animals while streamlining the process for compatible economic
    development in other areas. The major elements of the plan include
    water resource identification, multi-species planning, land use and
    transportation.
        In order to achieve a balance between aquatic resource protection
    and economic development, the Corps is developing what are termed
    Special Area Management Plans (SAMP) for both the San Jacinto and Santa
    Margarita Watersheds. This comprehensive planning effort will be used
    to assist Federal, State and local agencies with their decision making
    and permitting authority to protect, restore and enhance aquatic
    resources while accommodating various types of development activities.
    The Santa Margarita and San Jacinto watersheds include such resources
    as woodlands, wetlands, freshwater marshes, vernal pools, streams,
    lakes and rivers.
        The final product of the SAMP will be the establishment of an
    abbreviated or expedited regulatory permit by the Corps under Section
    404 of the Clean Water Act. The Corps' effort includes facilitating
    meetings between all potential watershed partners, and the integration
    of the joint study effort with the planning efforts of the balance of
    the RCIP project.
        The $500,000 Federal appropriation received for fiscal year 2001
    allowed the Corps to initiate work on this 3 year, $5.5 million SAMP
    effort. The $2 million appropriation received in fiscal year 2002
    allowed the Corps to make significant progress on a ``landscape level
    aquatic resource delineation'', and to initiate a functional assessment
    to determine the value of waters and wetlands. The $1 million
    appropriation received for fiscal year 2003 allowed the Corps to
    complete their wetlands delineation effort.
        Further funding is now needed to complete the SAMP effort. We,
    therefore, respectfully request that the Committee support a combined
    $2,000,000 appropriation of Federal funding for fiscal year 2004 for
    the Corps to continue its work on the Special Area Management Plans for
    the San Jacinto and Santa Margarita River Watersheds.
                                     ______

     Prepared Statement of the Metropolitan Water Reclamation District of
                                Greater Chicago
        On behalf of the Metropolitan Water Reclamation District of Greater
    Chicago (District), I want to thank the Subcommittee for this
    opportunity to present our priorities for fiscal year 2004 and, at the
    same time, express our appreciation for your support of the District's
    projects in the years past. The District is the local sponsor for three
    Corps of Engineers priority projects of the Chicagoland Underflow Plan:
    the O'Hare, McCook and Thornton Reservoirs. We are requesting the
    Subcommittee's full support for McCook and Thornton Reservoirs, as the
    O'Hare Reservoir has been completed. Specifically, we request the
    Subcommittee to include a total of $32,000,000 in construction funding
    for the McCook and Thornton Reservoir projects in the bill. The
    following text outlines these projects and the need for the requested
    funding.
                         the chicagoland underflow plan
        The Chicagoland Underflow Plan (CUP) consists of three reservoirs:
    the O'Hare, McCook and Thornton Reservoirs. These reservoirs are a part
    of the Tunnel and Reservoir Plan (TARP). The O'Hare Reservoir Project
    was fully authorized for construction in the Water Resources
    Development Act of 1986 (Public Law 99-662) and completed by the Corps
    in fiscal year 1999. This reservoir is connected to the existing O'Hare
    segment of the TARP. Adopted in 1972, TARP was the result of a multi-
    agency effort, which included officials of the State of Illinois,
    County of Cook, City of Chicago, and the District.
        TARP was designed to address the overwhelming water pollution and
    flooding problems of the Chicagoland combined sewer areas. These
    problems stem from the fact that the capacity of the area's waterways
    has been overburdened over the years and has become woefully inadequate
    in both hydraulic and assimilative capacities. These waterways are no
    longer able to carry away the combined sewer overflow (CSO) discharges
    nor are they able to assimilate the pollution associated with these
    discharges. Severe basement flooding and polluted waterways (including
    Lake Michigan, which is the source of drinking water for millions of
    people) is the inevitable result. We point with pride to the fact that
    TARP was found to be the most cost-effective and socially and
    environmentally acceptable way for reducing these flooding and water
    pollution problems. Experience to date has reinforced such findings
    with respect to economics and efficiency.
        The TARP plan calls for the construction of the new ``underground
    rivers'' beneath the area's waterways. The ``underground rivers'' are
    tunnels up to 35 feet in diameter and 350 feet below the surface. To
    provide an outlet for these tunnels, reservoirs will be constructed at
    the end of the tunnel systems. Approximately 93.4 miles of tunnels,
    constructed at a total cost of $2.0 billion, are operational. Another
    8.1 miles of tunnels, costing $141 million, are substantially complete
    and the final 7.9 miles of tunnels, costing $168 million, are under
    construction. The tunnels capture the majority of the pollution load by
    capturing all of the small storms and the first flush of the large
    storms. The completed O'Hare CUP Reservoir provides 350 million gallons
    of storage. This Reservoir has a service area of 11.2 square miles and
    provides flood relief to 21,535 homes in Arlington Heights, Des Plaines
    and Mount Prospect. In its first 5 years of operation, O'Hare CUP
    Reservoir has yielded $57.4 million in flood damage reduction benefits,
    which exceeds its $44.5 million construction costs. The Thornton and
    McCook Reservoirs are currently under construction, but until they are
    completed significant areas will remain unprotected. Without these
    outlets, the local drainage has nowhere to go when large storms hit the
    area.
        Since its inception, TARP has not only abated flooding and
    pollution in the Chicagoland area, but has helped to preserve the
    integrity of Lake Michigan. In the years prior to TARP, a major storm
    in the area would cause local sewers and interceptors to surcharge
    resulting in CSO spills into the Chicagoland waterways and during major
    storms into Lake Michigan, the source of drinking water for the region.
    Since these waterways have a limited capacity, major storms have caused
    them to reach dangerously high levels resulting in massive sewer
    backups into basements and causing multi-million dollar damage to
    property.
        Since implementation of TARP, 734 billion gallons of CSOs have been
    captured by TARP, that otherwise would have reached waterways. Area
    waterways are once again abundant with many species of aquatic life and
    the riverfront has been reclaimed as a natural resource for recreation
    and development. Closure of Lake Michigan beaches due to pollution has
    become a rarity. After the completion of both phases of TARP, 99
    percent of the CSO pollution will be eliminated. The elimination of
    CSOs will reduce the quantity of discretionary dilution water needed to
    keep the area waterways fresh. This water can be used instead for
    increasing the drinking water allocation for communities in Cook, Lake,
    Will and DuPage counties that are now on a waiting list to receive such
    water. Specifically, since 1977, these counties received an additional
    162 million gallons of Lake Michigan water per day, partially as a
    result of the reduction in the District's discretionary diversion since
    1980. Additional allotments of Lake Michigan water will be made to
    these communities, as more water becomes available from reduced
    discretionary diversion.
        With new allocations of lake water, more than 20 communities that
    previously did not get lake water are in the process of building, or
    have already built, water mains to accommodate their new source of
    drinking water. The new source of drinking water will be a substitute
    for the poorer quality well water previously used by these communities.
    Partly due to TARP, it is estimated by IDOT that between 1981 and 2020,
    283 million gallons per day of Lake Michigan water would be added to
    domestic consumption. This translates into approximately 2 million
    additional people that would be able to enjoy Lake Michigan water. This
    new source of water supply will not only benefit its immediate
    receivers but will also result in an economic stimulus to the entire
    Chicagoland area by providing a reliable source of good quality water
    supply.
                       the mccook and thornton reservoirs
        The McCook and Thornton Reservoirs of the Chicagoland Underflow
    Plan (CUP) were fully authorized for construction in the Water
    Resources Development Act of 1988 (Public Law 100-676). These CUP
    reservoirs, as previously discussed, are a part of TARP, a flood
    protection plan that is designed to reduce basement flooding due to
    combined sewer back-ups and inadequate hydraulic capacity of the urban
    waterways.
        These reservoirs will provide a storage capacity of 18 billion
    gallons and will provide annual benefits of $115 million. The total
    potential annual benefits of these projects are approximately twice as
    much as their total annual cost. The District, as the local sponsor,
    has acquired the land necessary for these projects, and will meet its
    cost sharing obligations under Public Law 99-662.
        These projects are a very sound investment with a high rate of
    return. They will enhance the quality of life, safety and the peace of
    mind of the residents of this region. The State of Illinois has
    endorsed these projects and has urged their implementation. In
    professional circles, these projects are hailed for their
    farsightedness, innovation, and benefits.
        Based on two successive Presidentially-declared flood disasters in
    our area in 1986 and again in 1987, and dramatic flooding in the last
    several years, we believe the probability of this type of flood
    emergency occurring before implementation of the critical flood
    prevention measure is quite high. As the public agency for the greater
    Chicagoland area responsible for water pollution control, and as our
    past sponsorship for flood control projects, we have an obligation to
    protect the health and safety of our citizens. We are asking your
    support in helping us achieve this necessary and important goal of
    construction completion.
        We have been very pleased that over the years the Subcommittee has
    seen fit to include critical levels of funds for these important
    projects. We were delighted to see the $14,000,000 in construction
    funds for the McCook and Thornton Reservoirs included in the Omnibus
    Appropriations bill for fiscal year 2003. However, it is important that
    we receive a total of $32,000,000 in construction funds in fiscal year
    2004 to maintain the commitment and accelerate these projects. This
    funding is critical to continue the construction of the McCook
    Reservoir on schedule, in particular, to complete construction of the
    grout curtain, distribution tunnels, and pumps and motors and to
    accelerate the design of the Thornton Reservoir. The community has
    waited long enough for protection and we need these funds now to move
    the project in construction. We respectfully request your consideration
    of our request.
                                    summary
        Our most significant recent flooding occurred on February 20, 1997,
    when almost 4 inches of rain fell on the greater Chicagoland area. Due
    to the frozen ground, almost all of the rainfall entered our combined
    sewers, causing sewerage back-ups throughout the area. When the
    existing TARP tunnels filled with approximately 1.2 billion gallons of
    sewage and runoff, the only remaining outlets for the sewers were our
    waterways. Between 9:00 p.m. and 3:00 a.m., the Chicago and Calumet
    Rivers rose 6 feet. For the first time since 1981 we had to open the
    locks at all three of the waterway control points; these include
    Wilmette, downtown Chicago, and Calumet. Approximately 4.2 billion
    gallons of combined sewage and stormwater had to be released directly
    into Lake Michigan.
        Given our large regional jurisdiction and the severity of flooding
    in our area, the Corps was compelled to develop a plan that would
    complete the uniqueness of TARP and be large enough to accommodate the
    area we serve. With a combined sewer area of 375 square miles,
    consisting of the city of Chicago and 51 contiguous suburbs, there are
    1,443,000 structures within our jurisdiction, which are subject to
    flooding at any time. The annual damages sustained exceed $150 million.
    If TARP, including the CUP Reservoirs were in place, these damages
    could be eliminated. We must consider the safety and peace of mind of
    the two million people who are affected as well as the disaster relief
    funds that will be saved when these projects are in place. As the
    public agency in the greater Chicagoland area responsible for water
    pollution control, and as the regional sponsor for flood control, we
    have an obligation to protect the health and safety of our citizens. We
    are asking your support in helping us achieve this necessary and
    important goal. It is absolutely critical that the Corps' work, which
    has been proceeding for a number of years, now proceeds on schedule
    through construction.
        Therefore, we urgently request that a total of $32,000,000 in
    construction funds be made available in the fiscal year 2004 Energy and
    Water Development Appropriations Act to continue construction of the
    McCook and Thornton Reservoir Projects.
        Again, we thank the Subcommittee for its support of this important
    project over the years, and we thank you in advance for your
    consideration of our request this year.
                                     ______

           Prepared Statement of the Calaveras County Water District
              sacramento and san joaquin comprehensive basin study
       calaveras county conjunctive use and groundwater feasibility study
    Calaveras County Water District
        Calaveras County (County) is located in the central Sierra Nevada
    foothills about 25 miles east of the Sacramento-San Joaquin Delta
    (Delta). Ground elevations within the County increase from 200 feet
    above mean sea level near the northwest part of the County to 8,170
    feet near Alpine County. It is a predominately rural county with a
    relatively sparse population and agricultural and industrial
    development. Calaveras County is located within the watersheds of the
    Mokelumne, Calaveras, and Stanislaus Rivers. All these rivers flow
    west, through San Joaquin County into the Delta. Most of the County is
    underlain by the igneous and metamorphic rocks of the Sierra Nevada.
    Alluvial deposits of the Central Valley, which overlie the westward
    plunging Sierra Nevada, are present along an 80 square-mile area
    located along the western edge of the county and are part of the
    Eastern San Joaquin County Groundwater Basin (ESJCGB). This requested
    conjunctive use and groundwater feasibility study under the authority
    of the Corps of Engineers' Sacramento and San Joaquin Comprehensive
    Basin Study will be focused on the western part of Calaveras County.
        In the fall of 1946, the Calaveras County Water District (CCWD) was
    organized under the laws of the State of California as a public agency
    for the purpose of developing and administering the water resources in
    Calaveras County. Therefore, CCWD is a political subdivision of the
    State of California and is governed by the California Constitution and
    the California Government and Water Codes. CCWD is not a part of or
    under the control of the County of Calaveras. CCWD was formed to
    preserve and develop water resources and to provide water and sewer
    service to the citizens of Calaveras County.
        Under State law, CCWD, through its Board of Directors, has general
    powers over the use of water within its boundaries. These powers
    include but are not limited to: the right of eminent domain, authority
    to acquire, control, distribute, store, spread, sink, treat, purify,
    reclaim, process and salvage any water for beneficial use, to provide
    sewer service, to sell treated or untreated water, to acquire or
    construct hydroelectric facilities and sell the power and energy
    produced to public agencies or public utilities engaged in the
    distribution of power, to contract with the United States, other
    political subdivisions, public utilities, or other persons, and subject
    to the California State Constitution, levy taxes and improvements.
    Project Need
        The Calaveras County Conjunctive Use and Groundwater Feasibility
    Study is needed to address future increasing water demands, provide
    water supply reliability in extended droughts, and help mitigate
    groundwater overdraft conditions in the ESJCGB.
        The Calaveras County 1990 population totaled 32,000 people. By
    2040, the County population is estimated to be between 100,000 and
    150,000 (Source: Calaveras River Conjunctive Use Feasibility Study and
    Pilot Program Report prepared by Bookman-Edmonston, June 2001). The
    historic sparse population base has not required use of all the
    District's water supplies. The rate base also could not support
    construction of facilities needed to fully develop all the water
    resources available to the District. The county is now experiencing
    rapid growth, requiring the District to develop its remaining water
    supplies to meet the increasing demand.
        Multi-year droughts can threaten the District's ability to meet
    water demands in the County. For example, the District's Jenny Lind
    Water Treatment Plant is located on the Calaveras River a few miles
    downstream of New Hogan Reservoir and during extended droughts, reduced
    inflows into New Hogan increase the chance that there may not be enough
    water to meet the current water demands. With increasing water demands
    projected in the future, the water shortages will continue in dry years
    and may become prevalent in normal and wet years.
        The study area comprises the northeast portion of the ESJCGB as
    defined by the California Department of Water Resources (DWR). The
    ESJCGB is considered in an overdraft condition, and the western edge of
    the basin is subject to saline intrusion from the Delta. The California
    Department of Water Resources water level data for wells near the
    Calaveras-San Joaquin County line, have recorded water level declines
    ranging from 0.6 to 1.5 feet per year over the last 40 years. Without
    programs to mitigate the groundwater overdraft, groundwater levels will
    continue to decline in the groundwater basin.
    Project Benefit
        The Calaveras County Conjunctive Use and Groundwater Feasibility
    Study would be developed to identify and maximize the use of the
    District's surface water resources on the Mokelumne, Calaveras and
    Stanislaus Rivers in conjunction with the groundwater supply to improve
    supply reliability. The District currently does not use all of its
    available surface water from the rivers flowing through the County. The
    study would allow the District to investigate the use of more of its
    entitlement in wet years by recharging the groundwater basin with water
    the District is currently not using. The storage and transmission
    capacity of the groundwater basin would be used to store the banked
    surface water until it is needed. This water could then be used during
    an extended drought to supplement reduced surface water supplies to
    provide drinking water supplies to the area.
        Maintaining supplies in District reservoirs, especially during dry
    years, provides benefit to the District and other river water users
    like the Stockton East Water District located in San Joaquin County.
    Developing local/Federal studies and programs like the Calaveras County
    Conjunctive Use and Groundwater Feasibility Study provides local and
    regional benefits. It also provides additional statewide benefits by
    contributing to the CALFED solution of meeting local water needs. By
    meeting their own water needs, local areas are not dependent upon the
    State to develop water supplies for them. This is consistent with the
    goals of the CALFED Integrated Storage Investigation (ISI).
        Because of the overdraft of the ESJCGB, coupled with extended
    drought periods, reduced inflows increase the chance that there may not
    be enough water to meet current demands. Developing local/Federal
    studies like the Calaveras County Conjunctive Use and Groundwater
    Feasibility Study provides critical local and regional benefits
    allowing these areas to meet their own needs better.
        The District, therefore, respectfully requests the Committee's
    support of $1,000,000 in appropriations in fiscal year 2004 within the
    Corps of Engineers' Program under the authority of the Sacramento and
    San Joaquin Comprehensive Basin Study, so that the Corps may initiate a
    feasibility study with regard to Calaveras County Conjunctive Use and
    Groundwater.
    mokelumne river, calaveras river, and stanislaus river watersheds study
    Project Need
        The Watershed Management Study Calaveras County Water District
    (CCWD) is seeking under the Corps of Engineers' program, within the
    Sacramento and San Joaquin Comprehensive Basin Study authority,
    includes the Mokelumne River, Calaveras River and Stanislaus River
    Watersheds. It proceeds from the basic assumption that water resources
    management is most efficiently and effectively conducted on a watershed
    level.
        Calaveras County is located in the central Sierra Nevada foothills.
    CCWD is responsible for developing and administering the water
    resources of Calaveras County. Historically, a significant portion of
    the water needs of Calaveras County have been met mostly with surface
    water from the Mokelumne, Calaveras or Stanislaus Rivers.
        Groundwater was only used to meet demands in local areas. This
    proposed study area, which is part of the Eastern San Joaquin County
    Groundwater Basin (ESJCGB), has been identified by the State of
    California as being in a state of overdraft.
        In an effort to gain a better understanding of the condition of the
    water sources and the surrounding environment, this watershed
    management approach is being requested. Some of the objectives of such
    a study may include:
      --To restore, protect, and enhance water quality and associated
            aquatic resources and water supplies;
      --To conserve, protect, and restore the natural resources of the
            Mokelumne, Calaveras and Stanislaus Rivers Watersheds (land,
            water, forest, and wildlife);
      --To minimize the threat to life and the destruction of property and
            natural resources from flooding and to preserve (or re-
            establish) natural hydrologic functions;
      --To restore, protect, develop, and enhance the ecological, historic,
            cultural, recreational, and visual amenities of rural and urban
            areas within the watersheds and particularly along stream
            corridors.
        The terrain of the watershed varies from mild elevations and
    meadows in the western rolling foothills to more rugged mountains and
    wilderness in the eastern high Sierra region. Tourism and recreation,
    forest products, mineral resources, and agricultural products are
    significant elements of the area's economic base. As a result, a
    variety of land uses are found within the watersheds, including
    residential, forested, industrial, agricultural, and recreational.
    Residential land uses in Calaveras County are primarily rural
    residential, with the unincorporated community of San Andreas being the
    largest urban area within the watershed area. The California State
    Department of Finance (CSDF) estimates the 2000 population of Calaveras
    County to be about 38,500 persons.
        While CCWD has been pursuing watershed management study efforts
    since 2000 in partnership with adjoining counties for more focused
    watershed management efforts, specifically in the Calaveras River
    Watershed, a comprehensive management study coupling all of the three
    watersheds (Mokelumne, Calaveras and Stanislaus Rivers), which fall
    within the jurisdiction of CCWD is critical to better plan for both
    water quantity and quality issues, and the environmental and natural
    resources issues facing the watershed.
        The CCWD has not only been a principle partner in watershed
    management throughout the development of the more focused local
    watershed planning studies, but has been concerned about watershed
    issues since its very beginning as a water supply provider. CCWD
    believes that a healthy watershed, including healthy ecosystems and
    wildlife populations, makes the provision of clean drinking water
    easier for water districts.
        Because of the need for a comprehensive watershed management
    program given the diversity of water supply, quality, environmental,
    natural resources and the region's economic base, which is dependent on
    its natural resources, we believe such an effort is warranted.
        The District, therefore, respectfully requests the Committee's
    support of $500,000 in appropriations in fiscal year 2004 under the
    Corps of Engineer's program, within the authority of the Sacramento and
    San Joaquin Comprehensive Study, so that the Corps may initiate a
    feasibility study of the Mokelumne, Calaveras and the Stanislaus Rivers
    Watersheds within the service area of the CCWD.
                                     ______

         Prepared Statement of the Napa County Flood Control and Water
                             Conservation District
                  napa river flood control project--background
        The project is located in the city and county of Napa, California.
    The population in the city of Napa, approximately, 67,000 in 1994, is
    expected to exceed 77,000 this year. Excluding public facilities, the
    present value of damageable property within the project flood plain is
    well over $500 million. The Napa River Basin, comprising 426 square
    miles, ranging from tidal marshes to mountainous terrain, is subject to
    severe winter storms and frequent flooding. In the lower reaches of the
    river, flood conditions are aggravated by high tides and local runoff.
    Floods in the Napa area have occurred in 1955, 1958, 1963, 1965, 1986
    (flood of record), 1995, and 1997. In 1998, the river rose just above
    flood stage on three occasions, but subsided before major property
    damage occurred. In December of 2002, flooding occurred from the Napa
    Creek at the transition to the Napa River, resulting in damage to
    numerous residents and several businesses.
        Since 1962, twenty-seven major floods have struck the Valley
    region, exacting a heavy toll in loss of life and property. The flood
    on 1986, for example, killed three people and caused more than $100
    million in damage. Damages throughout Napa County totaled about $85
    million from the January and March 1995 floods. The floods resulted in
    27 businesses and 843 residences damaged countrywide. Almost all of the
    damages from the 1986, 1995, and 1997 floods were within the project
    area. Congress has authorized a flood control project since 1944, but
    due to expense, lack of public consensus on the design and concern
    about environment impacts, a project had never been realized. In mid-
    1995, Federal and State resource agencies reviewed the plan and gave
    notice to the Corps that this plan had significant regulatory hurdles
    to face.
                        approved plan--project overview
        In an effort to identify a meaningful and successful plan, a new
    approach emerged that looked at flood control from a broader, more
    comprehensive perspective. Citizens for Napa River Flood Management was
    formed, bringing together a diverse group of local engineers,
    architects, aquatic ecologists, business and agricultural leasers,
    environmentalists, government officials, homeowners and renters and
    numerous community organizations.
        Through a series of public meetings and intensive debate over every
    aspect of Napa's flooding problems, the Citizens for Napa River Flood
    Management crafted a flood management plan offering a range of benefits
    for the entire Napa region. The Corps of Engineers served as a partner
    and a resource for the group, helping to evaluate their approach to
    flood management. The final plan produced by the Citizens for Napa
    River Flood Management was successfully evaluated through the research,
    experience and state-of-the-art simulation tools developed by the Corps
    and numerous international experts in the field of hydrology and other
    related disciplines. The success of this collaboration serves as a
    model for the Nation.
        Acknowledging the river's natural state, the project utilizes a set
    of living river strategies that minimize the disruption and alteration
    of the river habitat, and maximizes the opportunities for environmental
    restoration and enhancement throughout the watershed.
        The Corps has developed the revised plan, which provides 100-year
    protection, with the assistance of the community and its consultants
    into the Supplemental General Design Memorandum (SGDM) and its
    accompanying draft Environmental Impact Statement/Environmental Impact
    Report (SEIS/EIR). Construction of the project began 2 years ago. The
    coalition plan now memorialized in the Corps final documents includes
    the following engineered components: lowering of old dikes, marsh plain
    and flood plain terraces, oxbow dry bypass, Napa Creek flood plain
    terrace, upstream and downstream dry culverts along Napa Creek, new
    dikes, levees and flood walls, bank stabilization, pump stations and
    detention facilities, and bridge replacements. The benefits of the plan
    include reducing or elimination of loss of life, property damage,
    cleanup costs, community disruption due to unemployment and lost
    business revenue, and the need for flood insurance. In fact, the
    project has created an economic renaissance in Napa with new
    investment, schools and housing coming into a livable community on a
    living river. As a key feature, the plan will improve water quality,
    create urban wetlands and enhance wildlife habitats.
        The plan will protect over 7,000 people and over 3,000 residential/
    commercial units from the 100-year flood event on the Napa River and
    its main tributary, the Napa Creek, and the project has a positive
    benefit-to-cost ratio under the Corps calculation. One billion dollars
    in damages will be saved over the useful life of the project. The Napa
    County Flood Control District is meeting its local cost-sharing
    responsibilities for the project. A countywide sales tax, along with a
    number of other funding options, was approved 4 years ago by a two-
    thirds majority of the county's voters for the local share. Napa is
    California's highest repetitive loss community. This plan is
    demonstrative of the disaster resistant community initiative, as well,
    as the sustainable development initiatives of FEMA and EPA.
                                project synopsis
    Fiscal Year 2003 Funding
        The 2003 appropriations bill included $9,000,000 to continue
    construction of the project. The funding was sought for demolition of
    buildings and fixtures on 24 parcels that have been acquired by the
    non-Federal sponsor, relocation of the Napa Valley Wine Train rail line
    for an approximate 3 mile distance, as well as relocation of the
    facilities serving this public utility, removal of 190,000 cubic yards
    of soil which was contaminated by petroleum products,, construction of
    marsh and flood plain terraces for an approximate 1.5 mile distance.
    Included in this amount is the reimbursement to the non-Federal sponsor
    for expenditures in excess of 45 percent of the total project costs to
    date. The local sponsor has expended $90 million plus as compared to
    Federal sponsor expenditures to date of approximately $20 million.
    Necessary Fiscal Year 2004 Funding
        Funding for the Napa River Project during 2004 in the amount of
    $24,000,000 is needed to continue construction of the project. These
    funds will be used to accomplish the following tasks:
      --Complete HTRW remediation along the east side of the river for
            additional 2 miles involving removal of an additional 200,000
            cubic yards of contaminated soil;
      --Initiate and complete the Contract 1B excavation work in Kennedy
            Park;
      --Initiate Contract 2East excavation work on the east side of river
            from Imola to the Bypass;
      --Continue engineering and design on future contracts;
      --Accomplish Construction Management on contract underway;
      --Initiate reimbursement of local sponsor with funds not required for
            the above.
        Included in this amount is the reimbursement to the non-Federal
    sponsor for expenditures in excess of 45 percent of the total project
    costs to date. By the end of June, 2003 the non-Federal sponsor will
    have expended $150 million.
                  napa valley watershed management--background
        Napa Valley watershed faces many challenges and stresses to its
    environmental health and flood management abilities. From a healthy
    river point of view, the Napa River has been on a recovery path since
    its low point in the 1960's, when the last of the native salmon were
    taken from the system by severe water pollution and habitat
    destruction. Steelhead trout have survived as a remnant population of
    200 that is presently in need of higher quality and more extensive
    spawning areas for recovery to a significant population. Beginning
    populations of fall run Chinook salmon have taken up residence in the
    watershed in those few areas available for spawning. While the chemical
    and wastewater pollution of earlier years has been effectively dealt
    with, excess sediment is still a critical stress on the salmon
    population, as it is to the spawning and rearing areas of the river in
    the estuarine zone upstream of San Pablo Bay, populated by delta smelt,
    splittail, green sturgeon and striped bass.
        The U.S. EPA and Region II Water Quality Control Board have
    prioritized the River as an impaired water body because of the sediment
    production. The excess sediment generated in the watershed suffocates
    spawning areas, reduces the stream's flood-carrying ability, fills deep
    pools, increases turbidity in the stream and estuary, carries with it
    nutrients that bring significant algae blooms during the summer and
    fall, and changes the morphological balance of the streams and river
    toward more unstable conditions.
        In order to address issues such as encroachment of the river and
    loss of wetlands and to develop local tools for improving natural
    resource management, the U.S. Army Corps of Engineers, San Francisco
    District (Corps) and the Napa County Flood Control and Water
    Conservation District (NCFCWCD) is currently developing a Napa Valley
    Watershed Management Plan (WMP) which identifies problems and
    opportunities for implementing environmentally and economically
    beneficial restoration in the Napa Valley watershed providing ecosystem
    benefits, such as flood reduction, erosion control, sedimentation
    management, and pollution abatement. The plan, which the District is
    requesting funds for, would include the identification, review,
    refinement, and prioritization of restoration and flood protection
    opportunities with an emphasis on restoration of the watershed's
    ecosystem (e.g.: important plant communities, healthy fish and wildlife
    populations, rare and endangered habitats and species and wildlife and
    riparian habitats).
        The goal is to complete the WMP by providing technical, planning,
    and design assistance to the non-Federal interests for carrying out
    watershed management, restoration and development on the Napa River and
    its tributaries from Soscol Ridge, located approximately 5 miles south
    of the city of Napa, to Mt. St. Helena, the northern most reach of the
    Napa River watershed, California. A management program incorporating
    flood protection and environmental restoration would be developed as a
    result of the watershed plan.
        To address the above mentioned and other local, regional, and
    national watershed concerns, the Napa County Board of Supervisors
    appointed a Napa County Watershed Task Force (WTF) to identify
    community based and supported solutions. The WTF submitted their
    recommendation for further action to the Napa County Board of
    Supervisors.
        The Corps and the NCFCWCD developed the Napa Valley Watershed
    Project Management Plan with input from the Napa County Planning
    Department (NCPD), Napa County Up-Valley Cities, Napa County Watershed
    Task Force (WTF), Napa County Resource Conservation District (RCD),
    Regional Water Quality Control Board (RWQCB), the San Francisco Estuary
    Institute (SFEI), and other regional and local stakeholders.
        In an effort to identify problems and opportunities for
    implementing beneficial restoration in the Napa Valley Watershed, the
    Napa County Flood Control District is requesting the Napa Valley
    Watershed Management Study be continued by the Corps of Engineers. The
    authority for this study is the Northern California Streams Study
    Authority stemming from the Rivers and Harbors Act of 1962, Public Law
    87-874. Specifically, the Napa County Flood Control District is working
    closely with the Corps in the feasibility report to examine the
    watershed management needs, including flood control, environmental
    restoration, erosion control, storm water retention, storm water runoff
    management, water conservation and supply, wetlands restoration,
    sediment management and pollution abatement in the Napa Valley,
    including the communities of Napa, Yountville, St. Helena, Calistoga
    and the unincorporated areas of Napa County.
                                project synopsis
    Fiscal Year 2003 Budget Funding
        The fiscal year 2003 appropriations bill included $150,000 to
    continue the Napa Valley Watershed Management Study. Funds are being
    used for data evaluation and outreach and to create a data monitoring
    framework for the watershed. This framework, known as the Watershed
    Information Center (WIC), will serve as a coordinating body and data-
    monitoring framework for the watershed. The WIC will serve as a library
    for existing biological and physical data on the watershed. It can
    serve as a forum for the multiple agencies, academic researcher and
    non-profit organizations engaged in monitoring in the watershed.
    Necessary Fiscal Year 2004 Funding
        Funding for the Napa Valley Watershed Management Study during
    fiscal year 2004 in the amount of $350,000 is needed to complete an
    aerial photography/mapping project of the watershed area and complete
    the Watershed Information Center. The mapping project was started in
    fiscal year 2002 and in the current fiscal year has been supplemented
    with LIDAR topography measurements provided by the State Regional Water
    Quality Control Board. This mapping provides a Geographical Information
    System (GIS) base for the management information of the watershed. The
    WIC also was started in fiscal year 2002 and the current request will
    complete creation of this data system. Both of these activities are
    cornerstone components of the Napa Valley Watershed Management Study.
                                     ______

            Prepared Statement of the City of St. Helena, California
        The City of St. Helena is located in the center of the wine growing
    Napa Valley, 65 miles north of San Francisco. The area was settled in
    1834 as part of General Vallejo's land grant. The City of St. Helena
    was incorporated as a City on March 24, 1876 and reincorporated on May
    14, 1889.
        The City from its inception has served as a rural agricultural
    center. Over the years, with the growth and development of the wine
    industry, the City has become an important business and banking center
    for the wine industry. The City also receives many tourists as a result
    of the wine industry. While, the main goal of the City is to maintain a
    small-town atmosphere and to provide quality services to its citizens,
    this is becoming increasingly difficult. Regulatory, administrative and
    resource requirements placed on the City through the listing of
    threatened and endangered species under the Endangered Species Act on
    the Napa River, as well as significant Clean Water Act requirements
    require the City with a small population base to face significant
    financial costs.
        The City of St. Helena is a General Law City and operates under the
    Council-City Manager form of government. The City Council is the
    governing body and has the power to make and enforce all laws and set
    policy related to municipal affairs. The official population of the
    City of St. Helena as of January 1, 2002 is 6,019. St. Helena is a full
    service City and encompasses an area of 4 square miles. Because of its
    size and its rural nature, St. Helena has serious infrastructure, as
    well as, flood protection and environmental needs that far exceed its
    financial capabilities.
        The Napa River flows along the north boundary of the City of St.
    Helena in northern Napa County. The overall Napa River Watershed
    historically supported a dense riparian forest and significant wetland
    habitat. Over the last 200 years, approximately 6,500 acres of valley
    floor wetlands have been filled in and 45,700 acres of overall
    watershed have been converted to urban and agricultural uses. This
    degradation of natural habitats has had a significant effect on water
    quality, vegetation and wildlife, and aquatic resources within the Napa
    River Watershed.
        Surface water quality of the Napa River is dependent upon the time
    of year, runoff from York and Sulphur Creeks, and urban area
    discharges. During the winter months when streamflow is high,
    pollutants are diluted; however, sedimentation and turbidity is high as
    well. During the summer months when streamflow is low, pollutants are
    concentrated and oxygen levels are low, thereby decreasing water
    quality. Agricultural runoff adds pesticides, fertilizer residue, and
    sometimes sediment. Discharges from urban areas can include
    contaminated stormwater runoff and treated city wastewater. The Napa
    River has been placed on the Clean Water Act 303(d) List and TMDL
    Priority Schedule due to unacceptable levels of bacteria,
    sedimentation, and nutrients. It is against this backdrop that the City
    of St. Helena faces its biggest challenges.
                   st. helena napa river restoration project
        The Napa River and its riparian corridor are considered Critical
    Habitat for Steelhead and Salmon Recovery. The Steelhead is one of 6
    Federally listed threatened and endangered species within the Napa
    River and its adjoining corridor which requires attention. Current
    conditions are such that natural habitats and geomorphic processes of
    the Napa River are highly confined with sediment transport and
    geomorphic work occurring in a limited area of the streambed and
    channel banks. Napa River's habitat for the steelhead is limited in its
    ability to provide prime spawning habitat. Limitations include: (1)
    urbanization removing significant amounts of shading and cover
    vegetation within and adjacent to the river; and (2) a detrimental lack
    of pool habitat. Encroachment and channelization of Napa River have
    degraded riparian habitat for rearing, resident, and migratory fish and
    wildlife. The lack of riparian cover, increasing water temperature and
    sedimentation in the river, has resulted in poor water quality. These
    changes have reduced the project area's ability to support the re-
    establishment of listed species.
        In an effort to address these Federal environmental issues, the St.
    Helena Napa River Restoration Project, a Section 206 Aquatic Ecosystem
    Restoration Project, was identified in the Napa Valley Watershed
    Management Feasibility Study in April of 2001 as a specific opportunity
    for restoration. The project would restore approximately 3 miles (20
    acres) of riparian habitat and improve the migratory capacity of
    Federally listed threatened and endangered species, providing greater
    access to rearing, resident and migratory habitats in the 80 square
    mile watershed above the project area.
        The project will interface with and complement the City of St.
    Helena's multiple objective flood project, the St. Helena Flood
    Protection and Flood Corridor Restoration Project, which will provide
    flood damage reduction through restoration and re-establishment of the
    natural floodplain along the project reach, setting back levees and the
    re-creation and restoration of a natural floodway providing high value
    riparian forest.
        This Section 206 project is necessary to ensure and improve the
    viability of Federal and State listed species by providing rearing,
    resident and migratory habitat in the project 3 mile stream corridor.
    The project will also work to improve area habitat to benefit the
    migration of steelhead to high value fisheries habitat in upper
    watershed channel reaches. In an effort to build on recent geomorphic
    and riparian studies on the Napa River, the Corps will use these
    efforts from Swanson Hydrology and Geomorphology and Stillwater Science
    to secure baseline information for this project.
        The City of St. Helena respectfully requests the Committee's
    support for $360,000 for completing the Detailed Project Report and
    initiating plans and specifications for the St. Helena Napa River
    Restoration Project under the Corps' Section 206 Aquatic Ecosystem
    Restoration Program.
                 york creek dam removal and restoration project
        York Creek originates from the Coast Range on the western side of
    the Napa Valley Watershed at an elevation of approximately 1,800 feet
    and flows through a narrow canyon before joining the Napa River
    northeast of St. Helena. York Creek Dam on York Creek has been
    identified as a significant obstacle to passage for Federally listed
    Steelhead in the Central California Coast. In fact, it has been
    determined that York Creek Dam is a complete barrier to upstream fish
    migration. In addition, since the City of St. Helena has owned York
    Creek Dam, there has been a number of silt discharges from the dam into
    York Creek that have caused fish kills.
        Under the Corps of Engineers' Section 206 Authority, a study is
    underway to remove the dam structure and to restore the creek in an
    effort to improve fish passage and ecological stream function for this
    Napa River tributary. Alternatives to be investigated and pursued
    include complete removal of York Creek Dam, appurtenances and
    accumulated sediment, re-grading and restoring the creek through the
    reservoir area. Rather than merely removing the dam and accumulated
    sediments, this alternative would use a portion of the material to re-
    grade the reservoir area to simulate the configuration of the
    undisturbed creek channel upstream. Material could also be used to fill
    in and bury the spillway and to fill in the scour hole immediately
    downstream of the spillway. Use of material on site will greatly reduce
    hauling and disposal costs, as well as recreating a more natural creek
    channel through the project area.
        The revegetation plan for the site following removal of the earthen
    dam will restore a self-sustaining native plant community that is
    sufficiently established to exclude nonnative invasive plants.
    Revegetation will replace vegetation that is removed due to
    construction and stabilize sediments in the stream channel riparian
    corridor and upper bank slopes. The species composition of the
    revegetated site will be designed to match that of (relatively)
    undisturbed sites both above and below the project site. In terms of
    expected outcomes for the project, the removal of York Creek Dam will
    open an additional 2 miles of steelhead habitat upstream of the dam,
    and the channel restoration will reestablish natural channel geomorphic
    processes and restore riparian vegetation.
        The City of St. Helena respectfully requests the Committee's
    support for $800,000 in appropriations under the Corps of Engineers'
    Section 206 Aquatic Ecosystem Restoration Program, so that the efforts
    can proceed on completing the plans and specification and initiating
    construction of the York Creek Dam Removal and Restoration Project.
                                     ______

         Prepared Statement of the Santa Clara Valley Water District,
                              San Jose, California
                            guadalupe river project
        Background.--The Guadalupe River is a major waterway flowing
    through a highly developed area of San Jose, in Santa Clara County,
    California. A major flood would damage homes and businesses in the
    heart of Silicon Valley. Historically, the river has flooded downtown
    San Jose and the community of Alviso. According to the U.S. Army Corps
    of Engineers (Corps) 2000 Final General Reevaluation & Environmental
    Report for Proposed Project Modifications, estimated damages from a 1
    percent flood in the urban center of San Jose are over $576 million.
    The Guadalupe River overflowed in February 1986, January 1995, and
    March 1995, damaging homes and businesses in the St. John and Pleasant
    Street areas of downtown San Jose. In March 1995, heavy rains resulted
    in breakouts along the river that flooded approximately 300 homes and
    business.
        Project Synopsis.--In 1971, the local community requested that the
    Corps reactivate its earlier study. Since 1972, substantial technical
    and financial assistance have been provided by the local community
    through the Santa Clara Valley Water District in an effort to
    accelerate the project's completion. To date, more than $85.8 million
    in local funds have been spent on planning, design, land purchases, and
    construction in the Corps' project reach.
        The Guadalupe River Project received authorization for construction
    under the Water Resources Development Act of 1986; the General Design
    Memorandum was completed in 1992, the local cooperative agreement was
    executed in March 1992, the General Design Memorandum was revised in
    1993, construction of the first phase of the project was completed in
    August 1994, construction of the second phase was completed in August
    1996. Project construction was temporarily halted due to environmental
    concerns.
        To achieve a successful, long-term resolution to the issues of
    flood protection, environmental mitigation, avoidance of environmental
    effects, and project monitoring and maintenance costs, a multi-agency
    ``Guadalupe Flood Control Project Collaborative'' was created in 1997.
    A key outcome of the collaborative process was the signing of the
    Dispute Resolution Memorandum in 1998, which modified the project to
    resolve major mitigation issues and allowed the project to proceed.
    Energy and Water Development Appropriations Act of 2002 was signed into
    law on November 12, 2001. This authorized the Modified Guadalupe River
    Project at a total cost of $226,800,000. Construction of the last phase
    of flood protection is scheduled for completion by December 2004 and is
    dependent on timely Federal funding and continuing successful
    mitigation issue resolution. The overall construction of the project
    including the river park and the recreation elements is scheduled for
    completion in 2006.
        Fiscal Year 2003 Funding.--$8 million was authorized in fiscal year
    2003 to continue Guadalupe River Project construction.
        Fiscal Year 2004 Funding Recommendation.--Based upon the need to
    continue construction to provide critical flood protection for downtown
    San Jose and the community of Alviso, it is requested that the
    Congressional Committee support an appropriation add-on of $12 million,
    in addition to the $13 million in the Administration's fiscal year 2004
    budget, for a total of $25 million to continue construction of the
    final phase of the Guadalupe River Flood Protection Project.
                         upper guadalupe river project
        Background.--The Guadalupe River is one of two major waterways
    flowing through a highly urbanized area of Santa Clara County,
    California, the heart of Silicon Valley. Historically, the river has
    flooded the central district and southern areas of San Jose. According
    to U.S. Army Corps of Engineers (Corps) 1998 feasibility study, severe
    flooding in the upper Guadalupe River's densely populated residential
    floodplain south of Interstate 280 would result from a 100-year
    flooding event and potentially cause $280 million in damages.
        The probability of a large flood occurring before implementation of
    flood prevention measures is high. The upper Guadalupe River overflowed
    in March 1982, January 1983, February 1986, January 1995, March 1995,
    and February 1998, causing damage to several residences and businesses
    in the Alma Avenue and Willow Street areas. The 1995 floods in January
    and March, as well as in February 1998, closed Highway 87 and the
    parallel light-rail line, a major commute artery.
        Project Synopsis.--In 1971, the Santa Clara Valley Water District
    (District) requested the Corps to reactivate its earlier study. From
    1971 to 1980, the Corps established the economic feasibility and
    Federal interest in the Guadalupe River only between Interstate 880 and
    Interstate 280. Following the 1982 and 1983 floods, the District
    requested that the Corps reopen its study of the upper Guadalupe River
    upstream of Interstate 280. The Corps completed a reconnaissance study
    in November 1989, which established an economically justifiable
    solution for flood protection in this reach. The report recommended
    proceeding to the feasibility study phase, which began in 1990. In
    January 1997, the Corps determined that the National Economic
    Development Plan would be a 2 percent or 50-year level of flood
    protection rather than the 1 percent or 100-year level. The District
    strongly emphasized overriding the National Economic Development Plan
    determination, providing compelling reasons for using the higher 1
    percent or 100-year level of protection. In 1998, the Acting Secretary
    of the Army did not concur to change the basis of cost sharing from the
    50-year National Economic Development Plan to the locally preferred
    100-year plan, resulting in a project that will provide less flood
    protection, and therefore, be unable to reduce flood insurance
    requirements and reimbursements, as well as eliminate recreational
    benefits and increase environmental impacts. Based on Congressional
    delegation requests, the Assistant Secretary of the Army directed the
    Corps to revise the Chief's Report to reflect more significant Federal
    responsibility. The Corps feasibility study determined the cost of the
    locally preferred 100-year plan is $153 million and the Corps National
    Economic Development Plan 50-year plan is $98 million. The District has
    requested that the costs of providing 50-year and 100-year flood
    protection be analyzed again during the preconstruction engineering
    design phase for the determination of the National Economic Development
    Plan. In a memorandum for the Assistant Secretary of the Army, dated
    October 12, 2000, Major General Hans A. Van Winkle, Deputy Commander
    for Civil Works, made a similar recommendation. The Federal cost share
    has yet to be determined. The project was approved for construction by
    the Water Resources Development Act of 1999 (Section 101).
        Fiscal Year 2003 Funding.--$200,000 was authorized in fiscal year
    2003 for the Upper Guadalupe River Project to continue preconstruction
    engineering and design.
        Fiscal Year 2004 Funding Recommendation.--Based upon the high risk
    of flood damage from the upper Guadalupe River and the need to complete
    preconstruction engineering and design, it is requested that the
    Congressional Committee support an appropriation add-on of $3.3 million
    in fiscal year 2004 for the Upper Guadalupe River Flood Protection
    Project.
                upper penitencia creek flood protection project
        Background.--The Upper Penitencia Creek Watershed is located in
    northeast Santa Clara County, California, near the southern end of the
    San Francisco Bay. In the last two decades, the creek has flooded in
    1980, 1982, 1983, 1986, 1995, and 1998. The January 1995 flood damaged
    a commercial nursery, a condominium complex, and a business park. The
    February 1998 flood also damaged many homes, businesses, and surface
    streets.
        The proposed project on Upper Penitencia Creek, from the Coyote
    Creek confluence to Dorel Drive, will protect portions of the cities of
    San Jose and Milpitas. The floodplain is completely urbanized;
    undeveloped land is limited to a few scattered agricultural parcels and
    a corridor along Upper Penitencia Creek. Based on the U.S. Army Corps
    of Engineers' (Corps) 1995 reconnaissance report, 4,300 buildings in
    the cities of San Jose and Milpitas are located in the flood prone
    area, 1,900 of which will have water entering the first floor. The
    estimated damages from a 1 percent or 100-year flood exceed $121
    million.
        Study Synopsis.--Under authority of the Watershed Protection and
    Flood Prevention Act (Public Law 83-566), the Natural Resources
    Conservation Service (formerly the Soil Conservation Service) completed
    an economic feasibility study (watershed plan) for constructing flood
    damage reduction facilities on Upper Penitencia Creek. Following the
    1990 U.S. Department of Agriculture Farm Bill, the Natural Resources
    Conservation Service watershed plan stalled due to the very high ratio
    of potential urban development flood damage compared to agricultural
    damage in the project area.
        In January 1993 the Santa Clara Valley Water District (District)
    requested the Corps proceed with a reconnaissance study in the 1994
    fiscal year while the Natural Resources Conservation Service plan was
    on hold. Funds were appropriated by Congress for fiscal year 1995 and
    the Corps started the reconnaissance study in October 1994. The
    reconnaissance report was completed in July 1995, with the
    recommendation to proceed with the feasibility study phase. The
    feasibility study, initiated in February 1998, is currently scheduled
    for completion in 2005.
        Advance Construction.--To accelerate project implementation, the
    District submitted a Section 104 application to the Corps for advance
    approval to construct a portion of the project. Approval of the Section
    104 application was awarded in December 2000. The advance construction
    is for a 2,600-foot long section of bypass channel between Coyote Creek
    and King Road. The District was planning to begin construction on this
    portion of the project in 2002. However, due to funding constraints,
    the current plan is for the District to complete the design and to turn
    it over to the Corps to construct when the upstream reaches are ready
    for construction.
        Fiscal Year 2003 Funding.--$559,000 was appropriated in fiscal year
    2003 for the Upper Penitencia Creek Flood Protection Project for
    project investigation.
        Fiscal Year 2004 Funding Recommendation.--Based upon the high risk
    of flood damage from Upper Penitencia Creek and the need to proceed
    with the feasibility study, it is requested that the Congressional
    Committee support the $460,000 in the Administration's fiscal year 2004
    budget for the Upper Penitencia Creek Flood Protection Project.
                              llagas creek project
        Background.--The Llagas Creek Watershed is located in southern
    Santa Clara County, California, serving the communities of Gilroy,
    Morgan Hill and San Martin. Historically, Llagas Creek has flooded in
    1937, 1955, 1958, 1962, 1963, 1969, 1982, 1986, 1996, 1997, and 1998.
    The 1997, 1998, and 2002 floods damaged many homes, businesses, and a
    recreational vehicle park located in areas of Morgan Hill and San
    Martin. These are areas where flood protection is proposed. Overall,
    the proposed project will protect the floodplain from a 1 percent flood
    affecting more than 1,100 residential buildings, 500 commercial
    buildings, and 1,300 acres of agricultural land.
        Project Synopsis.--Under authority of the Watershed Protection and
    Flood Prevention Act (Public Law 83-566), the Natural Resources
    Conservation Service completed an economic feasibility study in 1982
    for constructing flood damage reduction facilities on Llagas Creek. The
    Natural Resources Conservation Service completed construction of the
    last segment of the channel for Lower Llagas Creek in 1994, providing
    protection to the project area in Gilroy. The U.S. Army Corps of
    Engineers (Corps) is currently updating the 1982 environmental
    assessment work and the engineering design for the project areas in
    Morgan Hill and San Martin. The engineering design is being updated to
    protect and improve creek water quality and to preserve and enhance the
    creek's habitat, fish, and wildlife while satisfying current
    environmental and regulatory requirement. Significant issues include
    the presence of additional endangered species including the red-legged
    frog and steelhead, listing of the area as probable critical habitat
    for steelhead, and more extensive riparian habitat than were considered
    in 1982. Project economics are currently being updated as directed by
    Corps Headquarters to determine continued project economic viability.
        Until 1996, the Llagas Creek Project was funded through the
    traditional Public Law 83-566 Federal project funding agreement with
    the Natural Resources Conservation Service paying for channel
    improvements and the District paying local costs including utility
    relocation, bridge construction, and right of way acquisition. Due to
    the steady decrease in annual appropriations for the Public Law 83-566
    construction program since 1990, the Llagas Creek Project has not
    received adequate funding from U.S. Department of Agriculture to
    complete the Public Law 83-566 project. To remedy this situation, the
    District worked with congressional representatives to transfer the
    construction authority from the Department of Agriculture to the Corps
    under the Water Resources Development Act of 1999 (Section 501). Since
    the transfer of responsibility to the Corps, the District has been
    working the Corps to complete the project.
        Fiscal Year 2003 Funding.--$325,000 was appropriated in fiscal year
    2003 for the Llagas Creek Flood Protection Project for planning and
    design.
        Fiscal Year 2004 Funding Recommendation.--Based upon the high risk
    of flood damage from Llagas Creek, it is requested that the
    Congressional Committee support an appropriation add-on of $900,000 in
    fiscal year 2004 for planning and environmental updates for the Llagas
    Creek Project.
                         coyote/berryessa creek project
                        berryessa creek project element
        Background.--The Berryessa Creek Watershed is located in northeast
    Santa Clara County, California, near the southern end of the San
    Francisco Bay. A major tributary of Coyote Creek, Berryessa Creek
    drains 22 square miles in the City of Milpitas and a portion of San
    Jose.
        On average, Berryessa Creek floods once every 4 years. The most
    recent flood in 1998 resulted in significant damage to homes and
    automobiles. The proposed project on Berryessa Creek, from Calaveras
    Boulevard to upstream of Old Piedmont Road, will protect portions of
    the Cities of San Jose and Milpitas. The flood plain is largely
    urbanized with a mix of residential and commercial development. Based
    on the U.S. Army Corps of Engineers (Corps) 1993 draft General Design
    Memorandum, a 1 percent or 100-year flood could potentially result in
    damages of $52 million with depths of up to 3 feet.
        Study Synopsis.--In January 1981, the Santa Clara Valley Water
    District (District) applied for Federal assistance for flood protection
    projects under Section 205 of the 1948 Flood Control Act. The Water
    Resources Development Act of 1990 authorized construction on the
    Berryessa Creek Flood Protection Project as part of a combined Coyote/
    Berryessa Creek Project to protect portions of the Cities of Milpitas
    and San Jose.
        The Coyote Creek element of the project was completed in 1996. The
    Berryessa Creek Project element proposed in the Corps' 1987 feasibility
    report consisted primarily of a trapezoidal concrete lining. This was
    not acceptable to the local community. The Corps and the District are
    currently preparing a General Reevaluation Report which involves
    reformulating a project which is more acceptable to the local community
    and more environmentally sensitive. Project features will include
    setback levees and floodwalls to preserve sensitive areas (minimizing
    the use of concrete), appropriate aquatic and riparian habitat
    restoration and fish passage, and sediment control structures to limit
    turbidity and protect water quality. The project will also accommodate
    the City of Milpitas' adopted trail master plan. Estimated total costs
    of the General Reevaluation Report work are $3.8 million, and should be
    completed in the summer of 2005.
        Fiscal Year 2003 Funding.--$750,000 was appropriated in fiscal year
    2003 for the Coyote/Berryessa Creek Flood Protection Project to
    continue the General Reevaluation Report and environmental documents
    update.
        Fiscal Year 2004 Funding Recommendation.--Based on the continuing
    threat of significant flood damage from Berryessa Creek and the need to
    continue with the General Reevaluation Report, it is requested that the
    Congressional Committee support an appropriation add-on of $750,000 for
    the Berryessa Creek Flood Protection Project element of the Coyote/
    Berryessa Creek Project.
                          coyote creek watershed study
        Background.--Coyote Creek drains Santa Clara County's largest
    watershed, an area of more than 320 square miles encompassing most of
    the eastern foothills, the City of Milpitas, and portions of the Cities
    of San Jose and Morgan Hill. It flows northward from Anderson Reservoir
    through more than 40 miles of rural and heavily urbanized areas and
    empties into south San Francisco Bay.
        Prior to construction of Coyote and Anderson Reservoirs, flooding
    occurred in 1903, 1906, 1909, 1911, 1917, 1922, 1923, 1926, 1927, 1930
    and 1931. Since 1950, the operation of the reservoirs has reduced the
    magnitude of flooding, although flooding is still a threat and did
    cause damages in 1982, 1983, 1986, 1995, and 1997. Significant areas of
    older homes in downtown San Jose and some major transportation
    corridors remain susceptible to extensive flooding. The federally-
    supported lower Coyote Creek Project (San Francisco Bay to Montague
    Expressway), which was completed in 1996, protected homes and
    businesses from storms which generated record runoff in the northern
    parts of San Jose and Milpitas.
        The proposed Reconnaissance Study would evaluate the reaches
    upstream of the completed Federal flood protection works on lower
    Coyote Creek.
        Objective of Study.--The objectives of the Reconnaissance Study are
    to investigate flood damages within the Coyote Creek Watershed; to
    identify potential alternatives for alleviating those damages which
    also minimize impacts on fishery and wildlife resources, provide
    opportunities for ecosystem restoration, provide for recreational
    opportunities; and to determine whether there is a Federal interest to
    proceed into the Feasibility Study Phase.
        Study Authorization.--In May 2002, the House of Representatives
    Committee on Transportation and Infrastructure passed a resolution
    directing the Corps to ``. . . review the report of the Chief of
    Engineers on Coyote and Berryessa Creeks . . . and other pertinent
    reports, to determine whether modifications of the recommendations
    contained therein are advisable in the interest of flood damage
    reduction, environmental restoration and protection, water conservation
    and supply, recreation, and other allied purposes . . .''
        Fiscal Year 2003 Funding.--No Federal funding was received in
    fiscal year 2003.
        Fiscal Year 2004 Funding Recommendation.--It is requested that the
    Congressional Committee support an appropriation add-on of $100,000 to
    initiate a multipurpose Reconnaissance Study within the Coyote Creek
    Watershed.
                       thompson creek restoration project
        Background.--Thompson Creek, a tributary of Coyote Creek, flows
    through the city limits of San Jose, California, approximately 50 miles
    south of San Francisco. Historically, the creek was a naturally-
    meandering stream and a component of the Coyote Creek watershed. The
    watershed had extensive riparian and oak woodland habitat along
    numerous tributary stream corridors and upland savanna. Currently,
    these habitat types are restricted to thin sparse pockets in the
    Thompson Creek restoration project area.
        Significant urban development over the last 20 years has modified
    the runoff characteristics of the stream resulting in significant
    degradation of the riparian habitat and stream channel. The existing
    habitats along Thompson Creek, riparian forest stands, are threatened
    by a bank destabilization and lowering of the water table. Recent large
    storm events (1995, 1997, and 1998) and the subsequent wet years in
    conjunction with rapid development in the upper watershed have resulted
    in a succession of high runoff events leading to rapid erosion. Today,
    down cutting and head cutting persist and the channel continues to
    incise and material is steadily eroded, leaving a deeply gullied and
    eroded channel. Further downstream sedimentation causes problems with
    flooding.
        The upstream project limits start at the convergence of Yerba Buena
    and Thompson Creeks next to Evergreen Park. The downstream project
    limit is Quimby Road where Thompson creek has been modified as a flood
    control project. The project distance is approximately 3 miles.
        Status.--In February 2000, the Santa Clara Valley Water District
    (District) initiated discussions with U.S. Army Corps of Engineers
    (Corps) for a study under the Corps' Section 206 Aquatic Ecosystem
    Restoration Program. Based on the project merits, the Corps began
    preparation of a Preliminary Restoration Plan (PRP) and subsequent
    Project Management Plan (PMP). Approval of the PRP will lead to the
    development of a Detailed Project Report (DPR). The DPR will provide
    the information necessary to develop plans and specifications for the
    construction of the restoration project.
                                project timeline
      --Request Federal assistance under Sec. 206 Aquatic Ecosystem
            Restoration Program--Feb 2002
      --Initiate Study--Mar 2003
      --Public Scoping Meeting and Local Involvement--Apr 2003
      --Final Detailed Project Report to South Pacific Division of Corps--
            May 2004
      --Initiate Plans and Specifications--July 2004
      --Complete Plans and Specifications--Oct 2004
      --Project Cooperation Agreement signed--Dec 2004
      --Certification of Real Estate--Mar 2005
      --Advertise Construction Contract--May 2005
      --Award Construction Contract--July 2005
      --Construction Start--Sept 2005
      --Complete Physical Construction--Dec 2006
        Fiscal Year 2003 Funding.--$10,000 was received in the fiscal year
    2003 Section 206 appropriation to complete the PRP.
        Fiscal Year 2004 Funding Recommendation.--Based upon the need to
    continue the feasibility study to provide critical ecosystem
    restoration for Thompson Creek, it is requested that the Congressional
    Committee support an earmark of $200,000 within the Section 206 Aquatic
    Ecosystem Restoration Program.
                    san francisquito creek watershed project
        Background.--The San Francisquito Creek watershed comprises 45
    square miles and 70 miles of creek system. The creek mainstem flows
    through five cities and two counties, from Searsville Lake, belonging
    to Stanford University, to the San Francisco Bay at the boundary of
    East Palo Alto and Palo Alto. Here it forms the boundary between Santa
    Clara and San Mateo counties, California and separates the cities of
    Palo Alto from East Palo Alto and Menlo Park. The upper watershed
    tributaries are within the boundaries of Portola Valley and Woodside
    townships. The creek flows through residential and commercial
    properties, a biological preserve, and Stanford University campus. It
    interfaces with regional and State transportation systems in the
    mainstem area, by flowing under two freeways and the regional commuter
    rail system. The local communities have formed a Joint Powers Authority
    in 1999 to cooperatively manage flood and restoration efforts. San
    Francisquito Creek is one of the last natural continuous riparian
    corridors on the San Francisco Peninsula and home to one of the last
    remaining viable steelhead trout runs. It is a highly valued resource
    by all communities. Bank overflow has occurred eleven times since 1907
    with record flooding in February 1998. The riparian habitat and urban
    setting offer unique opportunities for a multi objective project
    addressing flood protection, habitat, water quality, and recreation.
        Flooding History.--The creeks mainstem has a flooding frequency of
    approximately once in 11 years. It is estimated that over $155 million
    in damages could occur in Santa Clara and San Mateo counties from a 1
    percent flood, affecting 4,850 home and businesses. (1998
    Reconnaissance Investigation Report, San Francisquito Creek Coordinated
    Resource Management and Planning Organization, a local stakeholder
    group). Significant areas of Palo Alto flooded in December 1955,
    inundating about 1,200 acres of commercial and residential property and
    about 70 acres of agricultural land. April 1958 storms caused a levee
    failure downstream of Highway 101, flooding Palo Alto Airport, the city
    landfill, and the golf course up to 4 feet deep. Overflow in 1982
    caused extensive damage to private and public property. The flood of
    record occurred on February 3, 1998, when overflow from numerous
    locations caused severe, record consequences with more than $28 million
    in damages, based on a March 1999 U.S. Army Corps of Engineers (Corps)
    Survey Report. More than 1,100 homes were flooded in Palo Alto, 500
    people were evacuated in East Palo Alto, and the major commute and
    transportation artery, Highway 101, was closed. This report recommended
    that the Corps proceed to a Section 905(b), expedited reconnaissance
    phase, with study costs to be federally funded and not to exceed
    $100,000.
        Status.--Active citizenry are anxious to avoid a repeat of February
    1998 flood. Numerous watershed based studies have been conducted by the
    Corps, the Santa Clara Valley Water District, Stanford University, and
    the San Mateo County Flood Control District. Grassroots, consensus-
    based Coordinated Resource Management and Planning Organization, now
    called the San Francisquito Watershed Council, has united stakeholders
    including local and State agencies, citizens, flood victims,
    developers, and environmental activists for over 10 years. The San
    Francisquito Creek Joint Powers Authority was formed in 1999 to
    coordinate creek activities with five member agencies and two associate
    members. The Joint Powers Authority Board has agreed to be the local
    sponsor for a Corps project and received Congressional authorization
    for a Corps reconnaissance study in May 2002. The JPA is also in the
    process of initiating a Section 205 Continuing Authorities Program
    project with the San Francisco District of the Corps for fiscal year
    2003.
        Fiscal Year 2003 Funding.--No Federal funding was received in
    fiscal year 2003.
        Fiscal Year 2004 Funding Recommendation.--It is requested the
    Congressional Committee support the $100,000 in the Administration's
    fiscal year 2004 budget for the San Francisquito Creek Watershed.
                    south san francisco bay shoreline study
        Background.--Congressional passage of Public Law 94-587, the Water
    Resources Development Act of 1976, originally authorized the South San
    Francisco Bay Shoreline Project. The Santa Clara Valley Water District
    (District) is one of the project sponsors. The Corps' 1984
    reconnaissance study included Santa Clara County, and proposed $15
    million to $20 million of improvements to protect portions of the Santa
    Clara County cities of Palo Alto, Sunnyvale, and San Jose. In 1990, the
    U.S. Army Corps of Engineers (Corps) concluded that levee failure
    potential was low and suspended the project until adequate economic
    benefits could be demonstrated.
        The District is concerned because considerable development has
    occurred in the project area since the project's suspension in 1990.
    Many major corporations have since located within Silicon Valley's
    Golden Triangle, lying within and adjacent to the tidal flood zone.
    Now, damages from a 1 percent high tide would far exceed the $34.5
    million estimated in 1981, disrupting business operations,
    infrastructure, and residences. Also, land subsidence of up to 6 feet
    near Alviso, as well as the structural uncertainty of existing salt
    pond levees, increases the potential for tidal flooding in Santa Clara
    County. When high tides coincide with wind generated waves, levee
    overtopping occurs.
        Project Synopsis.--The Corps' 1984 study assumed no change in levee
    maintenance activities and hydrology, and identified overtopping, not
    erosion or levee failure, as the most likely mode of tidal flooding.
    The Corps attributed low potential benefits to levee improvements
    because existing non-Federal, non-engineered levees have historically
    withstood overtopping without failure.
        The District believes that the low incidence of levee failure is
    due to luck and diligent private and public maintenance programs--
    programs that may not continue under the present regulatory
    environment, restricted funding, and new property ownership. The trend
    toward tougher regulatory controls restricts levee maintenance,
    reducing the economic feasibility of continuing historic levels of
    maintenance activities. Lower maintenance levels would leave these
    levees and surrounding communities vulnerable to significant damages.
        Public acquisition of approximately 13,000 acres of south bay salt
    ponds was completed in early March 2003. The proposed restoration of
    these ponds to tidal marsh will significantly alter the hydrologic
    regime, which was assumed to be constant in the Corps' study. Adequate
    tidal flood protection is critical to the success of the restoration
    project, providing an opportunity for multi-objective watershed
    planning in partnership with the California Coastal Conservancy, the
    lead agency on the restoration project.
        Since 1990, Corps staff in Washington, DC, has attempted
    unsuccessfully to resolve the differences in their standards for
    freeboard and levee stability with the Federal Emergency Management
    Agency. The 1997 levee failures and floods in California's Central
    Valley elevated concern about the integrity of Bay Area levees. The
    Corps recognized the potential Federal interest and requested funding
    to reopen the reconnaissance study in fiscal years 1998 and 1999. No
    funds were included in the final congressional authorizations. The U.S.
    House of Representatives Committee on Transportation and Infrastructure
    passed a resolution in July 2002 directing the Corps to review the
    results of this study.
        Fiscal Year 2003 Funding.--No Federal appropriation was authorized
    in fiscal year 2003.
        Fiscal Year 2004 Funding Request.--It is requested that the
    Congressional Committee support an appropriation add-on of $100,000 for
    the South San Francisco Bay Shoreline Study to conduct a Reconnaissance
    Investigation.
                          pajaro river watershed study
        Background.--Pajaro River flows into the Pacific Ocean at Monterey
    Bay, about 75 miles south of San Francisco. The drainage area
    encompasses 1,300 square miles in Santa Clara, San Benito, Monterey,
    and Santa Cruz counties. Potential flood damage reduction solutions
    will require cooperation between four counties and four water/flood
    management districts. There is critical habitat for endangered wildlife
    and fisheries throughout the basin. Six separate flood events have
    occurred on the Pajaro River in the past half century. Severe property
    damage in Monterey and Santa Cruz counties resulted from floods in
    1995, 1997, and 1998. Recent flood events have resulted in litigation
    claims for damages approaching $50 million. $20 Million in U.S. Army
    Corps of Engineers (Corps) flood fight funds have been expended in
    recent years.
        Status.--Two separate Corps activities are taking place in the
    watershed. The first activity is a Corps reconnaissance study
    authorized by a House Resolution in May 1996 to address the need for
    flood protection and water quality improvements, ecosystem restoration,
    and other related issues. The second activity is a General Revaluation
    Report initiated in response to claims by Santa Cruz and Monterey
    Counties that the 13 mile levee project constructed in 1949 through
    agricultural areas and the city of Watsonville is deficient. The
    reconnaissance study on the entire watershed has been initiated by the
    San Francisco District of the Corps and will be complete in fiscal year
    2002. Watershed Stakeholders are working cooperatively to support the
    Corps' reconnaissance study, which will provide information to help
    reach an understanding and agreement about the background and facts of
    the watershed situation.
        Local Flood Prevention Authority.--Legislation passed by the State
    of California (Assembly Bill 807) in 1999 titled ``The Pajaro River
    Watershed Flood Prevention Authority Act'' mandated that a Flood
    Prevention Authority be formed by June 30, 2000. The purpose of the
    Flood Prevention Authority is ``to provide the leadership necessary to
    . . . ensure the human, economic, and environmental resources of the
    watershed are preserved, protected, and enhanced in terms of watershed
    management and flood protection.'' The Flood Prevention Authority was
    formed in July 2000 and consists of representatives from the Counties
    of Monterey, San Benito, Santa Clara, and Santa Cruz, Zone 7 Flood
    Control District, Monterey County Water Resources Agency, San Benito
    County Water District, and the Santa Clara Valley Water District. The
    Flood Prevention Authority Board sent a letter of intent to cost share
    a feasibility study of the Pajaro River Watershed to the Corps in
    September 2001.
        Fiscal Year 2003 Funding.--$100,000 was authorized in fiscal year
    2003 for the Pajaro Watershed Reconnaissance Study.
        Fiscal Year 2004 Funding Recommendation.--It is requested that the
    Congressional Committee support the $100,000 in the Administration's
    fiscal year 2004 budget for the Pajaro River Watershed Study.
               san jose area water reclamation and reuse program
                      (south bay water recycling program)
        Background.--The San Jose Area Water Reclamation and Reuse Program,
    also known as the South Bay Water Recycling Program, will allow the
    City of San Jose and its tributary agencies of the San Jose/Santa Clara
    Water Pollution Control Plant to protect endangered species habitat,
    meet receiving water quality standards, supplement Santa Clara County
    water supplies, and comply with a mandate from the U.S. Environmental
    Protection Agency and the California Water Resources Control Board to
    reduce wastewater discharges into San Francisco Bay.
        The Santa Clara Valley Water District (District) collaborated with
    the City of San Jose to build the first phase of the recycled water
    system by providing financial support and technical assistance, as well
    as coordination with local water retailers. The design, construction,
    construction administration, and inspection of the program's
    transmission pipeline and Milpitas 1A Pipeline was performed by the
    District under contract to the City of San Jose.
        Status.--The City of San Jose is the program sponsor for Phase 1,
    consisting of almost 60 miles of transmission and distribution
    pipelines, pump stations, and reservoirs. Completed at a cost of $140
    million, Phase 1 began partial operation in October 1997. Peak
    operation occurred in the summer of 2002 with average deliveries of 10
    million gallons per day of recycled water. The system now serves over
    400 customers and delivers over 6,000 acre-feet of recycled water per
    year.
        Phase 2 is now underway. In June 2001, San Jose approved an $82.5
    million expansion of the program. The expansion includes additional
    pipeline extensions into the cities of Santa Clara and Milpitas, a
    major pipeline extension into Coyote Valley in south San Jose, and
    reliability improvements of added reservoirs and pump stations. The
    District and the City of San Jose executed an agreement in February
    2002 to cost share on the pipeline into Coyote Valley and discuss a
    long-term partnership agreement on the entire system. Phase 2's near-
    term objective is to increase deliveries by the year 2010 to 15,000
    acre-feet per year.
        Funding.--In 1992, Public Law 102-575 authorized the Bureau of
    Reclamation to work with the City of San Jose and the District to plan,
    design, and build demonstration and permanent facilities for reclaiming
    and reusing water in the San Jose metropolitan service area. The City
    of San Jose reached an agreement with the Bureau of Reclamation to
    cover 25 percent of Phase 1's costs, or approximately $35 million;
    however, Federal appropriations have not reached the authorized amount.
    To date, the program has received $26 million of the $35 million
    authorization.
        Fiscal Year 2003 Funding.--$3 million was appropriated in fiscal
    year 2003 for project construction.
        Fiscal Year 2004 Funding Recommendation.--It is requested that the
    Congressional Committee support an appropriation add-on of $9 million,
    in addition to the $1 million in the Administration's fiscal year 2004
    budget, for a total of $10 million to fund the work.
                            calfed bay-delta program
        Background.--In an average year, half of Santa Clara County's water
    supply is imported from the San Francisco Bay/Sacramento-San Joaquin
    Delta estuary (Bay-Delta) watersheds through three water projects: The
    State Water Project, the Federal Central Valley Project, and San
    Francisco's Hetch Hetchy Project. In conjunction with locally-developed
    water, this water supply supports more than 1.7 million residents in
    Santa Clara County and the most important high-tech center in the
    world. In average to wet years, there is enough water to meet the
    county's long-term needs. In dry years, however, the county could face
    a water supply shortage of as much as 100,000 acre-feet per year, or
    roughly 20 percent of the expected demand. In addition to shortages due
    to hydrologic variations, the county's imported supplies have been
    reduced due to regulatory restrictions placed on the operation of the
    State and Federal water projects.
        There are also water quality problems associated with using Bay-
    Delta water as a drinking water supply. Organic materials and
    pollutants discharged into the Delta, together with salt water mixing
    in from San Francisco Bay, have the potential to create disinfection-
    by-products that are carcinogenic and pose reproductive health
    concerns.
        Santa Clara County's imported supplies are also vulnerable to
    extended outages due to catastrophic failures such as major earthquakes
    and flooding. As demonstrated by the 1997 flooding in Central Valley,
    the levee systems can fail and the water quality at the water project
    intakes in the Delta can be degraded to such an extent that the
    projects cannot pump from the Delta.
        Project Synopsis.--The CALFED Bay-Delta Program is an
    unprecedented, cooperative effort among Federal, State, and local
    agencies to restore the Bay-Delta. With input from urban, agricultural,
    environmental, fishing, and business interests, and the general public,
    CALFED has developed a comprehensive, long-term plan to address
    ecosystem and water management issues in the Bay-Delta.
        Restoring the Bay-Delta ecosystem is important not only because of
    its significance as an environmental resource, but also because failing
    to do so will stall efforts to improve water supply reliability and
    water quality for millions of Californians and the State's trillion
    dollar economy and job base.
        The June 2000 Framework for Action and the August 2000 Record of
    Decision/Certification contain a balanced package of actions to restore
    ecosystem health, improve water supply reliability and water quality.
    It is critical that Federal funding be provided to implement these
    actions in the coming years.
        Fiscal Year 2003 Funding.--$23 million was appropriated for CALFED
    activities under the Bureau of Reclamation's budget in fiscal year
    2003.
        Fiscal Year 2004 Funding Recommendation.--It is requested that the
    Committee support an appropriation add-on of $35 million, in addition
    to the $15 million in the Administration's fiscal year 2004 budget, for
    a total of $50 million for the CALFED Program.
                                     ______

             Prepared Statement of the Red River Valley Association
                                  introduction
        The Red River Valley Association is a voluntary group of citizens
    bonded together to advance the economic development and future well
    being of the citizens of the four State Red River Basin area in
    Arkansas, Louisiana, Oklahoma and Texas.
        For the past 78 years, the Association has done notable work in the
    support and advancement of programs to develop the land and water
    resources of the Valley to the beneficial use of all the people. To
    this end, the Red River Valley Association offers its full support and
    assistance to the various Port Authorities, Chambers of Commerce,
    Economic Development Districts, Municipalities and other local
    governmental entities in developing the area along the Red River.
        The Resolutions contained herein were adopted by the Association
    during its 78th Annual Meeting in Shreveport, Louisiana on February 20,
    2003, and represent the combined concerns of the citizens of the Red
    River Basin area as they pertain to the goals of the Association,
    specifically:
      --Economic and Community Development
      --Environmental Restoration
      --Flood Control
      --Bank Stabilization
      --A Clean Water Supply for Municipal, Industrial and Agricultural
            Uses
      --Hydroelectric Power Generation
      --Recreation
      --Navigation
        The Red River Valley Association is aware of the constraints on the
    Federal budget, and has kept those constraints in mind as these
    Resolutions were adopted. Therefore, and because of the far-reaching
    regional and national benefits addressed by the various projects
    covered in the Resolutions, we urge the members of Congress to review
    the materials contained herein and give serious consideration to
    funding the projects at the levels requested.
                                 rrva testimony
        Mr. Chairman and members of the Committee, I am Wayne Dowd, and
    pleased to represent the Red River Valley Association as its President.
    Our organization was founded in 1925 with the express purpose of
    uniting the Citizens of Arkansas, Louisiana, Oklahoma and Texas to
    develop the land and water resources of the Red River Basin.
        Even though the President's budget included $4.194 billion for
    civil works programs this is $406 million (8.8 percent) less than
    appropriated in fiscal year 2003. Again, the Corps took the biggest
    reduction than any of the other major Federal agencies. This does not
    come close to the real needs of our nation. A more realistic funding
    level to meet the requirements for continuing the existing needs of the
    civil works programs is $5.5 billion. The traditional programs, inland
    waterways and flood protection remain at the low, unacceptable level as
    in past years. These projects are the backbone to our Nation's
    infrastructure for waterways, flood control and water supply. We remind
    you that civil works projects are a true ``jobs program'' in that 100
    percent of project construction is contracted to the private sector, as
    is much of the architect and engineer work. Not only do these funds
    provide jobs, but provide economic development opportunities for our
    communities to grow and prosper.
        It has come to our attention that there are some in the
    Administration who are proposing to dismantle the civil works functions
    and put them into other Federal agencies. Environmental and regulatory
    functions might go to EPA or Department of the Interior and Waterways
    may go to the Department of Transportation. This is not a good idea for
    our Nation. Placing the regulatory and environmental missions in one of
    those agencies puts it into a ``one agenda'', single focused agency.
    The Corps of Engineers is the best agency to administer the regulatory
    program, because they have all disciplines within their organization,
    to include biologists, engineers, economists, etc. When the Corps of
    Engineers reviews environmental issues we are best assured of a
    balanced outcome that would best serve the people and our ecosystems.
        Our concern with placing the inland waterways under Department of
    Transportation is that they will not receive the same attention as the
    more popular highways and airports. The facts are that one barge, 1,500
    tons of commodities, is equivalent to 15 jumbo rail hoppers or 58
    tractor-trailer trucks. According to EPA, towboats emit 35 to 60
    percent fewer pollutants than locomotives or trucks, per ton of cargo
    moved. This is why we should not dilute the importance of our
    waterways. We should increase the importance of waterborne
    transportation due to its efficiency, safety and being environmentally
    friendly. The RRVA does not support any efforts to dissolve the Corps
    of Engineer Civil Works functions into any other Federal agency.
        We do not support any efforts to increase the benefit to cost ratio
    for projects above 1.0 and we do not support increasing the local
    sponsor's cost sharing requirements. This is not ``Corps reform'' it is
    an initiative to eliminate the civil works program. We do support true
    reform that would make civil works projects less expensive and faster
    to complete. Corps reform should make the Corps of Engineers more
    efficient, cheaper and faster in the execution of civil works studies
    and completion of projects not eliminate the program.
        I would now like to comment on our specific requests for the future
    economic well being of the citizens residing in the four State Red
    River Basin regions.
        Navigation.--The J. Bennett Johnston Waterway is living up to the
    expectations of the benefits projected. We are extremely proud of our
    public ports, municipalities and State agencies that have created this
    success. New opportunities were announced in calendar year 2002 at each
    of the ports that will increase the annual tonnage. You are reminded
    that the Waterway is not complete, 12 percent remains to be
    constructed, $242 million. We appreciate Congress's appropriation level
    in fiscal year 2003; however, in order to keep the Waterway safe and
    reliable we must continue at a funding level closer to $25 million.
        The RRVA formed a Navigation Committee for industry, the Corps of
    Engineers and Coast Guard to partner in making our Waterway a success.
    In calendar year 2002 we succeeded in getting electronic charts
    completed and they are now in use. Permanent channel markers are being
    put in place and will be completed in calendar year 2003. Both of these
    initiatives will provide all the aids to navigation necessary to insure
    safe and efficient navigation, especially during high water events,
    when commercial operations have ceased in past years.
        An issue we need to address is the current 9 foot draft authorized
    for the J. Bennett Johnston Waterway. Our Waterway feeds into the
    Mississippi River, Atchafalaya River and Gulf Inter-coastal Canal,
    which all accommodate 12 foot draft barges. The Atchafalaya River and
    GIC are both authorized 12 foot channels. This would allow additional
    cargo capacity, per barge, which will greatly increase the efficiency
    of our Waterway and reduce transportation rates. We request that the
    Corps conduct a reconnaissance study, to evaluate this proposal, at a
    cost of $100,000.
        The feasibility study to continue navigation from Shreveport-
    Bossier City, Louisiana into the State of Arkansas is on going. We
    appreciate that Congress appropriated adequate funding to complete this
    study in fiscal year 2003. There is great optimism that the study will
    recommend a favorable project. This region of SW Arkansas and NE Texas
    continues to suffer major unemployment and the navigation project,
    although not the total solution will help revitalize the economy. We
    request funding to initiate planning, engineering and design, PED.
        Bank Stabilization.--One of the most important, continuing
    programs, on the Red River is bank stabilization in Arkansas and North
    Louisiana. We must stop the loss of valuable farmland that erodes down
    the river and interferes with the navigation channel. In addition to
    the loss of farmland is the threat to public utilities such as roads,
    electric power lines and bridges; as well as increased dredging cost in
    the navigable waterway. These bank stabilization projects are
    compatible with subsequent navigation and we urge that they be
    continued in those locations designated by the Corps of Engineers to be
    the areas of highest priority. We appreciated the Congressional funding
    in fiscal year 2003 and request you fund this project at a level of $10
    million.
        Flood Control.--You will recall that in 1990 major areas of
    northeast Texas, Southwest Arkansas and the entire length of the Red
    River in Louisiana were ravaged by the worst flooding to hit the region
    since 1945 and 1957. More than 700,000 acres were flooded with total
    damages estimated at $20.4 million. However, it could have been much
    worse. The Corps of Engineers estimates that without the flood control
    measure authorized by Congress over the past several decades an
    additional 1.3 million acres would have been flooded with an estimated
    $330 million in additional flood damage to agriculture and urban
    developments.
        We continue to consider flood control a major objective and request
    you continue funding the levee rehabilitation projects ongoing in
    Arkansas. Five of eleven levee sections have been completed and brought
    to Federal standards. Appropriations of $4.750 million will construct
    two more levee sections in Lafayette County, AR.
        The levees in Louisiana have been incorporated into the Federal
    system; however, they do not meet current construction standards due to
    their age. These levees do not have a gravel surface roadway,
    threatening their integrity during times of flooding. It is essential
    for personnel to traverse the levees during a flood to inspect them for
    problems. Without the gravel surface the vehicles used cause rutting
    and this can create conditions for the levees to fail. Gravel surfaces
    will insure inspection personnel can check the levees during the
    saturated conditions of a flood. Funding has been appropriated in
    fiscal year 2002 and fiscal year 2003. Approximately 50 miles of levees
    in the Natchitoches Levee District will be completed this year. We
    request $2 million to continue this important project in other
    parishes.
        Clean Water.--Nearly 3,500 tons of natural salts, primarily sodium
    chloride, enter the upper reaches of the Red River each day, rendering
    downstream waters unusable for most purposes. The Truscott Brine Lake
    project, which is located on the South Fork of the Wichita River in
    King and Knox Counties, Texas became operational in 1987. An
    independent panel of experts found that the project not only continues
    to perform beyond design expectations in providing cleaner water, but
    also has an exceptionally favorable cost benefit ratio. In fiscal year
    1995 $16 million dollars was appropriated by the Administration, to
    accelerate engineering design, real estate acquisition and initiate
    construction of the Crowell Brine Dam, Area VII and Area IX.
        Due to a conflict over environmental issues, raised by the U.S.
    Fish and Wildlife Service, completion of the SFEIS was delayed pending
    further study to determine the extent of possible impacts to fish and
    wildlife, their habitats and biological communities along the Red River
    and Lake Texoma. In an effort to resolve these issues and insure that
    no harmful impact to the environment or ecosystems would result, a
    comprehensive environmental and ecological monitoring program was
    implemented. It evaluates the actual impacts of reducing chloride
    concentrations within the Red River watershed. This base line data is
    crucial to understanding the ecosystem of the Red River basin west of
    Lake Texoma and funding for this must continue.
        The Assistant Secretary of the Army (Civil Works), in October 1998,
    agreed to support a re-evaluation of the Wichita River Basin tributary
    of the project. The re-evaluation report will be completed in fiscal
    year 2003. Completion of this project will reclaim Lake Kemp as a
    usable water source for the City of Wichita Falls and the region. This
    project will provide improved water quality throughout the four States
    of the Red River providing the opportunity to use surface water and
    reduce dependency on ground water. We request appropriations of
    $2,000,000 to continue this important environmental monitoring and to
    initiate construction of the Wichita River control features.
        Water Supply.--Northwest Texas has been overrun with non-native
    species of brush and mesquite. It now dominates millions of acres of
    rangelands and has negatively impacted water runoff. Studies have
    indicated that brush management could increase runoff by as much as 30
    percent to 40 percent. This would be of great value in opportunities
    for more surface water use and less dependency on ground water. Other
    benefits include an ecological diversity of plant and animal species,
    range fire control and cattle production. A $100,000 reconnaissance
    study would determine if there is a Federal interest and what magnitude
    these benefits would be.
        Lake Kemp, just west of Wichita Falls, TX, is a water supply for
    the needs of this region. Invasion of non-native brush and siltation
    have threatened the capacity of the lake to serve its intended
    functions. A $100,000 reconnaissance study would investigate these
    issues and determine if there are any potential solutions.
        Operation & Maintenance.--We appreciate the support of your
    subcommittee to support navigation to Shreveport/Bossier City, which is
    now providing a catalyst to our industrial base, creating jobs and
    providing economic growth. We request that O&M funding levels remain at
    the expressed Corps capability to maintain a safe, reliable and
    efficient transportation system.
        It is very disturbing to see the Administration suggest that 50
    percent of O&M costs be funded from the Inland Waterway Trust Fund
    (IWTF). The law establishing this trust fund does not provide for it to
    be used for O&M activities and the trust fund would be depleted in less
    than 5 years. What is more troubling is that once this is allowed the
    situation exists to increase the existing $.20 per gallon fuel tax on
    waterway industries to $1.00 per gallon to cover 100 percent of the O&M
    costs. This additional $.80 would drastically increase shipping rates
    devastating a young waterway system such as ours. We do not believe
    there can be a ``temporary'' use of this fund. Once the trust fund is
    used for O&M purposes it will be very difficult to change.
        It is our understanding that the criterion used to determine ``low
    use'' waterways was set at 5 billion ``average ton-miles''. This is the
    wrong criteria and methodology to use. Navigation projects are
    justified using ``system ton-miles''. ``Average ton-miles'' is measured
    from point of origin to the mouth of the river, while ``system ton-
    miles'' is measured from point of origin to destination of cargo, which
    makes sense. A more important issue is that ton-miles is only one
    factor in determining success. Our Nation's waterways were built to
    reduce transportation cost and they do that without moving one ton of
    cargo. ``Water Compelled Rates'' is the term used for ``competition''.
    Rail rates have dropped to match waterborne rates throughout the Red
    River Valley. Many industries have experienced great transportation
    savings without having to use the waterway. If our waterway were closed
    the rail rates would immediately increase. This is one example on why
    ton-miles cannot be the sole determining factor of success.
        Full O&M capability levels are not only important for our Waterway
    project but for all our Corps projects and flood control lakes. The
    backlog of critical maintenance only becomes worse and more expensive
    with time. We urge you to appropriate funding to address this serious
    issue at the expressed full Corps capability. The ``Summary of Fiscal
    Year 2004 Requests'', following this testimony, lists our major O&M
    projects and the level needed to address this issue.
        The Continuing Authorities Program (CAP) has never been fully
    funded to its authorized amount. This has been an outstanding program
    providing small, cost shared projects within our communities. We
    believe this program should be funded at its full-authorized amount.
        We are sincerely grateful to you for the past support you have
    provided our various projects. We hope that we can count on you again
    to fund our needs and complete the projects started that will help us
    diversify our economy and create the jobs so badly needed by our
    citizens. We have included a summary of our requests for easy
    reference.
        Thank you for the opportunity to present this testimony and project
    details of the Red River Valley Association on behalf of the
    industries, organizations, municipalities and citizens we represent
    throughout the four State Red River Valley region. We believe that any
    Federal monies spent on civil work projects are truly investments in
    our future and will return several times the original investment in
    benefits that will accrue back to the Federal Government.
                                grant disclosure
        The Red River Valley Association has not received any Federal
    grant, sub grant or contract during the current fiscal year or either
    of the two previous fiscal years.
                      summary of fiscal year 2004 requests
               [note: projects are not in any order of priority.]
    General Investigation Studies (GI)
        Red River Navigation, SW Arkansas.--This is a feasibility study
    initiated on March 24, 1999 to investigate the potential to extend
    navigation from Shreveport/Bossier, LA to Index, AR. To date $2,955,000
    has been appropriated for this study and matched by the State of
    Arkansas. These funds will complete the study in fiscal year 2003. The
    initial study results indicate the probability that a project will be
    recommended. Funds are requested in fiscal year 2004 to initiate pre-
    construction, engineering and design (PED). Total fiscal year 2004
    request--$400,000.
        Southeast Oklahoma Water Resource Study.--Conduct a reconnaissance
    study to evaluate the water resources in the study area. The study area
    includes the Kiamichi River basin and other tributaries of the Red
    River. A comprehensive plan will be developed to determine how best to
    conserve and utilize this water. In fiscal year 2003 $100,000 was
    received for this study. This is a complex 11-year study of ecosystem
    restoration issues and the Oklahoma Water Resource Board has signed on
    as the local sponsor. Total fiscal year 2004 request--$50,000.
        Southwest Arkansas Study.--Conduct a reconnaissance report in the
    four county areas of the Red River/Little River basins. Included would
    be the four Corps lakes; DeQueen, Dierks, Gillham and Millwood. The
    watershed study would evaluate; flooding, irrigation, fish and wildlife
    habitat, water quality, recreation and water releases for navigation.
    The State of Arkansas has expressed an interest in cost sharing the
    feasibility study. Funding of $100,000 was received in fiscal year 2003
    to initiate the study. Total fiscal year 2004 request--$200,000.
        Washita River Basin, OK.--Under Public Law 534 NRCS, Department of
    Agriculture, constructed approximately 1,100 small flood control
    structures in the Washita River basin above Lake Texoma. These
    structures have significantly reduced the sediment flow into Lake
    Texoma; however, they are reaching their 50-year life expectancy. This
    study will assist NRCS in determining how to extend the life of the
    structures, which have had a great positive impact to the water
    quality, flood storage capacity and ecosystem of Lake Texoma. Funding
    of $100,000 was received in fiscal year 2003 to initiate the study.
    Total fiscal year 2004 request--$100,000.
        Mountain Fork River Watershed, OK & AR, Reconnaissance Study.--The
    study area includes 754 square miles above Broken Bow Lake, OK. Broken
    Bow Lake was justified for flood control, hydropower, water supply,
    recreation and fish and wildlife purposes. In recent years the water
    quality of Broken Bow Lake have deteriorated. This study will
    investigate the impact of the up stream watershed nutrient and sediment
    loading to the lake. Funding of $100,000 was received in fiscal year
    2003 to initiate the study. Total fiscal year 2004 request--$100,000.
        J. Bennett Johnston Waterway, LA, 12 Foot Channel Reconnaissance
    Study.--The waterway flows directly into the Atchafalaya River and then
    to the Gulf Inter-coastal Waterway, both have authorized 12 foot
    channels. Except under extreme low water conditions the Mississippi
    River accommodates barges of 12 foot draft. It is inefficient on
    industry to have to ``special load'' barges destined for the Red River
    to 9 feet when all other barges are loaded to 12 feet. More important
    the added cargo per barge (one-third more) will have a dramatic impact
    on reducing the waterborne rates for the Waterway, making it more
    competitive. Total fiscal year 2004 request--$100,000.
        Red River Brush Management Above Denison Dam, OK & TX,
    Reconnaissance Study.--Over the past 200 years invasive and non-native
    brush species have taken over this region. These species, especially
    mesquite and salt cedar, absorbs enormous amount of water. Brush
    control could yield as much as 30 percent to 40 percent increase in
    rangeland runoff. Other benefits include an ecological diversity of
    plant and animal species, range fire control and cattle production.
    This is an eco-system restoration study. Total fiscal year 2004
    request--$100,000.
        Wichita River Basin above Lake Kemp Dam, TX, Reconnaissance
    Report.--The scope of this study is to investigate creating riparian
    eco-system features utilizing sediment depositions in the upper reaches
    of Lake Kemp, while reducing deposits into Lake Kemp. The current
    sediment deposits are impacting environmental functions of the Lake as
    well as reducing storage capacity. Opportunities exist to construct
    wetlands to improve ecological functions. Total fiscal year 2004
    request--$100,000.
        Red River Waterway, Index Arkansas to Denison Dam, TX.--Investigate
    the restoration of natural resources, such as wetlands, bottomland
    hardwoods and riparian habitat along approximately 245 river miles.
    Various types of bank stabilization would be considered to protect
    environmental zones and corridors. $63,000 was allocated in fiscal year
    2002. This study is waiting for a local sponsor to be identified. Total
    fiscal year 2004 request--$0.
        Bois D'Arc Creek, Bonham, TX.--This is a reconnaissance study to
    address the flooding on 16,100 acres on the lower two-thirds of the
    basin. The towns of Whitewright and Bonham are within the basin. A dam
    was determined feasible in the 1960's; however, there was no local
    sponsor. Currently there are local sponsors interested in this project.
    In fiscal year 2002 $126,000 was received to initiate this study. The
    total study cost will be $1,270,000, Federal funds and $1,170,000 local
    sponsor costs. This study is waiting on funding from the local sponsor,
    Fannin County, TX. Total fiscal year 2004 request--$0.
    Construction General (CG)
        Red River Waterway Project--a. J. Bennett Johnston Waterway, LA.--
    Seven projects will be completed or awarded in fiscal year 2003 as well
    as recreation facilities, the regional visitor center and continued
    mitigation. These ongoing projects will be completed using the $13.7
    million budgeted for fiscal year 2004. Additional funds could be used
    for new projects, which include; Westdale Realignment ($2,500,000),
    Pump Bayou Revetment ($500,000), Fausse/Natchitoches/Clarence
    Reinforcement ($1,000,000), Scott Realignment ($2,500,000), Lumbra
    Dikes ($2,000,000), Lindy C. Boggs Barrier Upgrade ($2,000,000),
    continued mitigation ($1,300,000), Shell Point Drainage Structure
    ($1,000,000), Hammel/Carroll Revetments ($2,000,000) and Teague Parkway
    Revetment ($500,000). Total fiscal year 2004 request--$29,000,000.
        b. Index, AR to Denison Dam, TX; Bendway Weir Demonstration
    Project.--This stretch of the Red River experiences tremendous bank
    caving. A demonstration project using this Bendway Weir technique is
    needed to determine if this method will work in the Red River. The U.S.
    Highway 271 Bridge was selected due to the river threatening this
    infrastructure and accessibility for evaluation. The project will
    include underwater weirs 6 miles upstream and 5.5 miles downstream of
    the bridge. There is great environmental enhancement potential with
    this project. $765,000 has been appropriated to date and additional
    funds are required to develop the PCA and reevaluate the design. A
    local sponsor is still being secured. Total fiscal year 2004 request--
    $250,000.
        Red River Chloride Control Project (Wichita River Basin), TX.--A
    reevaluation for the Wichita River Basin features had been ongoing
    using reprogrammed funds. The office of the ASA (CW) has supported this
    project and funds were appropriated in fiscal year 2003. The re-
    evaluation report will be completed in fiscal year 2003. Funds are
    needed for design, plans and specifications and to continue
    environmental monitoring activities. Total fiscal year 2004 request--
    $2,000,000.
        Red River Below Denison Dam Levees & Bank Stabilization--a. Levee
    Rehabilitation, AR--Funds are required to complete construction of
    Levee Item #5 initiated in fiscal year 2001, initiate construction of
    Levee Item #9 and initiate design for follow on Levee Item #6. Total
    fiscal year 2004 request--$4,750,000.
        b. Bowie County Levee, TX.--The local sponsor requested the
    ``locally preferred option'', which was authorized for construction. In
    fiscal year 2003 $4,000,000 was appropriated to initiate this project.
    The local sponsor is willing to execute a PCA and initiate real estate
    activities in fiscal year 2003. Total fiscal year 2004 request--
    $500,000.
        c. Upgrade Levees, LA.--Approximately 220 miles of levees in
    Louisiana do not have gravel surfaces on top of the levee, therefore do
    not meet Federal standards. These levees are in the Federal system and
    must be upgraded. This surface is required for safe inspections of the
    levees during times of floods and to maintain the integrity of the
    levee. The total project can be completed in four phases over 4 years.
    $1,000,000 was appropriated in fiscal year 2003 and approximately 50
    miles of levee have been upgraded in the Natchitoches Levee District,
    LA. Total fiscal year 2004 request--$2,250,000.
        d. Upgrade Levees, LA.--Many structures, through the Levee system
    in Louisiana, have deteriorated to a condition that threatens the
    integrity of the levees themselves. A project must be undertaken to
    systematically upgrade these structures. Total fiscal year 2004
    request--$600,000.
        Red River Emergency Bank Protection, Arkansas.--Funds are required
    to complete construction of Bois D'Arc Revetment ($4,200,000) initiated
    in fiscal year 2002; and Dickson Revetment ($5,800,000) initiated in
    fiscal year 2003. These funds would also complete the design on Finn
    Revetment Phase II. These are important projects for protection of
    valuable farmlands and to maintain the existing alignment of the river
    in advance of navigation. Total fiscal year 2004 request--$10,000,000.
        Little River County (Ogden Levee), AR.--A reconnaissance report in
    1991 determined that flood control levees were justified along Little
    River. The project sponsor, Arkansas Soil and Water Conservation
    Commission requests that the project proceed directly to PED, without a
    cost shared feasibility study. We request language and funding to
    accomplish this. Total fiscal year 2004 request--$200,000.
        McKinney Bayou.--The Reconnaissance Report showed a favorable
    project to clear and reshape this drainage canal. Presently, the local
    sponsor is unable to cost share continuation of this project due to the
    extremely high cost of mitigation. Total fiscal year 2004 request--$0.
        Big Cypress Valley Watershed (Section 1135).--The main focus of
    this study is within the City of Jefferson, Texas. Informal
    coordination with Jefferson has showed their continued support and
    intent to participate. Their total share is estimated to be $601,600
    with annual O&M costs of approximately $21,000. In fiscal year 2001
    $120,000 was appropriated to initiate this project. No funds can be
    expended until completion of the Master Plan and acquisition of land by
    the local sponsor. Total fiscal year 2004 request--$0.
        Millwood Lake, Grassy Lake, AR (Section 1135).--An environmental
    restoration project of 15,000 acres of wetlands located downstream from
    Millwood Dam. The Dam interrupted the flow to these wetlands and this
    project would be a water delivery system to include restoring flow to a
    400-acre pristine wetland area. It is private land; however, there is a
    national interest for migratory birds. A potential sponsor is the
    Arkansas Soil & Water Conservation Commission. Total fiscal year 2004
    request--$200,000.
        East/West Burns Run Public Use Area, Park Modernization, Lake
    Texoma, OK.--Modernization of these facilities will bring them up to
    standards to serve the high volume of users experienced each year. The
    Lake Texoma region economy depends mostly on recreation. This facility
    will ensure continued success, but also increase the economic potential
    for the area. Total fiscal year 2004 request--$6,000,000.
    Operation & Maintenance (O&M)
        Red River Waterway.--The President's budget is usually sufficient
    to only operate the waterway and perform preventive maintenance. There
    are major, unfunded backlog maintenance items that must be
    accomplished. These items include inspection and repair of lock & dam
    stop logs, repairs to tainter gate diagonal bracing at Lock #3 and
    revetment repairs. The President's budget included no funding for
    backlog maintenance. Total fiscal year 2004 request--$19,900,000.
        Flood Control Lakes.--There are nine major flood control lakes in
    the Red River Valley, plus the Truscott Brine Reservoir. These lakes
    have served to prevent hundreds of millions of dollars of damage over
    the past 50 years. However, they are getting to the age where
    maintenance cannot be differed any longer. Backlog maintenance items
    include repair to flood gates, powerhouse maintenance, dam structures
    and recreation facilities. If upgrades are not made at recreation
    facilities they may have to be closed due to safety concerns to the
    public. Following is a list of the lakes and our fiscal year 2004
    requests for each.

    ------------------------------------------------------------------------
                                                                Fiscal Year
                       Flood Control Lake                      2004 Request
    ------------------------------------------------------------------------
    Denison Dam, Lake Texoma, TX............................      $8,643,000
    Hugo Lake, OK...........................................       3,138,000
    Broken Bow Lake, OK.....................................       1,894,000
    Pat Mayse Lake, TX......................................         994,000
    Warrika Lake, OK........................................       1,691,000
    Millwood Lake, AR.......................................       2,345,800
    Direks Lake, AR.........................................       2,864,800
    Gillham Lake, AR........................................       2,743,000
    DeQueen Lake, AR........................................       2,768,800
    Truscott Brine Dam, TX..................................       1,717,000
    ------------------------------------------------------------------------

        Support of MR&T Operations and Maintenance (O&M).--Old River Lock
    is the access tows have from the Mississippi River to the Red River
    Waterway. When this structure is not in service tows must go down the
    Atchafalaya River to the gulf and back to the Mississippi past New
    Orleans, LA, adding days to the trip. It is critical to the success of
    the Red River Waterway that the Old River structure be maintained.
    Currently, there is a backlog of important maintenance items that must
    be funded. Total fiscal year 2004 request--$21,000,000.
                                     ______

        Prepared Statement of the State of Louisiana Red River Waterway
                                   Commission
        On behalf of the citizens of the Red River Waterway District of
    Louisiana, the Red River Waterway Commission urges the Congress of the
    United States to allocate the funds necessary for fiscal year 2004 for
    J. Bennett Johnston Waterway. Adequate funding will allow continued
    construction progress toward actual project completion, stimulate
    continued growth in tonnage movement, encourage the continuation of
    private and public development as well as facilitate total reliability
    in project function for industrial and recreational development. While
    this project is still in its infancy stage; the infrastructure
    investment has been justified by commercial and recreational
    development along the Red River and intermodal transportation cost
    savings because of water induced rates resulting from the project.
        Tonnage volumes continue to steadily increase and cargo
    classifications diversify providing numerous business opportunities for
    this region. Further development will continue to take place with the
    knowledge that users can rely on an efficient, functional and
    environmentally sound river system.
        Construction on Red River is over 90 percent complete, however, it
    is vitally important that we understand the importance of steady
    progress toward project completion with full knowledge of the financial
    constraints on this country.
    Areas of Need for the Red River Waterway Project
        Operations & Maintenance Program.--Channel Maintenance (Dredging)
    is critical to the viability of the waterway system. The President's
    Budget should reflect funding for maintenance dredging or give the
    Corps flexibility to operate and maintain projects as per our
    agreements. By the way, dredging is maintenance and reliability of
    channel should be of the highest priority. The Corps of Engineers needs
    sufficient resources to adequately maintain the navigation channel to
    provide dependable and reliable depths so that barges moving on the
    system can be loaded to the maximum nine foot draft. Maintenance of
    existing navigation structures at strategic locations is vital for
    continued development. The backlog of maintenance items at the lock &
    dam structures could be devastating to the Nation's investment in the
    navigation system.
        Navigation Structures (Revetments and Dikes).--The completion of
    these river training works is necessary to maintain the channel
    alignment so as to provide reliable navigation to the commercial users.
    In addition, the structures help insure that barges can be loaded to
    the maximum depths allowable for profitable operation and continued
    industrial growth.
        Construction/Maintenance Program.--The Corps of Engineers needs
    resources available to react quickly to landowner bank caving
    complaints that are a result of the project and are fully justified.
        Mitigation and Bendway Dredging.--Continue with land acquisition
    and developmental cost analysis associated with the mitigation portion
    of the project to enhance the bottomland hardwood acreage within the
    Red River Valley area of Louisiana. Continue the bendway dredging
    operations to maintain the backwater connection to the channel of Red
    River for ingress and egress of nutrient rich river water and numerous
    species of freshwater fish.
        Aids to Navigation.--As commercial use continues to increase, the
    Coast Guard presence and resources must reflect a similar growth to
    adequately maintain the buoy system on the Red River and stimulate
    confidence in the river system. Necessary funding to upgrade assets
    that lend reliability and credibility to our efforts is paramount.
        Recreation Development.--Design and Construction in all Pools
    should continue as practicable. Important developments such as the
    Shreveport Riverview project, Teague Parkway Trails in Bossier City,
    Colfax Recreation Area and Natchitoches Recreation Area have
    established an excellent recreation foundation in Pools 3, 4, and 5.
                                     ______

            Prepared Statement of the Caddo/Bossier Port Commission
        On behalf of the citizens of Northwest Louisiana, the Caddo-Bossier
    Parishes Port Commission respectfully urges the Congress of the United
    States to allocate in the fiscal year 2004 Budget the necessary funding
    to keep America's water navigation and transportation infrastructure
    functioning in a safe, cost-effective and reliable manner. The Port and
    Maritime Industries are a major contributor to our Nation's economy. As
    an example, one out of every eight jobs in Louisiana is attributable to
    these industries.
        Moreover, our water highways are national assets, linking every
    community in this Nation to the world. Unfortunately, the proposed
    budget does not include funding for Red River maintenance dredging in
    the Corps of Engineers' Civil Works Program. Dredging is absolutely
    essential to maintaining a safe and reliable waterways system. In
    addition, the $13.7 million budget allocated to the Corps of Engineers
    for construction does not come close to meeting expressed Corps
    capability of $29 million. Likewise, the Operating and Maintenance
    budget appropriation for the Corps at $12 million does not meet
    expressed Corps capability of $19.9 million.
        The effect of these proposed cuts could also be exponentially
    deepened by proposed changes that would finance 25 percent to 50
    percent of the cost of operation and maintenance from the Inland
    Waterways Trust Fund and the Harbor Maintenance Trust Fund. Since 1986,
    these funds have been used to pay one-half of the cost of construction
    and major rehabilitation on specified, fuel-taxed inland waterways
    segments. This action violates the agreement reached prior to passage
    of the Water Resources Development Act of 1986 affirming continued
    Federal responsibility for inland waterways operation and maintenance
    outlays in return for inland waterway users assuming the obligation for
    financing 50 percent of future construction and major rehabilitation
    expenditures. Of even greater concern is the potential this would
    create for future increases in the fuel tax, negatively impacting cargo
    rates and discouraging water transportation at a time when the industry
    is experiencing strong gains.
        The Port of Shreveport-Bossier, located at the head of Red River
    navigation and in operation since 1997, stands today as a longtime
    dream with a solid track record of success and over $95 million of
    local public investment. In 2002, the Port reached the Two Millionth
    Ton of Cargo milestone, at an earlier point in its development than
    most ports of comparable size, and it added Southern Composite Yachts
    to a growing tenant list at the 2,000-acre complex. These results
    should provide a sense of pride to all members of Congress who believed
    in the Red River Navigation Project and recognized its potential. We
    urge you to continue to fund the waterways at a responsible level in
    support of the continued growth of Port and Maritime Industries that so
    directly impact our national economy.
                                     ______

       Prepared Statement of the Board of Mississippi Levee Commissioners
        This statement is prepared by James E. Wanamaker, Chief Engineer
    for the Board of Mississippi Levee Commissioners, Greenville,
    Mississippi, and submitted on behalf of the Board and the citizens of
    the Mississippi Levee District. The Board of Mississippi Levee
    Commissioners is comprised of 7 elected commissioners representing the
    counties of Bolivar, Issaquena, Sharkey, Washington, and parts of
    Humphreys and Warren counties in the Lower Yazoo Basin in Mississippi.
    The Board of Mississippi Levee Commissioners is charged with the
    responsibility of providing protection to the Mississippi Delta from
    flooding of the Mississippi River and maintaining major drainage
    outlets for removing the flood waters from the area. These
    responsibilities are carried out by providing the local sponsor
    requirements for the Congressionally authorized projects in the
    Mississippi Levee District.
        It is apparent that the Administration loses sight of the fact that
    the Mississippi River & Tributaries Project provides protection to the
    Lower Mississippi Valley from flood waters generated across 41 percent
    of the Continental United States. These flood waters flow from 31
    States and 2 providences of Canada and must pass through the Lower
    Mississippi Valley on its way to the Gulf of Mexico. We will remind you
    that the Mississippi River & Tributaries Project is one of, if not the
    most cost effective project ever undertaken by the United States. The
    foresight used by the Congress and their authorization of the many
    features of this project is exemplary.
        The many projects that are part of the Mississippi River &
    Tributaries Project not only provides protection from flooding in the
    area, but the award of construction contracts throughout the Valley
    provides assistance to the overall economy to this area that is also
    encompassed by the Delta Regional Authority. The employment of the
    local workforce and purchases from local venders by the contractors
    help stabilize the economy in one of the most impoverished areas of our
    country. The Mississippi Valley Flood Control Association will be
    submitting a general statement in support of an appropriation of $435
    million for fiscal year 2004 for the Mississippi River & Tributaries
    Project. This is the minimum amount that we consider necessary to allow
    for an orderly completion for the remaining work in the Valley and to
    provide for the operation and maintenance as required to prevent
    further deterioration of the completed flood control and navigation
    work.
        The Delta area of Mississippi remains exposed to severe flooding
    from the Project Design Flood on the Mississippi River. The
    administrative budget for Mainline Mississippi River Levees will
    further delay protection from the River beyond the already projected
    completion date of 2031. We are asking that the Congress appropriate
    $55.609 million which will allow for the continuation of ongoing
    contracts along our levee system and for the award of one additional
    construction item in fiscal year 2004. The Board of Mississippi Levee
    Commissioners has committed the necessary financial resources and staff
    to allow for the orderly acquisition of rights-of-way which is required
    by the local sponsor and we ask that the Congress continue to provide
    adequate Federal funding to allow construction of these projects to
    move forward in an orderly manner.
        Although there is opposition to the recommended plan for the Yazoo
    Backwater Project within the environmental community, the local support
    for the recommended plan is strong. All six of the county Boards of
    Supervisors in the project area officially support the recommended plan
    provided in the Draft Reformulation Report released by the Corps of
    Engineers in September 2000. The Corps of Engineers and Environmental
    Protection Agency are currently working to gain consensus on the
    science used in evaluating impacts. The Mississippi Levee Board remains
    concerned about the apparent desire of the U.S. Fish & Wildlife Service
    to avoid the science involved and their continued effort to achieve
    their goal for change in national policy utilizing this single project
    as the vehicle. The Fish & Wildlife Service continues to advocate
    alternatives that constitute no more than land use planning for the
    area. The Vicksburg District Corps of Engineers has scheduled the
    release of the Final Report this summer which would call for initiating
    the acquisition of reforestation easements; the pump supply contract;
    and relocations during fiscal year 2004. At this time, we would ask
    that the Congress provide an appropriation of $12 million which will
    allow for the Corps of Engineers to proceed on schedule in providing
    protection to an area from flood waters that it has had to endure for
    over 60 years after the Eudora Floodway feature was removed from the
    Mississippi River & Tributaries Project.
        The completion of channel work leading into the City of Greenville
    being constructed as part of the Upper Steele Bayou Project portion of
    the Big Sunflower River & Tributaries Project has proved itself on more
    than one occasion. As we have had several rainfall events that
    previously would have caused tremendous localized flooding and flooding
    of many homes in the City of Greenville, rainfall from these storms was
    conveyed by the project without damage to any homes. We are requesting
    $1.29 million for construction to continue on the remaining features of
    this project in the Yazoo National Wildlife Refuge and for the
    acquisition of remaining mitigation lands required as this project
    nears completion.
        As with the work that provides the drainage of flood waters from
    the City of Greenville, the Upper Yazoo Project, having been completed
    to the City of Greenwood, has also proved itself during these heavy
    rainfall events. Areas that were flooded in the City of Greenwood
    during heavy rains in 1973 have remained flood free over the last 2
    years. This work needs to extend upstream toward the towns of Lambert
    and Marks so that they might receive the same level of protection as
    Greenville and Greenwood. We are requesting $15 million for the Upper
    Yazoo Project which will allow the Vicksburg District Corps of
    Engineers to continue with planning, design, and the award of
    construction contracts in an orderly manner. These channels also
    provide the outlet for the four flood control reservoirs which store
    excess waters from heavy rainfall events that occur in the upper
    reaches of the basin.
        Demonstration Erosion Control work in the Bluff Hills above the
    Mississippi Delta has time and again proven the effectiveness of
    stabilized stream banks and reduction of head cutting, both of which
    reduces sediment from entering our channels. An appropriation of $20
    million is being requested for the Demonstration Erosion Control
    Project to ensure that construction continues on schedule reducing
    maintenance requirements along the Yazoo, Tallahatchie, and Coldwater
    River Systems in years to come.
        We read day after day comments regarding the need for maintenance
    of our Nations infrastructure. Completed portions of the Mississippi
    River & Tributaries Project are no different than other infrastructure
    across the country. The Big Sunflower River & Tributaries Project
    provides the drainage outlet for over 4,000 square miles of the
    Mississippi Delta (an area almost 4 times the size of the State of
    Rhode Island). Construction on this project was initiated in 1947 and
    completed in the mid 1960's. For over 50 years, the Mississippi Delta's
    two Levee Boards, which serve as the local sponsors of this project,
    have carried out their commitment to the Corps of Engineers for the
    maintenance of this project. The Vicksburg District Corps of Engineers
    determined in the early 1990's that major maintenance of these channels
    was required to restore the project to the capacity achieved when the
    work was completed in the 1960's. Opposition to the Big Sunflower River
    Maintenance Project has led the Vicksburg District Corps of Engineers
    to prepare a Supplemental Environmental Impact Statement. The State of
    Mississippi is also re-evaluating the Water Quality Certificate. Both
    of these activities are scheduled to be completed in fiscal year 2004,
    at which time a construction contract for the first dredging item can
    be awarded. All of the required right-of-way is in place for this item
    and we are requesting $4.17 million to allow the award for this
    contract.
        Maintenance of our Mainline Mississippi River Levee System is
    provided on a day-to-day basis by the many Levee Boards along the
    Mississippi River. The Flood Control Act of 1928 clearly delineates
    activities to be performed by the local sponsor and by the Federal
    Government. We are requesting $8.69 million for the maintenance of the
    Mississippi River Levees to allow the Corps of Engineers to adequately
    carry out their responsibilities for major maintenance on this project.
        A key feature in providing flood protection to the East part of the
    Mississippi Delta are the four flood control reservoirs that hold back
    flood waters from the Bluff Hills that would otherwise inundate the
    Delta. All of these reservoirs are well over 50 years old and are
    requiring major work to comply with the provisions of the Dam Safety
    Act. We are asking for appropriation for maintenance of Arkabutla Lake
    of $10.205 million, Enid Lake $7.47 million, Grenada Lake $8.358
    million, and Sardis Lake $13.86 million. The increase in funds
    requested will be utilized for much needed maintenance to features of
    these projects. We are also asking for an appropriation of $1.135
    million for the tributaries' features of the Yazoo Basin to allow
    continued bank stabilization and shore line protection work.
        There are other issues in the Administrations' Budget for the Corps
    of Engineers that greatly concern everyone in the Valley. Inland
    navigation along the Mississippi River is a vital feature in keeping
    the economy of the Lower Mississippi Valley stable. This navigation
    system passes through the heart of an area focused on by the Delta
    Regional Authority and provides a nucleus on which other economic
    development in the area can rely. The Administration's proposal to
    utilize funds from the Inland Waterways Trust Fund for daily operation
    of maintenance of the waterway is unacceptable. It is a proven fact
    that construction rehabilitation funds needed to keep the navigation
    system operational are insufficient and the depletion of the Trust Fund
    for operation and maintenance will further hinder the rehabilitation of
    the navigation system so vital to the economy of our Nation. Our inland
    waterways navigation system provides benefits to the Nation of
    approximately $900 million each year.
        We have also been informed that the Secretary of the Army desires
    to ``out source'' up to 90 percent of the civil work functions being
    carried out by the Corps of Engineers. The Board of Mississippi Levee
    Commissioners has long been concerned about the reduction of personnel
    employed by the Corps of Engineers and its impact to the design and
    construction of our projects, along with the lack of experienced
    individuals available to assist during a major flood event along the
    Mississippi River. The Board of Mississippi Levee Commissioners is
    opposed to any further ``out sourcing'' of activities currently being
    performed in-house by the Corps of Engineers. We have found ourselves
    in a position that local sponsor personnel are required to perform
    activities during the design phase of our projects, or suffer from
    delays to the contract award. This is caused by the time required by
    procedures to have the work ``out sourced''. We are also opposed to any
    function currently administered by the Corps of Engineers being
    transferred to any other department of the Federal Government. The
    experience of personnel throughout the Corps of Engineers in carrying
    out their Congressionally authorized civil work functions cannot be
    replaced if moved to other departments of the Federal Government.
        We are grateful to the committee for providing us the opportunity
    each year to present our testimony for the record.
                                     ______

                 Letter From the Little River Drainage District
                              Cape Girardeau, Missouri, March 19, 2003.
    Senator Peter V. Domenici,
    127 Dirksen, Washington, DC 20510.
        Dear Senator Domenici: My name is Dr. Sam Hunter, DVM of Sikeston,
    Missouri. I am a veterinarian, landowner, farmer and resident of
    Southeast Missouri.
        I am the President of the Little River Drainage District, the
    largest such entity in the Nation. Our District serves as an outlet
    drainage and flood control District to parts of 7 counties in Southeast
    Missouri. We provide flood control protection to a sizable area of
    Northeast Arkansas as well. Our District is solely tax supported by
    more than 3,500 private landowners in Southeast Missouri.
        Our District, as well as other Drainage and Levee Districts in
    Missouri and Arkansas, is located within the St. Francis River Basin.
    This is a project item of the Mississippi River and Tributaries
    Project.
        The St. Francis Basin Project was authorized by Congress in 1928
    for improvements by the U.S. Army Corps of Engineers. The initial
    authorization was justified by a projected benefit cost ratio of 2.4:1.
    Today this ratio is 3.6:1 and the project is still not completed. As
    you can see this has been a wise investment of our Federal tax dollars.
    Few projects or ventures with funding levels provided by the Federal
    Government return more than they cost. This one does and we need to
    complete it in a timely fashion.
        Local interests have done their part in providing rights of way,
    roads, utilities and the like. Our government now needs to fulfill
    their obligatory part of the project and bring it to completion as
    quickly as possible.
        The amount allocated for maintenance in the St. Francis Basin
    Project for fiscal year 2003 was approximately $12,000,000. This is a
    funding level that will permit adequate funding to maintain the
    features within that project on which the Corps of Engineers has made
    improvements and which it is the responsibility of the Federal
    Government to maintain. As a matter of information the Memphis District
    U.S. Army Corps of Engineers was able to execute 99 percent of the
    available funds for maintenance within that project for fiscal year
    2003.
        The President's budget for fiscal year 2004 contains $2.91 million
    for construction whereas the Corps of Engineers has the capability of
    $7.6 million. The President's budget has only $7.505 million for
    maintenance within the St. Francis Basin Project whereas the Corps of
    Engineers has a stated capability of $10.305 million for maintenance.
        We believe the Corps could adequately use between $13 and $15
    million each year for maintenance within this basin. We realize the
    budgetary restraints this year and respectively request Congress to
    approve funding for maintenance in the St. Francis Basin Project for
    fiscal year 2004 in the amount of $10.505 million. This is
    approximately $2 million less than what was actually spent in fiscal
    year 2003 but it will provide funds for adequate maintenance of the
    features within this basin which need annual attention.
        Regarding the construction request we respectively request the
    Congress to fund the amounts for construction for this project equal to
    the Corps capability of $7.6 million.
        Many positive changes have occurred to and within our sector of our
    Nation because of this project. We who live there welcome these
    changes. We, local interests, in Southeast Missouri and Northeast
    Arkansas want this project brought to completion and adequately
    maintained. We have waited over 70 years and we believe it is now time
    to complete this wise investment for our Nation.
        Secondly, the Corps of Engineers has a stated capability of more
    than $435,000,000 for fiscal year 2004 in the MR&T Project. We ask you
    to give consideration to provide funding levels at $435,000,000 for
    this project. This will provide some very needed new construction and
    some maintenance. The President's budget contains only $162,440,000 for
    maintenance which is not adequate. The Corps has a stated capability of
    $208,443,000. We respectively request full capability amounts. The
    President's budget is for only $280,000,000 for construction which to
    put it simply is not enough to keep this vital project maintained and
    moving to a modernization and a reasonable completion date. Authorized
    since 1928 and not completed does not bode well for such a wise
    investment.
        The Mississippi River and Tributaries Project was authorized
    following a record flood in 1927 that inundated more than 26,000 square
    miles of the Mississippi River Valley. Over 700,000 people were left
    homeless, many lives were lost, most if not all East-West commerce was
    stopped and it adversely effected the economy and the environment of
    our Nation. After that devastating event Congress in its infinite
    wisdom passed a bill and established the Mississippi River and
    Tributaries Project (MR&T) and authorized the U.S. Army Corps of
    Engineers to develop a plan to prevent such a disaster in the future.
        To date the MR&T Project has prevented over $180 billion in flood
    damages for an investment of less than $10 billion. Additionally our
    Nation receives more than $900 million of navigational benefits each
    year due to this project. It is readily seen that this project had
    merit from the beginning and continues to reward the citizens not only
    of the valley itself but of the citizens of the entire Nation. It is a
    wise investment for this country, it is good for our economy, and it
    will be a vital link to the defense of our Nation in the event of an
    attack by our enemies.
        This project is not completed and needs to be completed
    immediately. Our locks are aged and have exceeded by 20 percent in some
    instances of their expected life expectancy. The entire lock and dam
    system on the Mississippi River and Tributaries Project needs to be
    modernized in order for our shipping interests to compete with foreign
    markets. While we sit idly by and watch our infrastructure deteriorate
    our competitors in South America and Central America are building
    better and more efficient features throughout their countries.
    Ultimately this will lead to competition which our Nation will not be
    able to fairly compete with.
        Further, we are very concerned and strongly opposed to the
    administration's recommendation in its fiscal year 2004 budget
    submission to use funds from the Inland Waterways Trust Fund to pay for
    part of the operation and maintenance cost of the inland waterways as
    well as some construction. The trust fund was established in 1978 and
    was to be made available for construction and rehabilitation for
    navigation on the inland and coastal waterways not for operations and
    maintenance. This is not what our Nation agreed to in 1978 and is not
    what was renewed under WRDA in 1986. We petition this Congress to stand
    up and have our Nation live up to the promises made to the contributors
    of that trust fund and abide by past agreements.
        Should Congress allow this recommendation to come to fruition the
    trust fund would be drained of all its funds in a short period of time
    and the 50 percent cost share to pay for the construction for
    navigation would not be available unless the tax on fuel used by our
    shipping interests was raised considerably. In most cases these taxes
    would have to be doubled. This industry and its operators would suffer
    dreadfully and many would have to cease operations. Even today at least
    one has filed for bankruptcy and at least one or two others is
    contemplating the same. Should this continue to happen the best and
    most desirable mode of transportation to get our farm commodities and
    products to market would require overland transportation which would
    place a giant burden on our highway system. Further, it would add to
    the expense to our farmers for getting their products to market as well
    as increasing the cost of fuel oil, gasoline, coal, chemicals, and the
    other many items shipped by our barge industry.
        It has been proven year after year our waterway transportation
    system is the safest, the most environmentally acceptable, and the most
    fuel efficient in moving mass amounts of commodities and materials
    throughout our Nation. It would be totally unacceptable and extremely
    unwise to diminish the role of that mode of moving products throughout
    our Nation and expect them to be moved either by rail or by highways.
    Our highway systems already are in dire need of repair and to add
    additional demands on them would be extremely costly. They would become
    very unsafe, and would require much more fuel consumption which we
    currently do not have but must import. Hopefully, common sense will
    prevail and Congress will make the choice to invest into one of the
    greatest assets we have in our Nation.
        The many locks and dams on our rivers are needed. They were
    designed to accommodate traffic 50-60 years ago and it is now time to
    upgrade, enlarge, and construct them to accommodate the industry as we
    have it today. We have done the same thing with our vehicular traffic
    on our roads by upgrading, enlarging, and constructing to meet the
    modern day demands. It is now time and past time to do the same for our
    water industry. Former President Eisenhower saw an increase in our car
    and truck traffic on the horizon and thus we implemented an extensive
    interstate system. Let's look to the future with progressive and wise
    vision and do something in a similar way on our rivers. Our Nation is
    the world's leading maritime and trading nation. We rely on an
    efficient and effective marine transport system to maintain our role as
    a global power. We must continue that role by setting the pattern for
    our neighbor, allies, and other foes.
        Our current waterway system has improved the quality of life and
    has provided a foundation for economic growth and development in the
    United States particularly throughout the Mississippi Valley. Our flood
    control systems work, our transport systems are efficient, our multi-
    purpose projects all contribute to our national prosperity. The
    benefits are real, the flood damages are known to have prevented much
    devastation. Transportation costs have been reduced and increased trade
    worldwide has increased. Unfortunately our Nation has not invested in
    water resource projects and has not kept pace with the economic and
    social expansion not only in this country but on global markets as
    well. Most of our locks and dams are outdated and were designed only
    for a 50 year life. We have exceeded that on nearly half of those
    locks. Many of our locks are undersized for modern commercial barge
    demands and need to be modernized. Imagine our Highway system being as
    it was 50 years ago and having to accommodate the massive number of
    cars we have today. That is precisely what we are doing on our
    waterways. We need to have greater vision and mettle and become
    aggressive and progressive in meeting today's needs. There is currently
    $10 billion needed for waterway improvements in addition to a backlog
    of approximately $300,000,000 which we need to address in this country.
    Our country should have the same vision and the same goal of
    modernizing and upgrading our waterway system as we upgraded and
    modernized our interstate system across our country in the 1960's.
        The latest report by the American Society of Civil Engineers
    provides us an independent report card review on America's
    infrastructure. Features that were graded were roads, bridges, transit
    systems, aviation schools, drinking water, waste water, dams, solid
    waste, hazardous waste, navigable waterways, and energy. The highest
    grade this independent organization gave was a C+ to our solid waste
    disposal system. The overall average which they gave to our
    infrastructure was a D+. This is shameful and this needs to be
    corrected. The ASCE estimates approximately $1.3 trillion needs to be
    spent on our infrastructure over the next 5 years. We can and should
    heed their recommendation. This is not an ``in house'' review but an
    independent assessment.
        What a great way for our country to stimulate its economy and at
    the same time be building and making investments into a system for the
    future which will return back more dollars than expended. We petition
    you to give this vital industry of our Nation a strong endorsement and
    do all you can to ensure our waterways systems stay competitive with
    our foreign competitors.
        At a time when we need to stimulate our economy and at a time that
    safety from terrorist activities needs to be enhanced and at a time
    that many in our Nation are concerned about cleaner air, cleaner water,
    etc., we have a great opportunity to meet the needs of all. We can be
    making sound investments into our infrastructure which will turn back
    more monies to the taxpayers of this country than was invested. We will
    be increasing our defense capabilities should our Nation be attacked
    from an outside force.
        We are strongly opposed to any action that would transfer any part
    or all of the U.S. Army Corps of Engineers Civil Works mission to any
    other agency or department of the Federal Government. This agency has
    completed and overseen the Civil Works mission since its inception and
    has done quite well. Very few of our other governmental bodies can
    report and show a return of the taxpayers investment as the Corps of
    Engineers can and has been doing for many years. It has been reported
    this administration desires to transfer the Corps Civil Works program
    to the Department of Transportation, the Flood Control and
    Environmental Restoration to the Department of Interior and the
    Regulatory Program to the Environmental Protection Agency. The U.S.
    Army Corps of Engineers has rendered extremely valuable services to
    this Nation for many years. The Corps has created an inland waterways
    system that is the envy of the rest of the world. Our Nation's
    commercial transportation system is critical to the Nation's economy
    and the environmental well being and part of this system is used to
    transport military equipment in support of the war on terrorism. The
    Corps has also been in the forefront to provide flood control and
    environmental restoration projects and have supported our troops at
    every armed conflict this Nation has been engaged in. In our opinion,
    it will be a serious mistake and have a negative nationwide impact to
    spread the functions of the Corps into several parts and across a
    Federal bureaucracy. This Nation would lose a wonderful asset and one
    we have enjoyed for many years.
        Further, we are opposed to the continued trend to ``out-source'' or
    to contract-out many of the present positions in the Army Corps of
    Engineers, Civil Works Division. The current Secretary of Army has
    proposed 90 percent of all Corps of Engineers positions be contracted
    out which would eliminate approximately 22,000 current employees and
    would make it almost impossible for much of their work to continue. The
    Corps of Engineers needs to have a good core group of employees ``in
    house'' in order to continue to function in an orderly manner and in a
    fashion their mission was set out by Congress. It is our hope that our
    good Congressional friends will recognize this as a problem and do all
    they can to insure that such efforts are not successful.
        I wish to thank you very much for your time and kind attention and
    for taking the time to review the above discourse. We would be very
    appreciative of anything this committee can do to help us improve our
    environment, improve our livelihood, and improve the area in which we
    live and work which ultimately is good for America. We are also very
    appreciative of all this Committee has done for us in the past. We
    trust you will hear our pleas once more and act accordingly.

                                             Dr. Sam M. Hunter,
                                                             President.
                                     ______

     Prepared Statement of the Mississippi Valley Flood Control Association
        My name is M.V. Williams and I am the President of the West
    Tennessee Tributaries Association. It is also my privilege to serve as
    the Chairman of the Executive Committee of the Mississippi Valley Flood
    Control Association.
        I hope that every one here has knowledge of the Mississippi Valley
    Flood Control Association and a general idea of our objectives. For the
    sake of time let me sum it up by saying we are an agency that gives all
    the people of the Mississippi River Valley the opportunity to speak and
    act jointly on all matters pertaining to flood control, navigation,
    bank stabilization and major drainage problems. We have been coming to
    Washington since 1922 and continuously since re-organization in 1935,
    that's 68 years. Our members for the most part are elected officials
    that give of their time and resources because they know full well that
    their well-being and that of their family, friends and neighbors
    depends on the whims of the majestic and mighty Mississippi River and
    its Tributaries.
        Today our great Nation is engaged in a global war on terrorism and
    our first priority is to win this war and to give back to our citizens
    that feeling of safety that was so rudely taken from us on the 11th day
    of September, 2001 by a bunch of self-destructive fanatical murderers.
    We know that each of you shares our concerns on this matter.
        I am here today to talk about the fiscal year 2004 Appropriations
    for the Mississippi River and Tributaries Project. But before I do, I
    wish to thank all the Members of the United States Congress for adding
    funds to the President's fiscal year 2003 Budget for the U.S. Army,
    Corps of Engineers' Civil Works program. These additional funds are
    needed to insure the continuation of the improvement of our water
    resources, the restoration and protection of our natural environment
    and the operations and maintenance of our inland waterways system and
    our vitally needed flood control structures.
        Today we are again faced with the Administration's Budget that is
    totally inadequate to accomplish those things that I have just
    mentioned. In addition to a lack of funding this 2004 Budget contains
    requirements that are totally unacceptable to us. I would at this time
    desire to address these concerns before talking briefly about the
    Appropriations.
        First, the Administration is proposing to reach into the Inland
    Waterways Trust Fund to pay a large share of the cost of operations and
    maintenance of the inland waterways of this country which by the way
    are the envy of the rest of those that inhabit this planet.
        The Inland Waterways Trust Fund was established by the Congress in
    1978 to make available funds for future construction and rehabilitation
    for navigation on the inland and coastal waterways, not for use for the
    operations and maintenance of those waterways. The funds came from a
    tax levied on the diesel fuel used by the commercial tow boats that
    used the waterways. These funds were not used until the passage of the
    Water Resources Development Act of 1986 at which time an agreement was
    reached between the waterways operators and the Federal Government that
    would call for an increase in the amount of fuel taxes coupled with the
    understanding that the trust fund would not be used for operation and
    maintenance costs.
        If the Congress allows the use of trust funds for operations and
    maintenance, the trust fund will be exhausted in a short period of time
    and the 50 percent share to pay for construction for navigation
    facilities will not be available unless the tax on fuel used by the tow
    boats is raised once again. This action would make it extremely
    difficult for barge operators to continue their operations thereby
    making it more expensive for farmers to get their products to market
    and for the public to realize savings in transportation cost for bulk
    commodities such as fuel oil, gasoline and other crucial items shipped
    by barge. We urge you not to accept this proposal made by the
    Administration.
        We again wish to express our strong opposition to any action that
    would transfer any part of the Corps of Engineers' Civil Works mission
    to other agencies or departments of the government and also our strong
    opposition to any ``out-sourcing'' of the present positions in the
    Corps' civil works functions.
        We were very pleased to see that section 109 of the Fiscal Year
    2003 Appropriations Bill reflected that the Congress shares our
    opposition to these matters and did in fact see that no funds
    appropriated would be used to study or implement any plans privatizing,
    divesting or transferring of civil works missions, functions, or
    responsibilities for the United States Army Corps of Engineers. Thank
    you very much for that.
        Now if I may let me speak very briefly on the amount of funds we
    consider to be required for the Fiscal Year 2004 Mississippi River and
    Tributaries Appropriations.
        The management and direction of the Mississippi Valley Flood
    Control Association is vested in a ten member Executive Committee who
    are elected by the members of the Association from their respective
    states, two each from the states of Louisiana, Mississippi and Arkansas
    and one each from the states of Tennessee, Kentucky, Missouri and
    Illinois. The Executive Committee has spent time reviewing and
    examining the Fiscal Year 2004 Proposed Budget for the Mississippi
    River and Tributaries Project and after careful consideration we
    arrived at the amount of $435,000,000 that we consider the amount
    required to complete the MR&T Project in the most economically and
    engineeringly feasible time frame that will also benefit, preserve and
    restore the natural environment. I have attached a sheet to my
    statement that reflects our request in more detail.
        In closing let me state once again that our priorities are to win
    the war on terrorism, to protect the homeland and to revitalize the
    Nation's economy.
        We must not forget the importance of funding the critical water
    resources infrastructure needs in order to protect the lives and
    property of our citizens and to protect the investment that has already
    been made.
        Thank you for giving me the opportunity to speak to you today. The
    speakers to follow me will be more specific in their statements.
        I shall close with the sincere hope that god will continue to bless
    this country and bring about a quick and kind end to all the discord in
    the world.

      MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2004 CIVIL
    WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES APPROPRIATIONS
    ------------------------------------------------------------------------
                        Project and State                      MVCFA Request
    ------------------------------------------------------------------------
    Surveys, Continuation of Planning and Engineering &
     Advance Engineering & Design:
        Memphis Harbor, TN..................................        $700,000
        Germantown, TN......................................         171,000
        Millington, TN......................................         127,000
        Fletcher Creek, TN..................................         150,000
        Southeast Arkansas..................................       1,000,000
        Coldwater Basin Below Arkansas......................         500,000
        Quiver River, MS....................................         100,000
        Alexandria, LA to the Gulf of Mexico................         700,000
        Morganza, LA to the Gulf of Mexico..................       7,992,000
        Donaldsonville, LA to Gulf of Mexico................       1,400,000
        Spring Bayou, LA....................................         832,000
        Tensas River, LA....................................         500,000
        Donaldsonville Port Development, LA.................         100,000
        Collection & Study of Basic Data....................         695,000
                                                             ---------------
          Subtotal--Surveys, Continuation of Planning &           14,967,000
           Engineering & Advance Engineering & Design.......
                                                             ---------------
    Construction:
        St. John's Bayou-New Madrid Floodway, MO............       7,600,000
        Eight Mile Creek, AR................................       2,050,000
        Helena & Vicinity, AR...............................       3,407,000
        Grand Prairie Region, AR............................      24,700,000
        Bayou Meto, AR......................................      16,000,000
        West Tennessee Tributaries, TN......................         620,000
        Nonconnah Creek, TN.................................       3,068,000
        Wolf River, Memphis, TN.............................       2,500,000
        Reelfoot Lake, TN...................................       1,240,000
        St. Francis Basin, MO & AR..........................       6,300,000
        Yazoo Basin, MS.....................................      53,555,000
        Atchafalaya Basin, LA...............................      21,235,000
        Atchafalaya Basin Floodway..........................      14,200,000
        MS Delta Region, LA.................................       3,400,000
        Horn Lake Creek, MS.................................         395,000
        MS & LA Estaurine Area, MS & LA.....................          30,000
        Channel Improvements, IL, KY, MO, AR, TN, MS & LA...      44,017,000
        Mississippi River Levees, IL, KY, MO, AR, TN, MS &        50,645,000
         LA.................................................
                                                             ---------------
          Subtotal--Construction............................     254,962,000
          Subtotal--Maintenance.............................     208,433,000
                                                             ---------------
          Subtotal--Mississippi River & Tributaries.........     478,362,000
    Less Reduction for Savings & Slippage...................     -43,362,000
                                                             ---------------
          Grand Total--Mississippi River & Tributaries......     435,000,000
    ------------------------------------------------------------------------

                                     ______

     Prepared Statement of the Board of Levee Commissioners for the Yazoo-
                               Mississippi Delta
            yazoo basin, mississippi rivers and tributaries project
        This statement today, made on behalf of the citizens represented by
    the Yazoo-Mississippi Delta Levee Board, is not only in support of the
    funding requests contained herein, but also for the general funding
    testimony offered for Fiscal 2004 by the Mississippi Flood Control
    Association. The association is requesting funding in the amount of
    $435 million for the Mississippi Rivers and Tributaries Project (MR&T),
    an amount based on the association's professional assessment of the
    capabilities of the U.S. Army Corps of Engineers, Mississippi Valley
    Division.
        I would ask that these remarks be made a part of the record.
        In the aftermath of the devastating and historic Great Flood of
    1927, the Flood Control Act of 1928 established as national priority,
    the development of a comprehensive flood control plan to reduce the
    likelihood of such a horrific event's ever happening again in the Lower
    Mississippi Valley. As we look back, the MR&T has returned $180 billion
    in benefits for the $10 billion invested--truly an American public
    works success story.
        Significantly, however, a substantial amount of uncompleted work on
    the project remains, necessarily exposing many areas to the risks of
    flooding. Consequently, the Yazoo-Mississippi Delta Levee Board asks
    Congress to provide funding at a level which will allow the MR&T to
    continue at a pace commensurate with the national priority to protect
    people and property from the ravages of flooding. In order to avoid the
    sorts of delays which can result in the loss of life and livelihood, we
    must again depend upon the good men and women of Congress to add the
    necessary funding to the administration's budget which will allow the
    Corps of Engineers to proceed with its work at full capacity.
        A line-item chart reflecting existing and needed funding levels for
    MR&T projects in the Lower Mississippi Valley follows, with special
    emphasis given to those projects most critical to our levee district:
                            mississippi river levees
        Overall, the construction needs for levees and channels in the
    Lower Mississippi Valley is $55.609 million, with an additional $8.59
    million required for maintenance. Work to continue the ongoing process
    of strengthening deficient levees to the south of our district is
    underway and needs to continue on schedule. Of particular interest to
    our levee board is a series of projects designed to address the problem
    of levee under seepage. We are asking that $2.93 million be allocated
    to the Memphis District for three projects designed to address this
    problem.
                           upper yazoo projects (uyp)
        The number one priority for the Yazoo-Mississippi Delta Levee
    Board, the Upper Yazoo Project was conceived in 1936. The project
    includes a system of flood control reservoirs which discharge into a
    system of channels and levees intended to safely convey headwater from
    the hills to the Mississippi River. While this project has been
    advancing smoothly, it is critical to the people of the North Delta
    that it continue to do so. While the President's budget contains only
    $6.62 million for this project, we are asking that Congress increase
    its appropriation to $15 million to insure that this important project
    continues without interruption. These additional funds will be used to
    complete Items 5A and 5B; to initiate construction on Item 6A; and to
    acquire right of ways and mitigation lands for Item 6 and Item 7.
                    yazoo headwater flood control reservoirs
        Four major flood control reservoirs exist in Mississippi to control
    the release of headwater into the Yazoo River system--Sardis,
    Arkabutla, Enid and Grenada. These have prevented significant flood
    damages through allowing drainage from the State's hill section to be
    released into the much lower Delta at controlled rates. All four are
    aging and require both routine maintenance and upgrading. We are
    requesting that Congress allocate the needed $39.89 million so that
    they can continue to function effectively.
                    big sunflower river maintenance project
        The primary drainage outlet for 10 counties in Mississippi, the
    Sunflower River System has been subject to the same siltation factors
    common to all Delta streams. The Corps of Engineers has determined that
    the river has had a 40 percent reduction in its flow capacity.
        The Levee Boards have been working closely with the Vicksburg
    District as they complete the SEIS for the remaining work and with MDEQ
    on obtaining the Water Quality Certificate for the work. Both of these
    efforts are scheduled to be completed in 2004. Right-of-way is in place
    for the next construction item. We are requesting $4.17 million so that
    the SEIS can be completed and construction can be reinitiated as soon
    as the Water Quality Certificate is issued.
                     demonstration erosion control project
        We feel strongly that continued funding of DEC is important due to
    the fact that substantial amounts of the sediments which would be
    controlled by them would eventually end up within the
    ColdwaterTallahatchie/Yazoo river system. We urge Congress to allocate
    $20 million to this effort.
                              big sunflower river
        We are requesting that Congress allocate $1.29 million so that the
    Corps might purchase mitigation lands.
                         continuing authority programs
        The YMD Levee Board has committed to assist local governments in
    co-sponsoring projects that fall under the Corps' Continuing Authority
    Program. There is tremendous need for Section 14, Section 205 and
    Section 208 programs throughout our district. We urge Congress to both
    increase the limits for these projects and to make the eligibility
    process more competitive.
                            yazoo backwater project
        We continue to support the Mississippi Levee Board's and Corps'
    recommended project to address the problems of backwater flooding in
    the South Delta. We support their funding request of $12 million to
    advance design, initiate real estate activity and initiate a pump
    supply contract.
        Those of us at the Yazoo-Mississippi Delta Levee Board are deeply
    appreciative of the enormous amount of support lent our efforts by
    Congress in the past, and it is with full awareness of the challenges
    facing our great Nation that we earnestly request you support us again
    in meeting our challenge of keeping the floodwaters at bay.
        Humbly submitted on behalf of the Yazoo-Mississippi Delta Levee
    Board and all the citizens it seeks to keep dry.
                                     ______

          Prepared Statement of St. Francis Levee District of Arkansas
                               executive summary
        The Mississippi Valley Flood Control Association fiscal year 2004
    Civil Works Budget, Mississippi River and Tributaries Appropriations-
    Requesting Appropriations of $6,300,000 for Construction and
    $14,733,000 for Maintenance and Operation in the St. Francis Basin
    Project and a Total of $435,000,000 for the Mississippi River
    Tributaries Project.
                             background information
        My name is Rob Rash, and my home is in Marion, Arkansas, located on
    the West side of the Mississippi River and in the St. Francis Basin. I
    am the Chief Engineer of the St. Francis Levee District of Arkansas.
    Our District is the local cooperation organization for the Mississippi
    River and Tributaries Project and the St. Francis Basin Project in
    Northeast Arkansas. Our District is responsible for the operation and
    maintenance of 160 miles of Mississippi River Levee and 75 miles of St.
    Francis River Tributary Levee in Northeast Arkansas.
        The St. Francis Basin is comprised of an area of approximately
    7,550 square miles in Southeast Missouri and Northeast Arkansas. The
    basin extends from the foot of Commerce Hills near Cape Girardeau,
    Missouri to the mouth of the St. Francis River, 7 miles above Helena,
    Arkansas, a total distance of 235 miles. It is bordered on the east by
    the Mississippi River and on the West by the uplands of Bloomfield and
    Crowley's Ridge, having a maximum width of 53 miles.
        The Mississippi River and Tributaries Project and the St. Francis
    Basin Project provide critical flood protection to over 2,500 square
    miles in Northeast Arkansas alone. This basin's flood control system is
    the very lifeblood of our livelihood and prosperity. Our resources and
    infrastructure are allowing the St. Francis Basin and the Lower
    Mississippi Valley to develop into a major commercial and industrial
    area for this great Nation. The basin is quickly becoming a major steel
    and energy production area. The agriculture industry in Northeast
    Arkansas and the Lower Mississippi Valley continues to play an integral
    role in providing food and clothing for this Nation. This has all been
    made possible because Congress has long recognized that flood control
    in the Lower Mississippi Valley is a matter of national interest and
    security and has authorized the U.S. Army Corps of Engineers to
    implement a flood control system in the Lower Mississippi Valley that
    is the envy of the civilized world. With the support of Congress over
    the years, we have continued to develop our flood control system in the
    Lower Mississippi Valley through the Mississippi River and Tributaries
    Project and for that we are extremely grateful.
        Although, at the current level of project completion, there are
    areas in the Lower Mississippi Valley that are subject to major
    flooding on the Mississippi River. The level of funding that has been
    included in the President's Budget for the overall Mississippi River
    and Tributaries Project is not sufficient to adequately fund and
    maintain this project. The level of funding will require the citizens
    of the Lower Mississippi Valley to live needlessly in the threat of
    major flood devastation for the next 30 years. Timely project
    completion is of paramount importance to the citizens of the Lower
    Mississippi. Ten and Fifteen Mile Bayou improvements are just one of
    many construction projects necessary for flood relief in the St.
    Francis Basin. Ten and Fifteen Mile Bayou improvements were
    reauthorized by Congress through the Flood Control Act of 1928, as
    amended. Section 104 of the Consolidated Appropriation Act of 2001
    modified the St. Francis Basin to expand the project boundaries to
    include Ten and Fifteen Mile Bayous and shall not be considered
    separable elements. Total project length of 38 miles includes Ten and
    Fifteen Mile Bayou, Ditch No. 15 and the 10 Mile Diversion Ditch that
    provide drainage for the West Memphis and Vicinity. Without additional
    funds, construction would be delayed and West Memphis and Vicinity will
    continue to experience record flooding as seen December 17, 2001. West
    Memphis and Vicinity would experience immediate flood relief when the
    first item of construction is completed.
                          u.s. army corps of engineers
        We are strongly opposed to any action that would transfer any part
    or the entire U.S. Army Corps of Engineers Civil Works mission to any
    other agency or department of the Federal Government. This agency has
    completed and overseen the Civil Works mission since its inception and
    has done quite well. Very few of our other governmental bodies can
    report and show a return of the taxpayer's investment as the Corps of
    Engineers can and has been doing for many years. It has been reported
    this administration desires to transfer the Corps Civil Works program
    to the Department of Transportation, the Flood Control and
    Environmental Restoration to the Department of Interior and the
    Regulatory Program to the Environmental Protection Agency. The U.S.
    Army Corps of Engineers has rendered extremely valuable services for
    this Nation for many years. The Corps has created an inland waterways
    system that is the envy of the rest of the world. Our Nation's
    commercial transportation system is critical to the Nation's economy
    and the environmental well being and part of this system is used to
    transport military equipment in support of the war on terrorism. The
    Corps has also been in the forefront to provide flood control and
    environmental restoration projects and have supported our troops at
    every armed conflict this Nation has engaged in. In our opinion, it
    will be a serious mistake and have a negative nationwide impact to
    spread the functions of the Corps into several parts across a Federal
    bureaucracy. This Nation would lose a wonderful asset and one we have
    enjoyed for over 200 years.
                                proposed funding
        We support the amount of $435,000,000 requested by the Mississippi
    Valley Flood Control Association for use in the overall Mississippi
    River and Tributaries Project. This is the minimum amount that the
    Executive Committee of the Association feels is necessary to maintain a
    reasonable time line for completion of the overall Mississippi River
    and Tributaries Project. Also, the amounts that have been included in
    the President's Budget for the St. Francis Basin Project; construction,
    operation and maintenance have not been sufficient to fund critical
    projects. These declined amounts have resulted in a significant backlog
    of work within the St. Francis Basin. Therefore, our District is
    requesting additional capabilities of 6,300,000 for the St. Francis
    Basin Project construction funds and $14,733,000 for the St. Francis
    Basin operation and maintenance funds. The amounts requested for the
    St. Francis Basin Project are a part of the total amounts requested for
    the Mississippi River and Tributary Appropriations of the Civil Works
    Budget.
                                   summation
        As your subcommittee reviews the Civil Works Budget of fiscal year
    2004 Appropriations for the Mississippi River and Tributaries Project,
    please consider the significance of this project to the Mississippi
    Valley and the Nation's, economy and infrastructure. As always, I feel
    the Subcommittee will give due regard to the needs of the Mississippi
    River Valley as it considers appropriations for the Mississippi River
    and Tributaries Project. I would like to sincerely thank the
    Subcommittee for its past and continued support of the Mississippi
    River and Tributaries Project.

      MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2004 CIVIL
    WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES APPROPRIATIONS
    ------------------------------------------------------------------------
                                                President's     Recommended
                Project and State                 Budget          Program
    ------------------------------------------------------------------------
    Surveys, Continuation of Planning and
     Engineering & Advance Engineering &
     Design:
        Memphis Harbor, TN..................  ..............        $700,000
        Germantown, TN......................         $51,000         171,000
        Millington, TN......................          84,000         127,000
        Fletcher Creek, TN..................         120,000         150,000
        Southeast Arkansas..................  ..............       1,000,000
        Coldwater Basin Below Arkansas......         185,000         500,000
        Quiver River, MS....................  ..............         100,000
        Alexandria, LA to the Gulf of Mexico         435,000         700,000
        Morganza, LA to the Gulf of Mexico..       3,487,000       7,992,000
        Donaldsonville, LA to Gulf of Mexico         800,000       1,400,000
        Spring Bayou, LA....................         500,000         832,000
        Tensas River, LA....................  ..............         500,000
        Donaldsonville Port Development, LA.  ..............         100,000
        Collection & Study of Basic Data....         695,000         695,000
                                             -------------------------------
          Subtotal--Surveys, Continuation of       6,357,000      14,967,000
           Planning & Engineering & Advance
           Engineering & Design.............
                                             -------------------------------
    Construction:
        St. John's Bayou-New Madrid           ..............      7, 600,000
         Floodway, MO.......................
        Eight Mile Creek, AR................       2,050,000       2,050,000
        Helena & Vicinity, AR...............       2,180,000       3,407,000
        Grand Prairie Region, AR............  ..............      24,700,000
        Bayou Meto, AR......................  ..............      16,000,000
        West Tennessee Tributaries, TN......  ..............         620,000
        Nonconnah Creek, TN.................       2,618,000       3,068,000
        Wolf River, Memphis, TN.............  ..............       2,500,000
        Reelfoot Lake, TN...................  ..............       1,240,000
        St. Francis Basin, MO & AR..........       2,365,000       6,300,000
        Yazoo Basin, MS.....................       7,740,000      53,555,000
        Atchafalaya Basin, LA...............      14,075,000      21,235,000
        Atchafalaya Basin Floodway..........       7,768,000      14,200,000
        MS Delta Region, LA.................       3,200,000       3,400,000
        Horn Lake Creek, MS.................  ..............         395,000
        MS & LA Estaurine Area, MS & LA.....  ..............          30,000
        Channel Improvements, IL, KY, MO,         39,562,000      44,017,000
         AR, TN, MS & LA....................
        Mississippi River Levees, IL, KY,         42,919,000      50,645,000
         MO, AR, TN, MS & LA................
                                             -------------------------------
          Subtotal--Construction............     124,477,000     254,962,000
          Subtotal--Maintenance.............     162,440,000     208,433,000
                                             -------------------------------
          Subtotal--Mississippi River &          293,274,000     478,362,000
           Tributaries......................
    Less Reduction for Savings & Slippage...     -13,274,000     -43,362,000
                                             -------------------------------
          Grand Total--Mississippi River &       280,000,000     435,000,000
           Tributaries......................
    ------------------------------------------------------------------------

                                     ______

     Prepared Statement of the Louisiana Department of Transportation and
                                  Development
        The Louisiana Department of Transportation and Development, Office
    of Public Works and Intermodal Transportation, is the agency designated
    to represent the State of Louisiana for the coordinated planning and
    development of water resources, including flood control, navigation,
    drainage, water conservation and irrigation projects. This statement,
    submitted on behalf of the State of Louisiana and its twenty levee
    boards, presents the recommendations for fiscal year 2004
    appropriations for all U.S. Army Corps of Engineers Civil Works
    Projects in Louisiana.
        Louisiana contains the terminus of the Mississippi River, third
    largest drainage basin in the world, draining 41 percent, or 1\1/4\
    million square miles, of the contiguous United States and parts of two
    Canadian provinces. In addition, Louisiana contends with flows from the
    Sabine River, the Red River, the Ouachita River, the Amite River and
    the Pearl River. All of these river systems combined drain almost 50
    percent of the contiguous land mass of this Nation through Louisiana.
        Louisiana also plays a strategic part in providing the middle of
    this Nation with access to the global marketplace through the Federally
    constructed Inland Waterway System. Approximately 75 percent of all
    soybeans, animal feed and corn, and almost 50 percent of all rice and
    cereals grown in mid-America are shipped to world markets through
    Louisiana. The 230 mile deepwater channel portion of the Mississippi
    River from Baton Rouge to the Gulf is the largest port complex in the
    world allowing Louisiana to rank first in the Nation in volume of
    waterborne traffic. Louisiana's maritime industry accounts for 22.5
    percent of the total Louisiana gross state product and supports
    directly and indirectly almost 244,000 jobs. The ready availability of
    this low cost waterborne transportation system allowed Louisiana to
    develop the second largest refining capacity in the Nation, producing
    15 billion gallons of gasoline annually at 19 refineries. Louisiana
    ranks second in produced natural gas and third for oil production. The
    pipeline system which supplies much of this Nation with natural gas and
    refined petroleum products originates in Louisiana. But none of this
    would have been possible without a comprehensive and extensive flood
    control system to protect the landside facilities. Louisiana is
    protected from riverine and tidal flooding by almost 3,000 miles of
    levees (1,500 in the MR&T system) constructed jointly by Federal, State
    and local entities. Louisiana's 20 levee boards are responsible for the
    maintenance and upkeep of these levees which allow one-third of
    Louisiana to be habitable year-round. Concentrated behind these levees
    are the vast majority of Louisiana's urban centers and petro-chemical
    complexes. Nearly 75 percent of the population lives and works in these
    protected areas and produces more than 90 percent of the State's
    disposable personal income. Approximately 60 percent of the State's
    agricultural products are produced in these protected areas. The lives
    and livelihoods of most of Louisiana's citizens depends on the
    effectiveness of this comprehensive flood control system. But Louisiana
    is not the only beneficiary of this investment. The petrochemical, oil
    and gas industries in Louisiana that contribute to the economic well
    being of the Nation are almost totally dependent on the Federally
    constructed flood control system to protect their facilities. These
    industries, and most of the agricultural industries in mid-America, are
    heavily dependent on the Federally maintained navigable waterway system
    to move their products. It is appropriate that the Federal Government
    has committed to providing combined flood control and navigation
    measures that benefit both Louisiana and the rest of the Nation.
        But the levees and channel improvements that benefit the entire
    Nation have been blamed for the rapidly deterioration of our coastal
    wetlands that annually produce a commercial fish and shellfish harvest
    worth $600 million and 40 percent of the Nation's wild fur and hides
    harvest worth $15 million. Additionally these coastal marshes produce a
    tidal surge dampening effect that was incorporated into the design of
    our hurricane protection levees. The loss of these wetlands is
    adversely impacting both the area's natural resources and the
    effectiveness of the protection system. These wetlands are not
    Louisiana's alone; they constitute 40 percent of the Nation's wetlands
    and their restoration needs to be a national priority.
        The Mississippi River and Tributaries Project (MR&T) has been
    underway since 1928 and isn't scheduled for completion until the year
    2031--a date that will continually move further into the future unless
    an adequate level of funding is provided each year. The
    Administration's budget proposals for the MR&T Project for the past
    several years appear to indicate a declining interest on the part of
    the Federal Government in seeing this project through to a successful
    completion. The Administration's proposed budget of $298 Million for
    fiscal year 2004 is totally unacceptable. We strongly support the
    Mississippi Valley Flood Control Association's request for $435 Million
    for the MR&T Project. This is the minimum amount necessary to continue
    the on-going construction work and perform the bare minimum of
    maintenance required to prevent further deterioration of the Federal
    investment. We urge you to support this requested level of funding.
        We strongly oppose the Administration's proposal to use funds from
    the Inland Waterways Trust Fund to pay for part of the waterway
    system's routine operations and maintenance costs. The Inland Waterways
    Trust Fund, established in 1978 and funded by user fee revenues
    generated by a tax on towboat fuel, was intended to be used to pay one-
    half the cost of construction and major rehabilitation of navigation
    infrastructure. The Administration proposal will rapidly deplete the
    fund and set the stage for significantly increasing--some say more than
    doubling--the user fee. This will adversely impact the Nation's economy
    in the agricultural, energy and transportation sectors and will
    undermine America's international competitiveness. We urge you to
    reject this ill-advised raid on the Inland Waterways Trust Fund, as
    well as the tax increase it promises, and to insure that the balance
    and all future Trust Fund revenues are spent for their original purpose
    of modernizing the system to keep it functioning efficiently well into
    the future.
        We are also opposed to the Administration's budget proposal to
    classify segments of the Inland Waterway System for funding purposes as
    either high or low use dependent on the tonnage moved over a particular
    segment. The Inland Waterway System--the whole system--allowed
    industrial facilities scattered throughout the central portion of the
    United States to obtain raw materials and fuel from distant locations
    and to reach worldwide markets. The economies of thousands of inland
    cities and towns are dependent on low cost waterborne transportation to
    link America's far-flung mining, manufacturing, forestry and
    agricultural industries with deepwater ports. To give preferential
    status to the maintenance of only the main-stem portion of the waterway
    system will wreak havoc on the economies of all the communities located
    on the so-called low-use waterways, especially now when the Nation's
    economy is still struggling to recover.
        In making the following funding recommendations regarding specific
    construction, studies, and operation and maintenance items, the State
    of Louisiana would hope that Congress and the Administration will honor
    their prior commitments to infrastructure development and fund our
    requests. We feel that water resources projects are probably the most
    worthwhile and cost-effective projects in the Federal budget, having to
    meet stringent economic justification criteria not required of other
    programs. We ask that this be taken into consideration in the final
    decision to appropriate the available funds.
        We wish to express our thanks to the Appropriations Subcommittees
    on Energy and Water Development of the House and Senate for allowing us
    to present this brief on the needs of Louisiana. Without reservation,
    practically every single project in Louisiana which has been made
    possible through actions of these committees has shown a return in
    benefits many times in excess of that contemplated by the authorizing
    legislation. The projects which you fund affect the economy of not only
    Louisiana, but the Nation as a whole. The State of Louisiana
    appreciates the accomplishments of the past and solicits your
    consideration of the appropriations requested for fiscal year 2004.

    MISSISSIPPI RIVER AND TRIBUTARIES--SUMMARY OF RECOMMENDED APPROPRIATIONS
                    FOR FISCAL YEAR 2004--STATE OF LOUISIANA
    ------------------------------------------------------------------------
                                              Administrative     Louisiana
                    Louisiana                     Budget          Request
    ------------------------------------------------------------------------
    FC MR&T General Investigations:
        Alexandria to the Gulf..............        $435,000        $435,000
        Donaldsonville to the Gulf..........         800,000       1,200,000
        Morganza to the Gulf, PED...........       3,487,000      10,000,000
        Collection & Study Data.............         190,000         190,000
        Donaldsonville Port Development, LA.  ..............         100,000
        Point Coupee St Mary Watershed......  ..............         100,000
        Collect & Study of Basic Data (AR,           280,000         280,000
         LA, MS)............................
        Spring Bayou Area, LA...............         500,000         600,000
        Tensas River Basin, LA..............  ..............         500,000
    FC MR&T Construction:
        Atchafalaya Basin...................      14,075,000      24,075,000
        Atchafalaya Basin Floodwater System.       7,768,000      11,668,000
        Channel Improvement.................       8,900,000       8,900,000
        Mississippi Delta Region (FED)......       3,200,000       3,200,000
        Mississippi River Levees, LA........       4,110,000       4,110,000
        Mississippi River Levees (AR, LA,         23,615,000      25,115,000
         MS)................................
        Channel Improvement (AR, LA, MS)....      15,235,000      17,735,000
    FC MR&T Maintenance:
        Atchafalaya Basin...................      13,335,000      18,296,000
        Atchafalaya Basin Floodway System...       2,450,000       3,850,000
        Baton Rouge Harbor (Devil's Swamp)..          15,000         281,000
        Bayou Cocodrie and Tributaries......          85,000          85,000
        Bonnet Carre Spillway...............       1,975,000       3,009,000
        Channel Improvement.................      15,300,000      15,300,000
        Dredging............................         700,000         700,000
        Inspection of Completed Works.......         425,000         425,000
        Mapping.............................         440,000         440,000
        MS Delta Region.....................         910,000         910,000
        Mississippi River Levees, LA........         785,000       1,285,000
        Old River...........................       9,915,000      21,102,000
        Mississippi River Levees (AR, LA,          2,050,000       2,650,000
         MS)................................
        Revetments & Dikes (AR, LA, MS).....      14,000,000      14,000,000
        Dredging (AR, LA, MS)...............       5,600,000       5,600,000
        Mapping (AR, LA, MS)................         365,000         365,000
        Inspection of Completed Works (AR,           375,000         375,000
         LA, MS)............................
        Boeuf & Tensas Rivers...............       2,400,000       2,400,000
        Red River Backwater.................       3,425,000       3,982,000
        Lower Red River.....................       2,207,000       2,207,000
    ------------------------------------------------------------------------
    NOTE: The projects listed above are only those in Louisiana (except when
      noted) and directly affect the State. We realize that there are other
      projects in the Valley. We endorse the recommendations of the
      Mississippi Valley Flood Control Association.

        The following is a list of budgetary items that the State of
    Louisiana requests funding that differs from what is recommended in the
    Fiscal Year 2004 Administrative Budget or is an item of particular
    importance for the State. Those items that the State of Louisiana
    believes have been appropriately funded have not been included.

       FLOOD CONTROL, NAVIGATION, HURRICANE PROTECTION AND WATER RESOURCES
    PROJECTS IN LOUISIANA--SUMMARY OF RECOMMENDED APPROPRIATIONS FISCAL YEAR
                                      2004
    ------------------------------------------------------------------------
                                              Administrative     Louisiana
                    Louisiana                     Budget          Request
    ------------------------------------------------------------------------
    General Investigations:
        Studies:
            Amite River & Tributaries, LA--         $100,000        $800,000
             Bayou Manchac..................
            Atchafalaya River, Bayous Chene,         150,000       1,000,000
             Boeuf & Black, LA..............
            Calcasieu Lock, LA..............         100,000         800,000
            Calcasieu River Pass Ship         ..............         200,000
             Channel Enlargement, LA........
            GIWW--Ecosystem Restoration, LA.         100,000         600,000
            Hurricane Protection, LA........         100,000       1,000,000
            LCA--Ecosystem Restoration, LA..         848,000       3,000,000
            Plaquemines Parish, LA..........         100,000         500,000
            Port of Iberia, LA..............         150,000       2,000,000
            St. Bernard Parish Urban Flood           100,000         500,000
             Control, LA....................
            St. Charles Parish Urban Flood           100,000         450,000
             Control, LA....................
            St. John the Baptist Parish, LA.         100,000         400,000
            Southwest, AR (AR, LA)..........  ..............         400,000
            Pearl River, Bogalusa (MS)......  ..............         350,000
        PED:
            West Shore-Lake Pontchartrain,    ..............         600,000
             LA.............................
            West Baton Rouge Parish, LA.....  ..............       1,500,000
        New Studies:
            Bayou Nezpique Watershed, LA....  ..............         100,000
            Millennium Port, LA.............  ..............         100,000
            Tangipahoa River Ecosystem        ..............         100,000
             Restoration, LA................
    Construction General:
        Comite River, LA....................       2,000,000       6,565,000
        East Baton Rouge Parish, LA.........  ..............       4,600,000
        Grand Isle, LA......................  ..............         200,000
        Inner Harbor Navigation Canal Lock,        7,000,000      20,000,000
         LA (IWWTF & CG)....................
        Lake Pontchartrain, LA..............       3,000,000      16,000,000
        Larose to Golden Meadow, LA.........         461,000       1,200,000
        MR-GO (Reevaluation Study)..........  ..............         250,000
        New Orleans to Venice, LA...........       2,000,000       6,000,000
        Southeast, LA.......................      16,500,000      65,000,000
        West Bank and Vicinity, New Orleans,      35,000,000      35,000,000
         LA.................................
        Red River Below Den Dam (AR, LA)....  ..............       7,000,000
        Red River Emergency (AR, LA)........  ..............      10,000,000
        J. Bennett Johnston Waterway, MS          13,700,000      29,000,000
         River to Shreveport................
        Ouachita River Levees...............  ..............       3,000,000
    Operations & Maintenance General:
        Atchafalaya River, Bayous Chene,          19,367,000      24,367,000
         Boeuf & Black......................
        Barataria Bay Waterway..............         286,000       4,909,000
        Bayou Lacombe.......................  ..............         315,000
        Bayou Lafourche.....................         133,000       1,221,000
        Bayou Segnette......................         165,000       1,535,000
        Bayou Teche.........................          48,000         354,000
        Calcasieu River & Pass..............      12,064,000      20,559,000
        Freshwater Bayou....................       1,558,000       3,558,000
        Grand Isle, LA & Vicinity...........  ..............         455,000
        Gulf Intracoastal Waterway..........      19,418,000      29,028,000
        Houma Navigation Canal..............       1,242,000       1,422,000
        Mermentau River.....................       2,651,000       4,651,000
        Mississippi River, Baton Rouge to         56,206,000      64,566,000
         the Gulf...........................
        Mississippi River--Gulf Outlet......      13,485,000      34,325,000
        Mississippi River, Outlets at Venice       1,841,000       5,116,000
        Waterway Empire to the Gulf.........           7,000         247,000
        Waterway Intracoastal Waterway to             37,000         237,000
         Bayou Dulace.......................
        Ouachita & Black Rivers (AR, LA)....      10,221,000      16,145,000
        J. Bennett Johnston Waterway........      12,013,000      19,900,000
        Lake Providence Harbor..............          32,000         421,000
        Madison Parish Port.................          13,000          80,000
    ------------------------------------------------------------------------
    NOTE: The projects listed above are only those in Louisiana (except
      where noted) and directly affect the State.

                                     ______

      Prepared Statement of the Upper Mississippi River Basin Association
                                  introduction
        The Upper Mississippi River Basin Association (UMRBA) is the
    organization created in 1981 by the Governors of Illinois, Iowa,
    Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating
    river-related State programs and policies and for collaborating with
    Federal agencies on regional issues. As such, the UMRBA works closely
    with the Corps of Engineers on a variety of programs for which the
    Corps has responsibility. Of particular interest to the basin states
    are the following:
                           inland waterway trust fund
        The UMRBA opposes expanding the uses of the Inland Waterway Trust
    Fund to include operation and maintenance of the inland navigation
    system. The Inland Waterway Trust Fund was established in 1986 to help
    meet the Nation's navigation infrastructure investment needs for new
    construction and major rehabilitation on inland rivers. That dedicated
    revenue source, generated by taxes on commercial users of the inland
    waterway system, should not be diverted to uses other than those for
    which it was established. Moreover, the Corps has estimated that
    partially funding inland waterway O&M from the Inland Waterway Trust
    Fund would deplete the Fund entirely by the end of fiscal year 2006.
    Given the pressing navigation infrastructure needs in coming years,
    such a course would be imprudent.
                        environmental management program
        For the past 16 years, the Upper Mississippi River System
    Environmental Management Program (EMP) has been the premier program for
    restoring the river's habitat and monitoring the river's ecological
    health. As such, the EMP is key to achieving Congress' vision of the
    Upper Mississippi as a ``nationally significant ecosystem and a
    nationally significant commercial navigation system.'' Congress
    reaffirmed its support for this program in the 1999 Water Resources
    Development Act by reauthorizing the EMP as a continuing authority and
    increasing the annual authorized appropriation to $33.52 million. The
    UMRBA is pleased that the Administration's budget request, for the
    first time since the 1999 reauthorization of the program, includes
    nearly full funding for the EMP. The fact that the Administration has
    identified the EMP as one of eight Corps projects ``that are the
    highest priorities in the Nation,'' is tribute to the EMP's success.
        EMP habitat restoration projects include activities such as
    building and stabilizing islands, controlling water levels and side
    channel flows, constructing dikes, and dredging backwaters and side
    channels. At the recommended EMP funding level of $33.32 million,
    approximately $18.8 million would be allocated to the planning, design,
    and construction of such habitat projects. In particular, this level of
    investment will support planning work on 15 projects, design of 14
    projects, and construction of 12 projects. Approximately $8.6 million
    would be devoted to the EMP Long Term Resource Monitoring program
    (LTRMP) under a fully funded EMP budget of $33 million. At this funding
    level, data collection activities would be revived, including
    monitoring of water quality, sediment, fish, invertebrates, and
    vegetation. This monitoring, along 300 of the river system's 1,300
    miles, had to be suspended in fiscal year 2003 due to lack of funding.
    If funding is not restored in fiscal year 2004, the LTRMP will need to
    be significantly restructured. Either the spatial extent of the program
    will need to be reduced, by eliminating field stations, or sampling
    intensity and rigor will need to be reduced. Neither alternative is
    sustainable and ultimately the ability of the program to fulfill its
    Congressionally mandated mission will be jeopardized.
        Meeting the ecological restoration and monitoring needs on the
    Upper Mississippi River with renewed commitment and enhanced investment
    is critical, given the setback that the EMP suffered in fiscal year
    2003, when funding was cut by nearly 40 percent. Within the next year,
    the Corps is expected to release its Navigation Study on the Upper
    Mississippi River and Illinois Waterway System, including a recommended
    plan for improving both the river navigation infrastructure and
    ecosystem. Yet, without a strong EMP program as one of the tools to
    meet river environmental needs, it is unlikely that the plan can be
    successfully implemented. The UMRBA thus strongly urges that the EMP be
    funded at $33.32 million in fiscal year 2004, as recommended by the
    President.
                     major rehabilitation of locks and dams
        Given that most of the locks and dams on the Upper Mississippi
    River System are over 60 years old, they are in serious need of repair
    and rehabilitation. For the past 17 years, the Corps has been
    undertaking major rehabilitation of individual facilities throughout
    the navigation system in an effort to extend their useful life. This
    work is critical to ensuring the system's reliability and safety.
        The UMRBA supports the Corps' fiscal year 2004 budget request for
    major rehabilitation work at 3 locks and dams on the Upper Mississippi
    River, including Lock and Dam 24, Lock and Dam 11, and Lock and Dam 3.
    Half of these amounts are to be provided by the Inland Waterways Trust
    Fund. Lock and Dam 24, located near Clarksville, Missouri, is nearing
    completion of the first phase of its $87 million rehabilitation. Lock
    wall concrete repairs are underway and expected to continue in fiscal
    year 2004. However, the fiscal year 2004 budget request of $13 million
    is a constrained funding level, which may require suspension of the
    contract, thus ultimately increasing project cost. UMRBA thus supports
    $17 million for rehabilitation of Lock and Dam 24, which is the fiscal
    year 2004 capability level.
        Rehabilitation of Lock and Dam 11, located near Dubuque, Iowa,
    began in fiscal year 2002. The work includes repair and replacement of
    various miter and tainter gate components, culvert valve
    rehabilitation, and additional scour protection above and below the
    dam. The fiscal year 2004 budget request is $1.313 million, but the
    UMRBA supports the full capability funding of $6.52 million.
        Lock and Dam 3, near Red Wing, Minnesota is located on a bend in
    the river, which causes an outdraft current that tends to sweep down-
    bound tows toward the gated dam. A related problem is maintaining the
    structural integrity of a set of 3 earthen embankments connecting the
    gated dam to high ground on the Wisconsin side. A reevaluation study is
    now underway to assess alternatives for addressing these related
    navigation safety problems and potentially combining the projects. The
    UMRBA supports fiscal year 2004 funding of $600,000, as requested by
    the President, to complete the study and begin work on plans and
    specifications.
        operation and maintenance (o&m) of the upper mississippi river
                               navigation system
        The Corps of Engineers is responsible for operating and maintaining
    the Upper Mississippi River System for navigation. This includes
    channel maintenance dredging, placement and repair of channel training
    structures, water level regulation, and the routine operation of 29
    locks and dams on the Mississippi River and 7 locks and dams on the
    Illinois River. The fiscal year 2004 budget totals approximately $144
    million for O&M of this river system, which includes $97.859 million
    for the Mississippi River between Minneapolis and the Missouri River,
    $18.099 million for the Mississippi River between the Missouri River
    and Ohio River, and $27.615 million for the Illinois Waterway.
        These funds are critical to the Corps' ability to maintain a safe
    and reliable commercial navigation system. In addition, these funds
    support a variety of activities that ensure the navigation system is
    maintained while protecting and enhancing the river's environmental
    values. For example, O&M funds support innovative environmental
    engineering techniques in the open river reaches such as bendway weirs,
    chevrons, and notched dikes that maintain the navigation channel in an
    environmentally sensitive manner. In addition, water level management
    options for a number of pools in the impounded portion of the river are
    being evaluated under the O&M program. Pool level management, such as
    that being tested in Pool 8 and proposed in Pools 6 and 9, is a
    promising new approach for enhancing aquatic plant growth and
    overwintering conditions for fish, without adversely affecting
    navigation.
        Although the President's fiscal year 2004 funding request for O&M
    is slightly higher than fiscal year 2003 funding levels for most
    segments of the river system, unfortunately it is substantially less
    for the St. Paul District (MVP) and well below capability levels in the
    other two Districts.

                                                  [Millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                        Fiscal Year
               Upper Mississippi River System O&M Accounts              Fiscal Year     Fiscal Year      2004 Full
                                                                       2003 Omnibus    2004 Request     Capability
    ----------------------------------------------------------------------------------------------------------------
    Mississippi River Between MO River and Minneapolis:
        St. Paul District (MVP).....................................          41.820          36.056          56.306
        Rock Island District (MVR)..................................          41.820          44.429          54.779
        St. Louis District (MVS)....................................          15.443          17.374          26.434
    Mississippi River Between Ohio and MO Rivers....................          17.000          18.099          29.399
    Illinois Waterway:
        Rock Island District (MVR)..................................          25.154          25.726          35.026
        St. Louis District (MVS)....................................           1.683           1.889           1.889
    ----------------------------------------------------------------------------------------------------------------

        The 23 percent reduction in Mississippi River O&M funding for the
    St. Paul District is of particular concern. This dramatic cut will
    eliminate the Mississippi River Endangered Species Recovery program and
    all maintenance construction contracts, with the exception of dredging
    and the continuing contract for the Lock and Dam 9 control systems and
    building replacement. Anticipated contract suspensions or cancellations
    include those for tow haulage unit replacements, Lock and Dam 4 dam
    gate painting, Lock and Dam 1 Ambursen Dam rehabilitation, Lock and Dam
    6 fixed crest spillway repairs, Lock and Dam 10 control systems and
    building replacement, West Newton dredged material site unloading, and
    Upper St. Anthony Falls lock dewatering. In addition, the St. Paul
    District will be unable to address the recently-identified lock
    bulkhead problems at several facilities. It is projected that $31
    million will be required over the next 5 years to construct bulkhead
    slots needed to safely dewater Locks 2-10 for repair.
        The UMRBA supports increased funding for O&M of the Upper
    Mississippi and Illinois River System, particularly in the St. Paul
    District. Full capability funding in fiscal year 2004 for all three
    Upper Mississippi River districts totals $204 million.
                                navigation study
        The Upper Mississippi River and Illinois Waterway Navigation Study,
    which began in 1993, was restructured in 2001, in response to
    recommendations from the National Research Council and a new Task Force
    of senior leaders from 5 Federal agencies. Now that the study is on a
    new course, designed to address both navigation and environmental needs
    in an integrated fashion, the UMRBA is anxious to see the study brought
    to a successful and timely conclusion. On-going analyses are expected
    to yield results that will be used to develop tentative integrated
    plans by October 2003, incorporating both navigation improvements and
    ecosystem restoration. Fiscal year 2004 activities will thus focus on
    agency, stakeholder, and public review and input. This will be an
    extremely critical step in the collaborative process, which is expected
    to yield a Chief's Report by November 2004. In order to keep this
    process on track, it is essential to fully fund the Navigation Study,
    as requested by the President.
      upper mississippi river comprehensive plan (flood damage reduction)
        Section 459 of the Water Resources Development Act of 1999
    authorized the Corps to develop what is termed the ``Upper Mississippi
    River Comprehensive Plan,'' the primary focus of which is systemic
    flood damage reduction and flood protection. In fiscal year 2003, a
    Project Management Plan (PMP) was developed and data gathering efforts
    are now underway. Funding is needed in fiscal year 2004 to continue the
    inventory and digital data coverages of floodplain land use,
    infrastructure, natural resources, and socioeconomic data and to begin
    the development and analysis of alternatives. Development of the
    Comprehensive Plan has been awaiting completion of the Flow Frequency
    Study, which will provide updated flood elevation profiles and models.
    That work is scheduled for completion this fiscal year, thus paving the
    way for the Comprehensive Plan to be undertaken in earnest.
        The total study costs for the Upper Mississippi River Comprehensive
    Plan are estimated to be $5.13 million. In fiscal year 2002, the first
    year that funding was provided, $692,000 was allocated. In fiscal year
    2003, an additional $1.814 million was provided. However, only $492,000
    has been requested for fiscal year 2004. Unless additional funds are
    made available in fiscal year 2004, the study will not be completed in
    the 3-year time frame Congress directed when the study was first
    authorized in WRDA 1999, and later reaffirmed in WRDA 2000. Thus, the
    UMRBA supports full funding of $2.624 million in fiscal year 2004.
                                 stream gaging
        The Corps of Engineers in cooperation with the USGS operates
    approximately 150 stream gages in the Upper Mississippi River Basin. In
    fiscal year 2003, the Corps' share of the cost of these gages is $1.888
    million. Most of these stream gages are funded through the Corps' O&M
    account for the specific projects to which the gages are related.
    However, there are a number of gages that are not associated with a
    particular project. Thus, UMRBA supports the $500,000 requested under
    General Investigations to support the Corps' share of non-project USGS
    stream gages, many of which are located in the 5 States of the Upper
    Mississippi River Basin. In fiscal year 2003, approximately $127,000
    was provided by these ``General Coverage Funds'' for gages in the St.
    Paul and Rock Island Districts.
                                     ______

                  Prepared Statement of The Nature Conservancy
        Mr. Chairman and members of the subcommittee, I appreciate this
    opportunity to present The Nature Conservancy's recommendations for
    fiscal 2004 appropriations. We understand and appreciate that the
    subcommittee's ability to fund programs within its jurisdiction is
    limited by current national emergency but appreciate your consideration
    of these important programs.
        The Nature Conservancy is an international, non-profit organization
    dedicated to the conservation of biological diversity. Our mission is
    to preserve the plants, animals and natural communities that represent
    the diversity of life on Earth by protecting the lands and waters they
    need to survive. The Conservancy has more than 1,000,000 individual
    members and 1,900 corporate associates. We have programs in all 50
    States and in 28 foreign countries. We have protected more than 14.0
    million acres in the United States and more than 80 million acres with
    local partner organizations worldwide. The Conservancy owns and manages
    1,400 preserves throughout the United States--the largest private
    system of nature sanctuaries in the world. Sound science and strong
    partnerships with public and private landowners to achieve tangible and
    lasting results characterize our conservation programs.
        The Nature Conservancy urges the Committee to support the following
    appropriation levels in the fiscal 2004 Energy and Water Development
    Appropriation bill:
                        construction general priorities
        Section 1135: Project Modification for the Improvement of the
    Environment.--The Section 1135 Program authorizes the Army Corps of
    Engineers (Corps) to restore areas damaged by existing Corps projects.
    This program permits modification of existing dams and flood control
    projects to increase habitat for fish and wildlife without interrupting
    a project's original purpose. The Nature Conservancy is the non-Federal
    cost share partner on several projects including the McKarran Ranch on
    the Truckee River, NV and Spunky Bottoms on the Illinois River, IL. The
    Nature Conservancy supports full funding of $25.0 million for the
    Section 1135 program in fiscal 2004, an increase over the
    administration's $14.0 million request.
        Section 206: Aquatic Ecosystem Restoration.--Section 206 is a newer
    Corps program that authorizes the Corps to restore aquatic habitat
    regardless of past activities. The Nature Conservancy has several
    projects that put Section 206 to work restoring important habitat,
    including a $5 million project at Kankakee Sands in Indiana, and the
    Mad Island Aquatic Ecosystem Restoration Project in Texas. The Nature
    Conservancy supports full funding of $25.0 million for this valuable
    program in fiscal 2004, an increase over the administration's $10.0
    million request.
        Upper Mississippi River System Environmental Management Program.--
    The Environmental Management Program (EMP) is an important Corps
    program that constructs habitat restoration projects as well as
    conducts long-term resource monitoring of the Upper Mississippi and
    Illinois Rivers. The EMP operates as a unique Federal-State partnership
    affecting 5 States (Illinois, Iowa, Minnesota, Missouri, and
    Wisconsin). The EMP was reauthorized in WRDA 1999 with an increased
    authorization in the amount of $33.3 million. The Nature Conservancy
    supports the President's request for full funding of $33.3 million for
    fiscal 2004.
        Estuary Habitat Restoration Program.--The Estuary Habitat
    Restoration Program was established with the intent to restore 1
    million acres of estuary habitat by 2010. This multi-agency program
    will promote projects that result in healthy ecosystems that support
    wildlife, fish and shellfish, improve surface and groundwater quality,
    quantity, and flood control; and provide outdoor recreation. The Nature
    Conservancy supports $10 million in fiscal 2004.
        Everglades and South Florida Ecosystem Restoration.--The Everglades
    and South Florida Ecosystem Restoration program is designed to save and
    restore a critical natural treasure by acquiring high priority natural
    lands for protection, capturing runoff lost to tide, restoring natural
    hydropatterns essential for the overall heath of the system and for
    protecting water supplies for human use. The Nature Conservancy
    supports $45.0 million in fiscal 2004, an increase over the
    administration's $14.8 million request.
        Florida Keys Water Quality Program.--The Florida Keys Water Quality
    Program is a unique restoration program designed to protect the fragile
    marine and coral ecosystem off the Florida Keys. This marine ecosystem
    is being impacted by excessive nutrients due to storm and waste water
    pollution. This program is cost shared with State and local interests
    to repair and improve the storm and wastewater treatment facilities on
    the Florida Keys to reduce the harmful levels of nutrient pollution.
    The Nature Conservancy, and its partners the State of Florida, Florida
    Keys Aqueduct Authority, Monroe County, City of Islamorada, City of
    Layton, City of Key Colony Beach, City of Marathon, and City of Key
    West, support $30.0 million for fiscal 2004.
        Missouri River Fish and Wildlife Mitigation.--Created in WRDA 1986,
    the Missouri River Fish and Wildlife Mitigation Project is designed to
    reverse the negative environmental impacts of lower river
    channelization and bank stabilization through land acquisition from
    willing sellers. The Mitigation Project allows the Corps to restore
    chutes, side channels, and other off-channel floodplain habitat for
    river wildlife. The Nature Conservancy supports the President's request
    of $22.0 million for fiscal 2004.
        Challenge 21: Riverine Ecosystem Restoration and Flood Hazard
    Mitigation Program.--The Water Resources Development Act (WRDA) 1999
    authorized the Challenge 21 program as a 5-year, $200 million effort to
    enhance riverine ecosystems and encourage non-structural flood control
    projects. Challenge 21 directs non-structural flood control, in part
    through relocation of frequently flooded homes and businesses in
    smaller communities; and habitat restoration, including floodplain
    wetland restoration. The Nature Conservancy supports $5.0 million as an
    initial appropriation in fiscal 2004.
                        general investigation priorities
        White River Basin Comprehensive Study in Arkansas.--The White River
    Basin Comprehensive Study will enable the Corps to pull together the
    needs of myriad issues in the White River basin and permit a sensible
    long term plan for the region. The Nature Conservancy strongly supports
    $1.0 million in fiscal 2004 for the Army Corps of Engineers (Corps) to
    continue the Comprehensive Study in the White River basin, an increase
    over the administration's $300,000 request.
        Savannah River Basin Comprehensive Water Resources Study.--The
    Savannah Basin Comprehensive Water Resources Study will enable the
    Corps and other partners to gain a better understanding of the
    influence of hydrologic processes such as timing, duration, frequency,
    magnitude, and rate of change of river flows on the river's ecology.
    The Nature Conservancy, under a cooperative agreement funded by the
    USACE and its cost share partners Georgia and South Carolina, is
    working to develop a set of ecosystem flow recommendations for the
    Savannah River Basin. Draft flow recommendations will be finalized by
    May 2003. The Nature Conservancy supports the President's request of
    $200,000 in fiscal 2004.
        Sacramento and San Joaquin Comprehensive Basin Study.--The
    Sacramento and San Joaquin Comprehensive Basin Study is examining how
    to reduce the risk of flood while restoring the watershed's diverse
    ecosystem. The Nature Conservancy supports the President's request of
    $1.0 million in fiscal 2004.
        Connecticut River Ecosystem Restoration Study.--The Connecticut
    River Ecosystem Restoration Study identified several ecosystem
    restoration opportunities along the mainstem of the Connecticut River.
    These funds will support studies of the ecological flow needs and
    initiate needed modeling on the Ashuelot River, NH and the West River,
    VT, part of the Sustainable Rivers Project, a unique collaboration with
    the Army Corps of Engineers and The Nature Conservancy. The Sustainable
    Rivers Project seeks to reoperate 16 dams on 12 rivers to better meet
    the needs of the freshwater ecosystem while still abiding by the
    required purposes of the dams. The Nature Conservancy supports $315,000
    for fiscal 2004, an increase over the administration's $115,000
    request.
        Southeast Oklahoma Feasibility Study.--The reconnaissance phase of
    the Southeast Oklahoma Feasibility Study determined there is Federal
    interest to preserve and/or restore the riverine ecosystem of the
    Kiamichi River Basin between the confluence of Jackfork Creek and the
    Kiamichi River and the upper reaches of Hugo Lake over the 50-year
    period of analysis. These funds will support studies of the ecological
    flow needs and initiate needed modeling on the Kiamichi River which is
    part of the Sustainable Rivers Project, a unique collaboration with the
    Army Corps of Engineers and The Nature Conservancy. The Sustainable
    Rivers Project seeks to reoperate 16 dams on 12 rivers to better meet
    the needs of the freshwater ecosystem while still abiding by the
    required purposes of the dams. The Nature Conservancy supports $100,000
    for fiscal 2004, an increase over the administration's $50,000 request.
                         regulatory program priorities
        Southern California Special Area Management Plan (SAMP).--For the
    past 3 years, the Army Corps has been working with three Southern
    California counties to develop region-wide Special Area Management
    Plans that identify, delineate and plan for the conservation of
    wetlands within their jurisdictions. These SAMPs are a critical part of
    the regional effort to protect critical natural and resources to plan
    for continued economic growth in Southern California. They are emerging
    as an important planning tool that addresses streamlining of Federal
    wetlands regulations while promoting more effective wetlands
    conservation and providing long-term certainty for economic interests
    in the region. The Southern California SAMP process is being evaluated
    as a model for wetlands planning in other areas. The Nature Conservancy
    supports $1.9 million for fiscal 2004.
                        bureau of reclamation priorities
        Recovery Implementation Program for Colorado Endangered Fish
    Species.--The Recovery Program is in its thirteenth year of working for
    the recovery of endangered fish species in the Upper Colorado River
    Basin. The Recovery Program serves as a model of successful cooperation
    between three States (Colorado, Utah, and Wyoming), Federal agencies,
    water development interests, power users and the environmental
    community in the recovery of four endangered fish species. The Nature
    Conservancy supports $5.9 million in fiscal 2004 for the Bureau of
    Reclamation.
        Thank you for the opportunity to present The Nature Conservancy's
    comments on the Energy and Water Development Appropriations bill. We
    recognize that you receive many worthy requests for funding each year
    and appreciate your consideration of these requests and the generous
    support you have shown for these and other conservation programs in the
    past. If you have any further questions, please do not hesitate to
    contact us.
                                     ______

        Prepared Statement of Southeastern Federal Power Customers, Inc.
        Mr. Chairman and Members of the Subcommittee: On behalf of the
    Southeastern Federal Power Customers' (``SeFPC''), I am pleased to
    provide testimony in reference to the Administration's fiscal year 2004
    budget request for the U.S. Army Corps of Engineers (``Corps''). My
    testimony will focus primarily on the budget request for the Corps'
    South Atlantic Division (``SAD'') and the Great Lakes and Ohio River
    Division (``LRD'').
        The SeFPC has enjoyed a long and successful relationship with the
    Corps' SAD and LRD offices that has greatly benefited the approximately
    5.8 million customers that are SeFPC members. As the Subcommittee is
    aware, the Corps is responsible for operating and maintaining Federal
    hydropower generating facilities. The Southeastern Power Administration
    (``SEPA'') then markets the energy and capacity that is generated from
    the Federal projects in the Southeast. The SeFPC represents some 238
    rural cooperatives and municipally owned electric systems in the States
    of Alabama, Georgia, Mississippi, Kentucky, North Carolina, South
    Carolina, Florida, Virginia, and West Virginia, which purchase power
    from SEPA. In some cases, SEPA supplies as much as 25 percent of the
    power and 10 percent of the energy needs of SeFPC customers. The SeFPC
    therefore greatly relies on the power generated at Corps' projects in
    the SAD and LRD.
                       drastic cuts in the corps' budget
        The members of the SeFPC are dedicated to providing reliable and
    economic power for their consumers. We therefore are concerned that the
    President has proposed a 30 percent reduction in the Corps' Operations
    & Maintenance (``O&M'') account and 25 percent reduction in the
    Construction General Account for the upcoming fiscal year. With these
    reductions in funding, the Corps will not be able to undertake the O&M
    and Renewals & Replacements (``R&R'') work necessary to ensure the
    long-term reliability of the Southeastern Federal hydropower
    facilities. We are particularly concerned about the effects of the
    proposed budget cuts on ongoing O&M work on hydropower infrastructure
    within the SEPA system of projects.
        The proposed reductions will impede the Corps' work in the
    following SEPA projects: Walter F. George, J. Strom Thurmond, John H.
    Kerr, Allatoona, and Carters.
        We also are concerned the President's budget request has zeroed out
    funds for construction at many of the projects operated by the Corps of
    Engineers. If enacted, the prohibition on ``new starts'' would delay
    the badly needed rehabilitation of generating facilities in the
    Cumberland River System and throughout the Southeast. Many of the
    hydroelectric generating facilities in SEPA's service area are nearing
    the 50-year mark, when major rehabilitations are critical if the
    project is to continue. Regrettably, the fiscal year 2004 budget
    request does not place a high priority on critical needs, such as: (1)
    $4 million for replacement of generating units at Wolf Creek project;
    and (2) $2.8 million to initiate replacement of generating units at
    Center Hill.
        When a generating unit becomes inoperable, SEPA may be forced to
    purchase expensive replacement power which could result in a reduction
    of energy and capacity, possibly forcing the customer to purchase
    expensive capacity elsewhere. This has occurred so frequently in the
    last several years that the new SEPA rate design now includes a monthly
    payment provision by customers to cover any replacement power. Such a
    result is inappropriate because preference customers already have
    contributed to the Corps' O&M and R&R expenses, and in essence are
    double-charged. Even though excess payments pay down the debt
    associated with the projects, when generating units deteriorate, the
    O&M expenses greatly increase.
        We are working on a long-term customer funding proposal that would
    facilitate this badly needed replacement and rehabilitation work at
    hydroelectric facilities in the LRD and SAD. We anticipate, however,
    that this long-term initiative will not be finalized for several years.
    In the meantime, some of these facilities will not be able to continue
    running without Federal funds.
              administration's proposal for direct funding of o&m
        It is important to note that the relationship of the Corps, SEPA,
    and the SeFPC, forged pursuant to the Federal Power Marketing Program,
    is separate and distinct from other Corps activities. The Federal Power
    Marketing Program is designed to pay for itself--consumers are
    responsible for repaying the Federal taxpayer investment in the Corps'
    multi-purpose hydroelectric facilities. In the rates charged by SEPA to
    preference customers, a portion of each rate is devoted to future O&M
    and R&R activities at these facilities. In turn, these revenues are
    deposited in the Treasury and used to reimburse Congressionally
    appropriated funds for O&M and R&R expenses at the Corps' hydropower
    facilities. Funds collected from consumers may also be used for the
    joint costs of dam activities such as recreation, navigation and flood
    control. To date, preference customers have paid in SEPA rates over
    $108 million in excess of amounts spent by the Corps on O&M and R&R.
        The Administration's fiscal year 2004 budget request proposes to
    alter this funding arrangement. This year's request includes a
    provision from the President's fiscal year 2003 request calling for
    direct funding of routine hydropower O&M for SEPA and the other Federal
    Power Marketing Administrations. While we support the concept of direct
    funding for O&M expenses, we have concerns with the Administration's
    proposal. We believe the proposal could limit customer oversight and
    involvement in how O&M funds are spent. Moreover, as we have discussed
    in greater detail above, some of the most pressing needs at the
    Nation's Federal hydropower facilities would require major
    rehabilitation and other new construction expenses not covered by the
    O&M proposal.
        Thank you in advance for your consideration of our comments on the
    Administration's fiscal year 2004 budget request for the Corps. We look
    forward to working with you to ensure these critical needs are met.
                                     ______

         Prepared Statement of the City of Los Angeles Board of Harbor
                       Commissioners, Port of Los Angeles
        Chairman Domenici, and Members of the Subcommittee: We are Nicholas
    G. Tonsich, President of the City of Los Angeles Board of Harbor
    Commissioners, and Larry A. Keller, Executive Director of the Port of
    Los Angeles. Together, we oversee the activities of the Port of Los
    Angeles, the largest container seaport in the United States. Our
    testimony speaks in support of continuing the Federal role in carrying
    out the major navigation improvements underway at the Port, which
    underpin the United States' decisive role in global trade.
        We thank your Subcommittee for its unwavering support of the now
    completed Pier 400 Deep-Draft Navigation and Landfill Project that was
    the first phase of the 2020 Infrastructure Development Plan at the
    Port. In fiscal year 2002, your Subcommittees appropriated $5.8
    million, thereby enabling the Port and the Corps of Engineers to
    complete the Preconstruction and Engineering Design Phase resulting in
    the successful commencement of construction of the Channel Deepening
    Project, the second phase of strategic navigation improvements under
    the 2020 Plan. The construction contract was awarded in August 2002 and
    dredging began the following month. The project is scheduled for
    completion in fiscal year 2005.
        Again, in fiscal year 2003, your Subcommittee demonstrated its
    decisive role in promulgating support for critical national water
    resources policy through the appropriation of scarce Federal funds to
    continue development of our Nations' navigation infrastructure program.
    The Subcommittee's fiscal year 2003 earmark of $12 million has kept the
    Channel Deepening Project on schedule.
        Today, we respectfully submit testimony requesting full Federal
    funding in fiscal year 2004 for continued construction dredging of the
    Channel Deepening Project and for particular operations and maintenance
    requirements. Consistent with the goals and priorities of the
    Administration and the Congress, the Channel Deepening Project will
    provide significant economic return to the Nation, fulfill the
    commitment to environmental stewardship, and maintain essential
    readiness for our national security while fostering positive
    international relations. Therefore, we respectfully ask the
    Subcommittee to fully fund our fiscal year 2004 appropriations
    requests.
       the importance of the 2020 infrastructure development plan to the
                             united states economy
        Dramatic increases in Pacific Rim and Latin American trade volumes
    have far exceeded our expectations! Consequently, infrastructure
    development at the Port of Los Angeles is now more critical than ever.
    More than 35 percent of containerized trade entering the United States
    through the San Pedro Bay port complex that comprises both the Port of
    Los Angeles and the Port of Long Beach. More than 20 percent represents
    container throughputs at the Port of Los Angeles, alone. In fact, the
    Port of Los Angeles handled more than 5.1 million TEUs in 2002. Those
    figures have escalated to more than 6 million TEUs of container cargo
    through the end of January of this year. These container throughputs
    represent $300 billion in goods coming into the United States, and are
    keen evidence of the unprecedented and continued growth for any
    American seaport--and the importance of the Port of Los Angeles in the
    national economy.
        Pacific Rim and Mexican trade volumes with the United States are
    also at an all-time high. These increased trade volumes have solidified
    the Port of Los Angeles as a pivotal player in the global trading
    network. With a robust Asian economy, we can best describe the
    potential for increased two-way trade with the Pacific Rim region,
    alone, as colossal! These goods went on to stores and manufacturing
    plants across the United States, supporting jobs and local economies.
    As was evidenced by the recent West Coast labor lock out, the indirect
    impacts to our national economy are significant, and are a result of
    the leading position the Port of Los Angeles enjoys in the national and
    world economies.
        In the late 1970s, the Port of Los Angeles quite accurately
    forecast the current surge in the international trade needs of both the
    Southern California region and the Nation. In the early 1980s, the Port
    entered a long-term cooperative planning effort with the Corps of
    Engineers, known as The 2020 Infrastructure Development Plan. Designed
    to meet the extraordinary infrastructure demands placed on it in the
    face of the continued explosion in global trade, the 2020 Plan
    acknowledges the phenomenal growth of trade through the Port of Los
    Angeles. Further, the 2020 Plan has become a blueprint for the
    infrastructure development of other ports and adaptation to changes in
    maritime technology and to the projected growth in trade volumes
    experienced by most ports nationally. The Channel Deepening Project
    marks the second phase of the 2020 Plan begun with the Pier 400 Deep-
    Draft Navigation and Landfill Project. The Port of Los Angeles is
    moving forward with the 2020 Plan.
                         the channel deepening project
        The Channel Deepening Project began in February 1999 when the Port
    and the Los Angeles District Corps executed a Memorandum of Agreement
    (MOA). The MOA expedited the preliminary study phase required to engage
    the Corps in the Channel Deepening Project, a Federal navigation
    improvement project. In anticipation of a favorable Chief of Engineers'
    Report, Congress authorized the Channel Deepening Project in The Water
    Resources Development Act of 2000. The Corps of Engineers approved the
    Feasibility Study on December 29, 2000, thereby enabling the Channel
    Deepening Project to proceed.
        In fiscal year 2004, the Port of Los Angeles requests that your
    Subcommittee include an appropriation of $35,000,000 for the Federal
    share of continued construction dredging of the Channel Deepening
    Project. The Corps of Engineers' has estimated the total project cost
    of approximately $194,000,000 \1\ with a Federal share of $57,400,000,
    and a local share of $136,600,000.
    ---------------------------------------------------------------------------
        \1\ Escalated through end of construction in fiscal year 2005, per
    OMB.
    ---------------------------------------------------------------------------
        We cannot over emphasize the critical importance of continuing
    construction of the Channel Deepening Project in fiscal year 2004. At
    -45 Mean Lower Low Water (MLLW), the Main Channel is too shallow to
    accommodate the new state-of-the-art container vessels designed to
    draft as much as -48 feet and hold containers than 6,000 TEUs. The
    Chief of Engineers' Report, issued in December 2000, concurred with the
    Feasibility Study's recommendation that the Corps dredge the Channel to
    at least -53 feet, including a modest allowance for varied tidal
    conditions and under-keel clearance. The project also includes dredging
    approximately 8.4 million cubic yards of sediment from the Turning
    Basin, the West and East Basins, and the East Basin Channel. Of the
    major container shipping lines that currently call at the Port of Los
    Angeles, five have vessels that draft -46 feet when fully laden.
    Consequently, they call with only partial loads to be able to safely
    navigate the Harbor's channels. While unavoidable, this makes for an
    inefficient shipping system and opens the door to cargo diversion to
    Vancouver, Canada or other non-U.S. West Coast ports.
        Simply, Mr. Chairman, there are no other ports on the West Coast of
    the United States with the current infrastructure capacity to serve
    these container ships in the Pacific Rim trade or to absorb the volume
    of container throughputs. These state-of-the-art container ships
    represent the new competitive requirements for international shipping
    efficiencies in this century. It is imperative that Congress
    appropriate the requested funding that will enable the Channel
    Deepening Project to continue, with full funding that will keep the
    project on schedule for completion in fiscal year 2005.
               continued funding of the los angeles harbor models
        Furthermore, the Port of Los Angeles also requests a total
    appropriation of $3,170,000 for the San Pedro Bay Models at the Corps
    of Engineers' Waterways Experiment Station (WES) at Vicksburg,
    Mississippi. This funding is critical for the Corps to maintain the Los
    Angeles Harbor Model studies and the Wave Gauge Program. Our request
    includes $170,000 for the maintenance of the physical model of the San
    Pedro Bay to maintain operational readiness for the continued study of
    navigation improvements at the Port, and $3,000,000 to upgrade the wave
    gauges, wave generators, and computer systems that are now
    technologically outdated and beyond their physical service life.
        The information derived from these study tools is critical to the
    validation of the numerical and physical models used for the design of
    ongoing projects under the 2020 Plan of the Port. For example, during
    the state-of-the-art design of the Pier 400 Project, the scientists and
    engineers at WES, the Port of Los Angeles and the Corps' Los Angeles
    District used eight separate, but related models, to site the land
    reclamation element of the project and its effect on tidal resonance on
    container ships at dock. As a result, maintenance of the hydraulic and
    physical models at WES, and their prototype data acquisition
    facilities, continue to be an essential resource for the Corps of
    Engineers and the Port of Los Angeles.
        the economic impact of the 2020 infrastructure development plan
        As we have testified before, cargo throughput for the Port of Los
    Angeles has a tremendous impact on our national economy. This fact
    cannot be over emphasized. The ability of the Port to meet the
    spiraling demands of the phenomenal growth in global trade through its
    facilities is directly dependent upon the construction of sufficiently
    deep navigation channels that will accommodate the largest state-of-
    the-art deep-draft cargo container ships that are already in service.
    These new ships provide greater efficiencies in cargo transportation,
    thereby offering American consumers lower prices on imported goods and
    exports that are more competitive from the United States to foreign
    markets. However, for American seaports to remain abreast of these
    industry trends, we must immediately make the necessary infrastructure
    improvements that will enable the Port to participate in this rapidly
    changing global trading arena.
        The Channel Deepening Project is clearly a commercial navigation
    project of national economic significance and one that will yield
    exponential economic returns to the United States--and the Southern
    California region--well into the future. The national economic benefits
    are evidenced by the creation of more than one million permanent well-
    paying jobs across the United States; more than $1 billion in wages and
    salaries; and, local, State and Federal sales and income tax revenues,
    including increased U.S. Customs Service revenues, deposited into the
    Federal treasury. The return on the Federal investment is real and
    quantifiable, and we expect it to surpass the cost-benefit ratio as
    determined by the Corps of Engineers' project Feasibility Study many
    times over. The Federal investment in the Channel Deepening Project
    will ensure that the Port of Los Angeles, the Nation's largest
    container seaport, remains at the forefront of the new global trade
    network well into the 21st century.
                                   in summary
        Mr. Chairman, the Port of Los Angeles respectfully urges your
    Subcommittee to include the following appropriations earmarks in the
    fiscal year 2004 Budget to support the U.S. Army Corps of Engineers
    navigation construction projects on behalf of the Port of Los Angeles:
      --$35,000,000 to continue construction dredging of the Channel
            Deepening Project;
      --$170,000 for ongoing maintenance of the Los Angeles Harbor Model at
            WES; and,
      --$3,000,000 to upgrade wave gauge and generators of the Los Angeles
            Harbor Model at WES.
        Thank you, Chairman Domenici, for the opportunity to submit this
    testimony in support of continued Congressional support of the Channel
    Deepening Project and other important Federal navigation projects at
    the Port of Los Angeles. The Port has long valued the support of your
    Subcommittee and its appreciation of the significant role the port
    industry plays in maintaining the economic vitality of the United
    States, and, in particular, the role of the Port of Los Angeles in
    contributing to this country's economic vigor and national security.
                                     ______

     Prepared Statement of the Louisiana Governor's Task Force on Maritime
                                    Industry
        As Chairman of the Louisiana Governors Task Force on Maritime
    Industry, I hereby submit testimony to the Senate Subcommittee on
    Energy and Water Development on behalf of the ports on the lower
    Mississippi River, the J. Bennett Johnston Waterway and the Calcasieu
    River waterway and the maritime interests related thereto of the State
    of Louisiana relative to Congressional appropriations for fiscal year
    2004.
        The U.S. Army Corps of Engineers reports that in 2001 a total of
    420.3 million tons of foreign and domestic waterborne commerce moved
    through the consolidated deepwater ports of Louisiana situated on the
    lower Mississippi River between Baton Rouge and the Gulf of Mexico.
    Deepening of this 232-mile stretch of the River to 45 feet has been a
    major factor in tonnage growth at these ports. Due in large part to the
    efforts of Congress and the New Orleans District of the Corps,
    Louisiana's ports and the domestic markets they serve can compete more
    productively and effectively in the global marketplace. Ninety-one
    percent of America's foreign merchandise trade by volume (two-thirds by
    value) moves in ships, and 20.8 percent of the Nation's foreign
    waterborne commerce passes through Louisiana's ports. Given the role
    foreign trade plays in sustaining our Nation's growth, maintaining the
    levels of productivity and competitiveness of Louisiana's ports is
    essential to our Nation's continued economic well-being.
        In terms of transportation services and global access, Louisiana
    ports enjoy a distinct competitive advantage. Hundreds of barge lines
    accommodate America's waterborne commerce on the lower Mississippi
    River. The high level of barge traffic on the river is indicated by the
    passage of more than 222,500 barges through the Port of New Orleans
    annually. In 2001, 2,020 ocean-going vessels operated by more than 100
    steamship lines serving U.S. trade with more than 150 countries called
    at the Port of New Orleans. The Port's trading partners include: Latin
    America (40.3 percent); Asia (25.3 percent); Europe (23.6 percent);
    Africa (9.4 percent) and North America (1.5 percent). During the same
    year, 5,621 vessels called at Louisiana's lower Mississippi River
    deepwater ports.
        The foreign markets of Louisiana's lower Mississippi River ports
    are worldwide; however, their primary domestic market is mid-America.
    This heartland region currently produces 60 percent of the Nation's
    agricultural products, one half of all of its manufactured goods and 90
    percent of its machinery and transportation equipment.
        The considerable transportation assets of Louisiana's lower
    Mississippi River ports enable mid-America's farms and industries to
    play a vital role in the international commerce of this Nation. In
    2001, the region's ports and port facilities handled 232.5 million tons
    of foreign waterborne commerce. Valued at $38.4 billion, this cargo
    accounted for 18.1 percent of the Nation's international waterborne
    trade and 26.7 percent of all U.S. exports. Bulk cargo, primarily
    consisting of tremendous grain and animal feed exports and petroleum
    imports, made up 91.2 percent of this volume. Approximately 49 million
    tons of grain from 17 States, representing 58.5 percent of all U.S.
    grain exports, accessed the world market via the 10 grain elevators and
    midstream transfer capabilities on the lower Mississippi River. This
    same port complex received 94 million short tons of petroleum and
    petroleum products, 15.9 percent of U.S. waterborne imports of
    petroleum products.
        In 2001, public and private facilities located within the
    jurisdiction of the Board of Commissioners of the Port of New Orleans,
    the fourth largest port in the United States, handled a total of 85.6
    million tons of international and domestic cargo. International general
    cargo totaled 8.9 million tons. Although statistically dwarfed by bulk
    cargo volumes, the movement of general cargo is of special significance
    to the local economy because it produces greater benefits. On a per ton
    basis, general cargo generates spending within the community more than
    three times higher than bulk cargo. Major general cargo commodities
    handled at the Port include: iron and steel products; coffee; forest
    products; copper; aluminum products; and natural rubber.
        Fostering the continued growth of lower Mississippi River ports is
    necessary to maintain the competitiveness of our Nation's exports in
    the global marketplace and, consequently, the health of the Nation's
    economy. Assuring deep-water access to ports has been a priority of our
    trading partners around the world. Moreover, an evolving maritime
    industry seeking greater economies of scale continues to support
    construction of larger vessels with increased draft requirements.
    Because it facilitated the provision of deepwater port access, passage
    of the Water Resources Development Act of 1986, played a most
    significant role in assuring the competitiveness of ports on the lower
    Mississippi river and throughout the United States.
        By December 1994, the Corps completed dredging of the 45-foot
    channel from the Gulf of Mexico to Baton Rouge, LA (Mile 233 AHP).
    Mitigation features associated with the first phase of the channel-
    deepening project in the vicinity of Southwest Pass of the river,
    accomplished in 1988, are nearing completion. We urge the continued
    funding for this work in fiscal year 2004 to complete construction of
    improvements to the Belle Chasse water treatment plant. This will
    complete the approximate $15 million in payments to the State of
    Louisiana for construction of a pipeline and pumping stations to
    deliver potable fresh water to communities affected by saltwater
    intrusion. We further urge that the Corps be provided funding to
    proceed with design studies for Phase III, which will allow deepening
    of the river to the 55-foot authorized depth.
        Along with the Port of New Orleans, the Port of South Louisiana,
    the Nation's largest port with 212.6 million tons of foreign and
    domestic cargo in 2001, and the Port of Baton Rouge, the Nation's tenth
    largest port with 61.4 million tons of foreign and domestic cargo in
    2001, and other lower Mississippi River ports are dependent upon timely
    and adequate dredging of Southwest Pass to provide deep draft access to
    the Gulf of Mexico. The President's fiscal year 2004 Budget is
    $56,206,000 under O&M General. We, however, strongly recommend that the
    Corps be funded $64,566,000 to repair and construct foreshore dikes,
    lateral dikes and jetties.
        Maintenance of adequate depths and channel widths in the
    Mississippi River Gulf Outlet Channel (MRGO) is also of great concern.
    This channel provides deep draft access to the Port of New Orleans
    principal container terminals and generates an annual economic impact
    of nearly $800 million. In 2001, 418 general cargo vessels calling on
    the Port's MRGO terminals accounted for 31.2 percent of the general
    cargo tonnage handled over public facilities at the Port and 68.7
    percent of Louisiana's containerized cargo.
        Because of the MRGO's demonstrated vulnerability to coastal storm
    activity, annual channel maintenance dredging and bank stabilization
    are essential to assure unimpeded vessel operations. The President's
    fiscal year 2004 Budget is $13,485,000 under O&M General. We, however,
    strongly recommend that the Corps be funded $34,325,000 for maintenance
    dredging and bank stabilization.
        We recognize the need for the Corps to evaluate the feasibility of
    continuing the maintenance of a deep draft channel in the MRGO because
    of increased maintenance costs and environmental impacts.
    Unfortunately, the President's fiscal year 2004 Budget does not include
    funding for such a study. We, however, strongly recommend that the
    Corps be funded $813,000 to complete the MRGO Reevaluation Study. It is
    important to note that although the Port of New Orleans plans to
    relocate much of its container terminal capacity to the Mississippi
    River, a determination to discontinue maintenance of the MRGO's deep
    draft channel must be preceded by completion of the IHNC Lock
    replacement project to assure continued deep draft access to the many
    businesses serviced by the MRGO.
        The Inner Harbor Navigation Canal (IHNC) Lock is a critical link in
    the U.S. Inland Waterway System as well as the Gulf Intracoastal
    Waterway (GIWW), and provides a connection between the Port of New
    Orleans Mississippi River and IHNC terminals. In 1998, the Corps
    approved a plan for replacement of this obsolete facility. The Corps
    estimates that the lock replacement project will have a cost-benefit
    ratio of 2.1 to one and will provide $110 million annually in
    transportation cost savings. To minimize adverse impacts to adjacent
    neighborhoods, the project includes a $37 million Community Impact
    Mitigation Program. The President's fiscal year 2004 Budget of
    $7,000,000 for the IHNC Lock Replacement will pay for engineering and
    design work, construction, and the mitigation program, all on a delayed
    basis. We, therefore, strongly recommend that the Corps be funded
    $20,000,000 to complete demolition on the east side, and advance
    engineering and design, levee contracts, and mitigation measures.
        Operation and maintenance of the Mississippi River Outlets at
    Venice, LA are essential to providing safe offshore support access to
    energy-related industries. In 2001, these channels accommodated cargo
    movements exceeding 3 million tons. In addition to routine traffic,
    shallow draft vessels use Baptiste Collette Bayou as an alternate route
    between the MRGO, GIWW and the Mississippi River. The President's
    fiscal year 2004 Budget is $1,841,000 under O&M General. We, however,
    strongly recommend that the Corps be funded $5,116,000 to perform
    critical maintenance dredging.
        More than 74.9 million tons of cargo transverse the GIWW in the New
    Orleans District annually. The President's fiscal year 2004 Budget is
    $19,418,000 under O&M General. We, however, strongly recommend that the
    Corps be funded $29,028,000 to perform critical maintenance at the
    navigation locks.
        The President's fiscal year 2004 Budget for the Bayou Sorrel Lock,
    LA project is $707,000 in GI funds. To assure the efficient flow of
    commerce on the GIWW, we urge that the Corps be funded $707,000 to
    advance the completion of the pre-engineering design for replacement of
    the Bayou Sorrel Lock, Morgan City-to-Port Allen alternate route. We
    further recommend that the Corps be funded $800,000 in GI funds to
    advance the completion of the feasibility phase of the study to replace
    Calcasieu Lock on the GIWW by 3 years.
        The Port of Lake Charles, Louisiana, is served by the Calcasieu
    River, which often does not meet project depth and width requirements.
    This Port is one of Louisiana's major deep-water ports, benefitting the
    economy of the State and the Nation. In 2001, the Port handled 37.1
    million tons of import cargo and 17.3 million tons of export cargo. The
    Port and private facilities along this waterway provide thousands of
    jobs for the Lake Charles area. In 2001, 1,284 ships and 7,893 barges
    used the Calcasieu River waterway. The Port area's growth and continued
    success depends on the provision of a reliable and safe channel at full
    project dimensions. The President's fiscal year 2004 Budget is
    $12,064,000 under O&M General. We, however, strongly recommend that the
    Corps be funded $20,559,000 to construct revetment at Devil's Elbow.
        One additional project warrants consideration. The J. Bennett
    Johnston Waterway, Mississippi River to Shreveport, LA Project provides
    236 miles of navigation improvements, 225 miles of channel
    stabilization works and various recreational facilities. Project
    completion will stimulate economic growth along the Red River Basin and
    increase cargo flows through the deep draft ports on the lower
    Mississippi River. The President's fiscal year 2004 Budget is
    $13,700,000 (Construction General) and $12,013,000 (O&M General). We,
    however, strongly recommend that the Corps be funded $29,000,000
    (Construction General) and $19,900,000 (O&M, General) to complete work
    already underway.
        The need and impetus to reduce the Federal budget is certainly
    acknowledged; however, reduced funding on any of the above projects
    will result in decreased maintenance levels which will escalate
    deterioration and, ultimately, prevent them from functioning at their
    full authorized purpose. Reduction in the serviceability of these
    projects will cause severe economic impacts not only to this region,
    but to the Nation as a whole that will far outweigh savings from
    reduced maintenance expenditures. Therefore, we reiterate our strong
    recommendation that the above projects be funded to their full
    capability.
        1. Mississippi River Ship Channel, Gulf to Baton Rouge, LA.--
    Recommend the Corps be funded $196,000 (Construction General) to
    perform required work on the saltwater intrusion Phase 1 mitigation
    plan.
        2. Mississippi River, Baton Rouge to the Gulf, Maintenance
    Dredging.--The President's Fiscal Year 2004 Budget is $56,206,000 under
    O&M General. Recommend that the Corps be funded $64,566,000 to
    construct foreshore rock dike, soft dike at deep draft crossings, and
    to repair Southwest Pass pile dike and tie-in.
        3. Mississippi River Gulf Outlet (MRGO), LA, Maintenance
    Dredging.--The President's Fiscal Year 2004 Budget is $13,485,000 under
    O&M General. Recommend that the Corps be funded $34,325,000 for
    maintenance dredging and bank stabilization.
        4. Inner Harbor Navigation Canal (IHNC) Lock, LA.--The President's
    Fiscal Year 2004 Budget is $7,000,000 in Construction General funds.
    Recommend that the Corps be funded $20,000,000 to continue construction
    and mitigation for the IHNC Lock replacement.
        5. Mississippi River Outlets at Venice, LA.--The President's Fiscal
    Year 2004 Budget is $1,841,000 under O&M General. Recommend that the
    Corps be funded $5,116,000 to perform critical maintenance dredging and
    to repair jetties.
        6. Bayou Sorrel Lock, LA.--The President's Fiscal Year 2004 Budget
    is $707,000 under General Investigation Studies. Recommend that the
    Corps be funded $707,000 to advance pre-engineering design for the
    replacement of Bayou Sorrel Lock on the Gulf Intracoastal Waterway
    (GIWW), Morgan City-to-Port Allen alternate route.
        7. Gulf Intracoastal Waterway, LA and TX.--The President's Fiscal
    Year 2004 Budget is $19,418,000 under O&M General. Recommend that the
    Corps be funded $29,028,000 to perform critical maintenance at the
    navigation locks.
        8. Calcasieu Lock, LA.--The President's Fiscal Year 2004 Budget is
    $100,000 in GI funds. Recommend that the Corps be funded $800,000 to
    advance the feasibility phase of the study to replace Calcasieu Lock on
    the GIWW.
        9. Calcasieu River and Pass, LA.--The President's Fiscal Year 2004
    Budget is $12,064,000 under O&M General. Recommend that the Corps be
    funded $20,559,000 to construct revetment at Devil's Elbow, perform
    critical dredging and maintenance of disposal area.
        10. MRGO Reevaluation Study, LA.--The President's Fiscal Year 2004
    Budget has no funding for this study. Recommend that the Corps be
    funded $813,000 (Construction General). Funds are needed to complete a
    study to determine the advisability of maintaining the 36-foot depth of
    the MRGO.
        11. J. Bennett Johnston Waterway, Mississippi River to Shreveport,
    LA.--The President's Fiscal Year 2004 Budget is $13,700,000
    (Construction General) and $12,013,000 (O&M General). Recommend that
    the Corps be funded $29,000,000 (Construction General) and $19.9
    million (O&M, General) to complete work already underway.
                                     ______

                 Prepared Statement of the Port of New Orleans
        The Port of New Orleans is located at the terminus of the most
    extensively developed waterway system in the world, the 14,500 mile
    inland waterway system of the United States. The Port, via the
    Mississippi River and the Mississippi River Gulf Outlet, serves as the
    gateway between America's heartland and the global marketplace.
        The Louisiana Governor's Task Force on the Maritime Industry has
    submitted a statement in support of fiscal year 2004 Congressional
    appropriations for the U.S. Army Corps of Engineers. This statement
    addresses Corps activities on the Lower Mississippi River and
    connecting waterways, the J. Bennett Johnston Waterway, and the
    Calcasieu River Waterway. We endorse the statement of the Governor's
    Task Force and the funding levels recommended therein.
        We greatly appreciate the outstanding support and cooperation
    received over many years from the subcommittee, and look forward to
    working with you on these vitally important projects.
                                     ______

          Prepared Statement of the Steamship Association of Louisiana
        I am President of the Steamship Association of Louisiana (SALA).
    Our Association represents ship owners, operators, and agents who
    handle the majority of the 7,000 ocean-going vessels that call
    Louisiana's deep-water ports each year. SALA is dedicated to the safe,
    efficient movement of maritime commerce through the State's deep-water
    ports. We endorse the testimony of Mr. Donald T. Bollinger, Chairman of
    the Governor's Task Force on Maritime Industry.
        Channel stabilization and maintenance dredging in Southwest Pass
    (SWP) are critical to maintaining project draft. Project draft ensures
    the Mississippi River's deep-water ports will continue to handle the
    country's foreign and domestic waterborne commerce in the most cost-
    effective way possible.
        For years we have urged this Committee to provide funds to maintain
    project draft at SWP. You have responded, and your wisdom has
    benefitted the entire American heartland served by the Mississippi
    River system. SWP was greatly restricted throughout the 1970's. From
    1970 to 1975, the channel was at less than project draft 46 percent of
    the time. In 1973 and 1974, the channel was below the 40-foot project
    draft 70 percent of the time. During some periods, drafts were limited
    to 31 feet. Fortunately, those conditions have not recurred because of
    a combination of factors: Your help, and the constant vigilance of the
    Pilots, the Corps, and the maritime community. The years 1990 through
    2002 show a tremendous improvement in channel stability. The funding
    you provided was money well spent. The repairs to the jetties and
    dikes, and the Corps' ability to rapidly respond to shoaling, have been
    instrumental in maintaining project dimensions. However, the lack of
    available hopper dredges has, at times, threatened the integrity of the
    channel.
        The Pilots have taken advantage of tidal flows and other factors to
    recommend the maximum draft possible consistent with safe navigation.
    This results in additional sales and increased competitiveness for U.S.
    products on the world market. Industry's partnership with you has kept
    Mississippi River ports competitive and attractive to vessels. An
    additional 12 inches of draft to a large vessel with a loading capacity
    of 250 metric tons per inch is an added 3,000 tons of cargo. As of this
    writing, freight rates for grain moving from the Mississippi River to
    the Far East were $24 per metric ton before world events increased them
    to $30 per ton as this letter is written. Using $24 per ton, each foot
    of draft represents an additional $72,000 in vessel revenue, or
    $360,000 for the five additional feet over the old 40-foot project
    draft that the new channel provides.
        The funds we request for maintenance dredging ($64.6 million, $8.4
    million over the President's request) are essential for the Corps to
    maintain a reliable channel and respond rapidly to potential problems.
    This builds the confidence of the bulk trade in a reliable Mississippi
    River draft, which is critically important. Much of Louisiana's bulk
    trade is exported agricultural products and imported petroleum
    products. The export commodities are neither captive to Louisiana nor
    the United States if they can be shipped from competing countries at a
    consistently lower cost.
        The deeper the channel, the more important channel stabilization
    becomes. Adequate channel stabilization work minimizes the maintenance
    cost of the deeper channel--a cost-effective investment. The faster the
    project is stabilized, the faster and greater the benefits of reduced
    O&M costs will be realized. Also, we recommend that the Corps conduct
    research on prototype dredging techniques.
        Funds are also needed for dustpan dredges to work the crossings
    above New Orleans. These crossings control the draft to the Ports of
    South Louisiana and Baton Rouge, home to eight of our ten major grain
    elevators plus many mid-stream and other bulk cargo facilities. This
    area caters to the bulk trade and must have a stable channel depth
    consistent with the depth at Southwest Pass. Only two dustpan dredges
    in the world are available to maintain the deep-draft crossings between
    New Orleans and Baton Rouge. There are times when a high river is
    followed by a rapid drop in the river's stage. In such cases, the
    dustpan dredges may not be available, or both dredges may not be
    capable of restoring the 12 crossings within a reasonable time. When
    this happens, hopper dredges are used to assist in the work.
        For all of the above reasons, we request full funding for the
    mitigation features of the O&M General, 45-foot Mississippi River
    project. We also request that the New Orleans District receive an
    additional $32.1 million to address the shortfall carried forward from
    fiscal year 2002. These funds were not provided by Congress in an
    fiscal year 2002 supplemental appropriation as requested by the Corps
    and are seriously impacting needed channel maintenance on the
    Mississippi River, the Mississippi River-Gulf Outlet (MR-GO) and the
    Calcasieu Ship Channel in fiscal year 2003. To ``catch up'' with the
    dredging needs on these channels, we respectfully request this
    additional funding in fiscal year 2004 if it is not provided in a
    fiscal year 2003 supplemental appropriation.
        We also support Phase III of the Mississippi River channel
    deepening project and urge that the Corps be funded to proceed with
    design studies for the 55-foot channel, Baton Rouge to the Gulf of
    Mexico.
        The MR-GO is also a viable channel for the State of Louisiana. The
    funds you provided in past fiscal years have allowed the Corps to
    improve the channel considerably. However, the channel width has
    remained limited primarily because of erosion. For safety reasons in
    this narrow channel, one-way traffic restrictions apply to vessels with
    a draft of 30 feet or more, causing delays to the tightly-scheduled
    container traffic using the MR-GO. These specialty vessels serving the
    Port's facilities are becoming larger. The highest wages under the
    International Longshoremen's Association's contract ($27 per straight-
    time hour) is paid for work at the MR-GO container facilities. Anything
    that threatens the MR-GO jeopardizes these high-paying jobs, which are
    held mostly by minority workers.
        To improve safety on the MR-GO and protect Louisiana's container
    trade (and the well-paying, minority employment it produces), we
    request that the Corps be funded at $34.3 million for the MR-GO in
    fiscal year 2004. This will allow annual maintenance dredging, north
    and south bank stabilization, and jetty maintenance, which is essential
    to provide the stability needed for vessel and port operations.
        With facilities located on both the MR-GO and the Mississippi
    River, an adequate route between the two is essential for efficient
    transit between these facilities. The shortest route is the inadequate,
    antiquated Inner Harbor Navigation Canal (IHNC) Lock built in the
    1920's with a width of 75 feet and limited depth of 30 feet. Its
    maximum capacity has long been exceeded. The average waiting time for
    passage through the Lock has increased from 8\1/2\ hours in 1985 to
    about 12 hours at present; however, we understand that waiting time can
    be more than a day in some instances. A much larger ship lock is
    necessary to accommodate today's traffic.
        The replacement project for the IHNC Lock is important to the ports
    on the lower Mississippi River and to the Nation's commerce since it is
    on the corridor for east/west barge traffic. Without full funding, the
    project will be delayed and increase the overall cost of the project.
    We urge Congress to provide the Corps' full fiscal year 2004 capability
    ($20 million) for this important project to insure its completion.
    Delays are unthinkable since the new lock is long overdue.
        The Port of Lake Charles, Louisiana, is served by the Calcasieu
    River, which is often below project depth and width. This is another of
    Louisiana's major deep-water ports that benefits the economy of the
    State and the Nation. The public and private facilities along this
    waterway provide thousands of jobs for the Lake Charles area. This
    channel, because of its project deficiencies, requires one-way traffic
    for many ships, causing delays that disrupt cargo operations. This is
    costly and inefficient for industry. The Port area's growth and
    continued success depends on a reliable and safe channel that should be
    at full project. We request funding to the full capability of the Corps
    ($20.6 million) to maintain this channel at its project dimensions and
    to construct needed revetments at Devil's Elbow.
        The J. Bennett Johnston Waterway, Mississippi River to Shreveport,
    Louisiana, Project is directly related to our deep-water ports. The
    continuation and completion of this work will stimulate the economy all
    along the Red River Basin with jobs and additional international trade.
    This increased trade will help the Port of Shreveport and the ports on
    the lower Mississippi River, providing needed growth and benefitting
    the States of Louisiana, Texas, Oklahoma, and Arkansas, which are
    served through the Shreveport distribution center. Therefore, we
    strongly recommend that the Corps be funded to full capability for
    fiscal year 2004 at $29 million for Construction General and $19.9
    million for O&M General to complete work already underway.
                                     ______

               Prepared Statement of the Port of South Louisiana
        The Port of South Louisiana very much appreciates being given the
    opportunity to submit this statement and supportive material to signify
    its endorsement of the statement of Mr. Donald T. Bollinger, Chairman
    of the Louisiana Governor's Task Force on Maritime Industry.
        The Port of South Louisiana is comprised of nearly 54 miles of
    Mississippi River north of New Orleans and south of Baton Rouge, with
    more than 50 private and public docks and wharves. The Port of South
    Louisiana is the largest tonnage port in the United States and third
    largest in the world, handling more than 260 million short tons of
    cargo during 2002. Of this total tonnage, more than 133 million tons
    are shipped in international trade by deep water vessel and 127 million
    tons are shipped in domestic trade by vessels and barges. Each year
    more than 100,000 barges transport cargo at the Port of South Louisiana
    and more than 4,300 ships call at the public and private wharves of our
    Port.
        A recent study by Dr. Tim Ryan of the University of New Orleans
    indicates that nearly 20 percent of the domestic gross product of the
    State of Louisiana is dependent upon the maritime industry and one of
    eight jobs is created from the economic activity of the maritime
    industry. Attached you will find statistics which have been developed
    from the records of the Port of South Louisiana.
        The Port of South Louisiana strongly urges the Congress to fund all
    of the following projects.
      --Mississippi River Ship Channel, Gulf to Baton Rouge, LA;
      --Mississippi River, Baton Rouge to the Gulf, Maintenance Dredging;
      --Mississippi River-Gulf Outlet (MR-GO), LA., Maintenance Dredging;
      --Inner Harbor Navigation Canal (IHNC) Lock, LA;
      --Mississippi River Outlets at Venice, LA;
      --Bayou Sorrel Lock, LA;
      --Gulf Intracoastal Waterway, LA and TX;
      --Calcasieu Lock, LA;
      --Calcasieu River & Pass, LA;
      --Mississippi River-Gulf Outlet (MR-GO) Reevaluation Study, LA;
      --J. Bennett Johnston Waterway, Mississippi River to Shreveport.
        The Port of South Louisiana strongly believes that the funding and
    completion of the above maritime projects will enhance the ability of
    the ports in the region to be competitive in the global economy and
    will enhance the ability of domestic industry and agriculture to
    compete in the export of its products.
                                     ______

             Prepared Statement of the Port of Greater Baton Rouge
        Maintaining open navigable channels for the Mississippi River and
    its tributaries is vital to the Nation's commerce and national
    interest. Therefore, the Port of Greater Baton Rouge respectfully
    requests that you and your committee give favorable consideration to
    the following U.S. Corps of Engineers projects:
        1. Mississippi River Ship Channel--Gulf to Baton Rouge, Louisiana
    (Construction General).--The Port of Greater Baton Rouge supports full
    funding of $196,000 in fiscal year 2004 to the U.S. Corps of Engineers
    General Construction Budget. These funds will provide for the required
    work on the saltwater intrusion mitigation plan and the Phase I design
    studies for the 55-foot channel. Both projects are important to the
    future success of the Port of Greater Baton Rouge.
        2. Mississippi River--Baton Rouge to the Gulf--Maintenance
    Dredging.--The President's Fiscal Year 2004 Budget is $56,206,000 under
    O&M General. The Port of Greater Baton Rouge recommends that the Corps
    be funded $64,566,000 to construct foreshore rock dike, soft dike at
    deep draft crossings, and to repair Southwest Pass pile dike and tie-
    in.
        3. Mississippi River--Gulf Outlet (MRGO), LA., Maintenance
    Dredging.--The President's Fiscal Year 2004 Budget is $13,485,000 under
    O&M General. The Port of Greater Baton Rouge recommends that the Corps
    be funded $34,325,000 for maintenance dredging and bank stabilization.
        4. Inner Harbor Navigation Canal (IHNC) Lock, LA.--The President's
    Fiscal Year 2004 Budget is $7,000,000 in Construction General Funds.
    The Port of Greater Baton Rouge recommends the Corps be funded
    $20,000,000 to continue construction and mitigation for the IHNC Lock
    replacement.
        5. Mississippi River Outlets at Venice, LA.--The President's Fiscal
    Year 2004 Budget is $1,841,000 under O&M General. The Port of Greater
    Baton Rouge recommends that the Corps be funded $5,116,000 to perform
    critical maintenance dredging and to repair jetties.
        6. Bayou Sorrel, Lock, LA.--The President's Fiscal Year 2004 Budget
    is $707,000 under General Investigation Studies. The Port of Greater
    Baton Rouge recommends that the Corps be funded $707,000 to advance
    pre-engineering design for the replacement of Bayou Sorrel Lock on the
    Gulf Intracoastal Waterway (GIWW), Morgan City-to-Port Allen alternate
    route.
        7. Gulf Intracoastal Waterway, LA and TX.--The President's Fiscal
    Year 2004 Budget is $19,418,000 under O&M General. The Port of Greater
    Baton Rouge recommends that the Corps be funded $29,028,000 to perform
    critical maintenance at the navigation locks.
        8. MRGO Reevaluation Study, LA.--The President's Fiscal Year 2004
    Budget has no funding for this study. The Port of Greater Baton Rouge
    recommends that the Corps be funded $813,000 (Construction General).
    Funds are needed to complete a study to determine the advisability of
    maintaining the 36-foot depth of the MRGO.
        9. J. Bennett Johnston Waterway, Mississippi River to Shreveport,
    LA.--The President's Fiscal Year 2004 Budget is $13,700,000
    (Construction General) and $12,013,000 (O&M General). The Port of
    Greater Baton Rouge recommends that the Corps be funded $29,000,000
    (Construction General) and $19.9 million (O&M, General) to complete
    work already underway.
        As stated in previous correspondence, these projects are vital not
    only to the Port of Greater Baton Rouge but to the entire lower
    Mississippi River and the Nation. They are projects of critical
    national significance and have a tremendous impact on shipping for both
    ocean-going vessels and barge traffic. The great Mississippi River is
    the premier national waterway, providing accessibility to and from
    foreign countries for the transportation of goods and services used by
    countless number of U.S. companies and individual citizens. The channel
    must be properly designed and maintained for the benefit of all ports
    and commerce.
        We also earnestly request your support for funding of the other
    projects included in March 2003 testimony prepared and submitted by Mr.
    Donald T. Bollinger. A summary of Mr. Bollinger's statement is
    attached. Our waterway infrastructure must be properly maintained if we
    are to increase trade and have the confidence of our trading partners
    around the world. Your cooperation and support of these important
    projects for the Mississippi River are greatly appreciated.
                                     ______

      Prepared Statement of the Lake Charles Harbor and Terminal District
        The Lake Charles Harbor and Terminal District (Port of Lake
    Charles, Louisiana) respectfully requests that the U.S. Senate
    Appropriations Committee and Subcommittee on Energy and Water
    Development afford favorable consideration to proposed U.S. Army Corps
    of Engineers projects affecting the Calcasieu River Waterway, Calcasieu
    Lock and Gulf Intracoastal Waterway. We specifically endorse the
    appropriateness and necessity for increased funding levels as advocated
    by testimony offered by Mr. Donald T. Bollinger, Chairman of the
    Governor of Louisiana's Maritime Industry Task Force.
        The Calcasieu River Waterway, including its nexus with the Gulf
    Intracoastal Waterway and Calcasieu Lock, is deemed ``military
    essential'' and further supports two refineries, a major portion of the
    Nation's liquefied natural gas imports, chemical industries, USDA
    programs, and is a major economic engine for the region.
        Your support of these essential projects toward maintaining our
    contribution to the Marine Transportation System (MTS) infrastructure
    will well serve regional and National interests.
                                     ______

    Prepared Statement of the Associated Branch Pilots, Port of New Orleans
        The Associated Branch Pilots is an Association of Pilots that have
    been guiding oceangoing vessels into the entrances of the Mississippi
    River system for over 125 years. We are called Bar Pilots because we
    guide the ships past the constantly shifting and shoaling sand bars in
    the area.
        Southwest Pass of the Mississippi River is the main entrance for
    deep draft oceangoing vessels entering the Lower Mississippi River
    System. It is the shallowest stretch of the Lower Mississippi River
    System and the area that requires the greatest effort by the Corps of
    Engineers to maintain project depth.
        In 2002, the Associated Branch Pilots made 10,850 transits on
    oceangoing vessels through Southwest Pass. Of these ships, 3,444 were
    of 50,000 deadweight tons or greater and 686 had a draft in excess of
    40 feet.
        This number of heavily laden vessels calling on the Lower
    Mississippi River System is a result of having a channel with a depth
    of 45 feet.
        This first phase has proven to be extremely well designed and well
    maintained by the fact that the maximum draft recommended by my
    Association for vessels using Southwest Pass has been 45 feet or
    greater, except for periods of extremely high water that caused
    shoaling that overwhelmed the dredging efforts. This is in stark
    contrast to the late 1970's and early 1980's when we often had to
    recommend drafts less than the project depth due to shoaling.
        To the world shipping community, this means that calling at ports
    on the Mississippi River system will be more profitable because larger
    ships can enter and carry greater amounts of cargo.
        This is beneficial to the entire United States because it makes the
    large quantities of petroleum, agricultural, and manufactured products
    shipped from the Mississippi Valley more desirable due to increased
    profitability.
        I would also like to comment briefly on the East-West navigation
    channels near Venice, Louisiana. Tiger Pass and Baptiste Collette
    provide a shorter, more direct route to Breton Sound and the Gulf of
    Mexico for offshore supply boats and small tugs and barges. These
    channels not only represent a savings in time and money for these
    vessels, but reduce the traffic in the main shipping channel, the
    Mississippi River and its passes, which is one of the most congested
    waterways in the country.
        The dredging and maintaining of South Pass would contribute to the
    safety of the overall waterway.
        The Associated Branch Pilots also pilot vessels in the Mississippi
    River Gulf Outlet, a man-made tidewater channel 75 miles long,
    stretching from the Gulf of Mexico to an intersection of the
    Intercoastal Waterway in New Orleans.
        This channel leads to the Main Container Terminals for the Port of
    New Orleans, the Roll On, Roll Off Terminal, the Port of New Orleans
    Bulk Handling Plant, and additional General Cargo Docks. For the Port
    of New Orleans to remain competitive in the ever growing container
    trade, the continued maintenance of this channel is crucial. In 2002,
    719 ships called on the port using the Mississippi River Gulf Outlet.
        Much is being said pro and con concerning the Mississippi River
    Gulf Outlet. There is, admittedly, an erosion problem in the
    Mississippi River Gulf Outlet, but any curtailment of shipping traffic
    in the channel without regard to the long term effect upon the Port of
    New Orleans would be disastrous. I strongly support approval of funding
    for both the maintenance dredging/jetty repair project and the erosion/
    rip rap study for the Mississippi River Gulf Outlet.
        Funding of the Corps of Engineers' projects in the Lower
    Mississippi River System has proven to be money well spent. It has
    increased exports and imports that have benefited the entire United
    States. I urge your support of the funding requested to enable the
    Corps to continue to maintain and improve the most efficient and
    productive waterway system in the country.
                                     ______

       Prepared Statement of the Crescent River Port Pilots' Association
        I am President of the largest pilot association in the United
    States. The Crescent River Port Pilots furnish pilots for ships
    destined to the Port of Baton Rouge, Port of South Louisiana, Port of
    New Orleans, Port of St. Bernard, and the Port of Plaquemines.
        The Crescent River Port Pilots have piloted and shifted over 14,750
    ships during 2002. We pilot deep draft vessels on more than 100 miles
    on the lower Mississippi River and 35 miles on the Mississippi River
    Gulf Outlet.
        The lower end of our route on the Mississippi River has a shoaling
    problem starting with the high water season each year. The shoaling
    requires daily attention by the United States Army Corps of Engineers
    to maintain project depth.
        Heavy-laden vessel calls on the lower Mississippi River system as a
    direct result of the completion by the Corps of Engineers of the
    deepening of the channel from 40 feet to 45 feet.
        For several years now, we have had extraordinary success in keeping
    the river dredges to project depth. This success is a direct result of
    an experienced and vigilant Corps of Engineers that, through
    experience, is able to timely bid in dredges to avoid extra dredging
    cost by waiting too long to start maintenance dredging.
        Channel stability sends a positive message to the world's shipping
    community that schedule cargo for deep draft vessels months in advance
    is reliable. This makes the port call on the Mississippi River very
    profitable since the ships can lift greater tonnage.
        Keeping project depth is beneficial to 27 States that are directly
    tied to the Mississippi River Port Complex.
        Additionally, I would like to comment on the east and west
    navigation channels near Venice, Louisiana. Baptiste Collette and Tiger
    Pass provide a shorter and more direct route to Breton Sound and West
    Delta in the Gulf of Mexico for oil field support vessels.
        The Crescent River Port Pilots also pilot ships in the Mississippi
    River Gulf Outlet. A man-made channel approximately 75 miles long
    starting in Breton Sound in the Gulf of Mexico and ending in New
    Orleans where it intersects with the Intercoastal Waterway.
        The Mississippi River Gulf Outlet feeds the main container
    terminals in the Port of New Orleans. Additional docks, such as Bulk
    Terminal and general cargo facilities depend on this channel, which
    handled approximately 847 ship calls last year.
        The Mississippi River Gulf Outlet has been a controversial channel
    since its inception, but being an integral part of the Port of New
    Orleans, it would be a disaster if it is not kept at project width and
    depth. The Crescent River Pilots strongly support approval of funding
    for both the maintenance dredging, and jetty repair projects.
        Funding of the United States Army Corps of Engineers projects in
    the lower Mississippi River system which includes the Mississippi River
    Gulf Outlet, Tiger Pass, Baptiste Collette, and Southwest Pass has
    proven to be money well spent.
        I urge your support of the funding requested to allow the Corps of
    Engineers to continue to maintain and improve the most productive
    waterway system in the world.
        Mr. Chairman, thanks for allowing me the opportunity to submit my
    comments to your subcommittee.
                                     ______

     FISCAL YEAR 2004 CONGRESSIONAL APPROPRIATIONS FOR THE LOWER MISSISSIPPI
        RIVER AND CONNECTING WATERWAYS, J. BENNETT JOHNSTON WATERWAY AND
      CALCASIEU RIVER WATERWAY--PRESIDENT'S BUDGET REQUEST AND RECOMMENDED
                                 FUNDING LEVELS
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                President's     Recommended
                     Project                  Budget Request  Funding Levels
    ------------------------------------------------------------------------
    Mississippi River Ship Channel Gulf to               196             196
     Baton Rouge, LA (Construction General).
    Mississippi River, Baton Rouge to the             56,206          64,566
     Gulf, Maintenance Dredging, and
     Stabilization (O&M General)............
    Mississippi River--Gulf Outlet (MR-GO),           13,485          34,325
     LA (O&M General).......................
    Inner Harbor Navigation Canal Lock, LA             7,000          20,000
     (Construction General).................
    Mississippi River Outlets at Venice, LA            1,841           5,116
     (O&M General)..........................
    Bayou Sorrel Lock, LA (GI Funds)........             707             707
    Gulf Intracoastal Waterway, LA & TX (O&M          19,418          29,028
     General)...............................
    Calcasieu Lock, LA (GI Funds)...........             100             800
    Calcasieu River and Pass, LA (O&M                 12,064          20,559
     General)...............................
    MRGO Reevaluation Study, LA                            0             813
     (Construction General).................
    J. Bennett Johnston Waterway                      13,700          29,000
     (Construction General).................
    J. Bennett Johnston Waterway (O&M                 12,013          19,900
     General)...............................
                                             -------------------------------
          TOTAL.............................         136,730         225,010
    ------------------------------------------------------------------------

              Prepared Statement of the City of Flagstaff, Arizona
        Chairman Domenici, Ranking Member Reid, and distinguished members
    of the subcommittee, thank you for allowing me to testify on behalf of
    the City of Flagstaff, Arizona in support of $4.5 million in the Army
    Corps of Engineers budget for the Rio de Flag flood control project in
    fiscal year 2004. I believe this project is critically important to the
    City, to northern Arizona, and, ultimately, to the Nation.
        As you may know, Mr. Chairman, with this subcommittee's help last
    year, Rio de Flag received $1 million to start construction on this
    important project. We are extremely grateful that the subcommittee
    boosted this project well above the President's request, and we would
    appreciate your continued support for this project in fiscal year 2004.
        Like many other projects under the Army Corps's jurisdiction, Rio
    de Flag received no funding for fiscal year 2004, although the Corps
    has expressed capability of $4.5 million to continue construction on
    the project. We are hopeful that the subcommittee will fund the Rio de
    Flag project at $4.5 million when drafting its bill in order to keep
    the project on an optimal schedule.
        Flooding along the Rio de Flag dates back as far as 1888. The Army
    Corps has identified a Federal interest in solving this long-standing
    flooding problem through the Rio de Flag, Flagstaff, Arizona--
    Feasibility Report and Environmental Impact Study (EIS). The
    recommended plan contained in this feasibility report was developed
    based on the following opportunities: (1) flood control and flood
    damage reduction; (2) environmental mitigation and enhancement; (3)
    water resource management; (4) public recreation; and (5) redevelopment
    opportunities. This plan will result in benefits to not only the local
    community, but to the region and the Nation.
        The feasibility study by the Corps of Engineers has revealed that a
    500-year flood could cause serious economic hardship to the City. In
    fact, a devastating 500-year flood could damage or destroy
    approximately 1,500 structures valued at more than $395 million.
    Similarly, a 100-year flood would cause an estimated $95 million in
    damages. In the event of a catastrophic flood, over half of Flagstaff's
    population of 57,000 would be directly impacted or affected.
        In addition, a wide range of residential, commercial, downtown
    business and tourism, and industrial properties are at risk. Damages
    could also occur to numerous historic structures and historic Route 66.
    The Burlington Northern & Santa Fe Railway (BNSF), one of the primary
    east-west corridors for rail freight, could be destroyed, as well as
    U.S. Interstate 40, one of the country's most important east-west
    interstate links. Additionally, a significant portion of Northern
    Arizona University (NAU) could incur catastrophic physical damages,
    disruptions, and closings. Public infrastructure (e.g., streets,
    bridges, water, and sewer facilities), and franchised utilities (e.g.,
    power and telecommunications) could be affected or destroyed.
    Transportation disruptions could make large areas of the City
    inaccessible for days.
        Mr. Chairman, the intense wildfires that have ripped through the
    West over the last several years have only exacerbated the flood
    potential and hazard in Flagstaff. An intense wildfire near Flagstaff
    could strip the soil of ground cover and vegetation, which could, in
    turn, increase runoff and pose an even greater threat of a catastrophic
    flood.
        In short, a large flood could cripple Flagstaff for years and even
    decades. That is why the City believes it is so important to ensure
    that this project remains on schedule and that the Corps is able to
    maximize its capability of $4.5 million in fiscal year 2004 for
    construction of the Rio de Flag flood control project.
        In the City's discussions with the Corps, both the central office
    in Washington and its Los Angeles District Office also believe that the
    Rio de Flag project is of the utmost importance and both offices
    believe the project should be placed high on the subcommittee's
    priority list. We are hopeful that the subcommittee will heed this
    advice and also place the project high on its priority list and fully
    fund the project at $4.5 million for fiscal year 2004.
        As you may know, project construction and implementation of Rio de
    Flag was authorized in the Water Resources Development Act (WRDA) of
    2000. The total project is estimated to cost $24,072,000 (October 1999
    price levels). The non-Federal share is currently $8,496,000 and the
    Federal share is currently $15,576,000. Final project costs must be
    adjusted based on Value Engineering and final design features. It is
    important to note that the City of Flagstaff has already committed more
    than $10 million to this project, which is well in excess of its cost
    share agreement and shows the City's commitment to completing this
    important project. Through this investment in the project, the City is
    prepared to enter into the Project Cooperation Agreement (PCA) with the
    Department of the Army.
        The City of Flagstaff, as the non-Federal sponsor, is responsible
    for all costs related to required Lands, Easements, Rights-of-Way,
    Relocations, and Disposals (LERRD's). The City has already secured the
    necessary property rights to begin construction in 2003. Implementation
    of the City's Downtown and Southside Redevelopment Initiatives
    ($100,000,000 in private funds) are entirely dependent on the success
    of the Rio de Flag project. The Rio de Flag project will also provide a
    critical missing bike/pedestrian connection under Route 66 and the BNSF
    Railroad to replace the existing hazardous at grade crossings.
        Both design and construction are divided into two phases. Phase I
    is currently scheduled to commence construction in July of 2003. Phase
    II of the project is scheduled to commence in April of 2004.
        Mr. Chairman, the Rio de Flag project is exactly the kind of
    project that was envisioned when the Corps was created because it will
    avert catastrophic floods, it will save lives and property, and it will
    promote economic growth. In short, this project is a win-win for the
    Federal Government, the City, and the surrounding communities.
        Furthermore, the amount of money invested in this project by the
    Federal Government--approximately $15 million--will be saved
    exponentially in costs to the Federal Government in the case of a large
    and catastrophic flood, which could be more than $395 million. It will
    also promote economic growth and redevelopment along areas that are
    currently underserved because of the flood potential.
        In conclusion, the Rio de Flag project should be considered a high
    priority for this subcommittee, and I encourage you to support full
    funding of $4.5 million for this project in the fiscal year 2004 Energy
    and Water Development Appropriations bill. Thank you in advance for
    your consideration.
                                     ______

      Prepared Statement of the Arkansas River Basin Interstate Committee
        Mr. Chairman and members of this distinguished Committee, my name
    is Lew Meibergen. I am Chairman of the Board of Johnston Enterprises
    headquartered in Enid, Oklahoma. It is my honor to serve as Chairman of
    the Arkansas River Basin Interstate Committee, members of which are
    appointed by the governors of the great States of Arkansas, Colorado,
    Kansas, Missouri, and Oklahoma.
        In these trying times of war on terrorism, homeland defense and
    needed economic recovery, our thanks go to each of you, your staff
    members and the Congress. Your efforts to protect our Nation's
    infrastructure and stimulate economic growth in a time of budget
    constraints are both needed and appreciated.
        Our Nation's growing dependence on others for energy, and the need
    to protect and improve our environment, make your efforts especially
    important. Greater use and development of one of our Nation's most
    important transportation modes--our navigable inland waterways--will
    help remedy these problems. At the same time, these fuel-efficient and
    cost-effective waterways keep us competitive in international markets.
        As Chairman of the Interstate Committee, I present this summary
    testimony as a compilation of the most important projects from each of
    the member States. Each of the States unanimously supports these
    projects without reservation. I request that the copies of each State's
    individual statement be made a part of the record, along with this
    testimony.
    Montgomery Point Lock and Dam
        The Interstate Committee continues to identify Montgomery Point
    Lock and Dam as our top priority. As completion of construction nears,
    we respectfully request a $15 million Congressional Add for a total
    budget of $35 million for fiscal year 2004 to ensure that this urgently
    needed lock and dam is in operation as soon as possible at the lowest
    possible cost. Scheduled to be operational in 2004, Montgomery Point
    will protect over $5 billion in public and private investments, some
    50,000 jobs, world trade, growing military shipments and future
    economic development.
        Continuing problems caused by the lowering of the Mississippi River
    continue to plague McClellan-Kerr entrance channel users. During times
    of low water on the Mississippi River the entrance channel is drained
    of navigable water depth. As the Mississippi River bottom continues to
    lower, the McClellan-Kerr moves toward total shutdown. Thus, the entire
    Arkansas River Navigation System is at risk, and its long-term
    viability is threatened without Montgomery Point.
        Use of the temporary by-pass channel increases navigation hazards
    and existing dredge disposal areas are virtually full. Mr. Chairman and
    Members of the Committee, continuing Congressional support is essential
    at this crucial time in the history of the project.
        The Interstate Committee also respectfully recommends the following
    as important priorities:
    Backlog of Major Maintenance--Arkansas
        A $2 million Congressional Add to the fiscal year 2004 O&M funding
    for advance maintenance dredging and a $5 million add for the backlog
    of channel maintenance, for the McClellan-Kerr Arkansas River
    Navigation System in Arkansas is vitally important. These additional
    funds will help repair bank stabilization, channel and other
    navigational system components that have deteriorated over the past 3
    decades.
        The O&M funding level has been stagnant for the past 11 years while
    cost and maintenance needs have continued to increase. Your help in
    adding $7 million to the project will reduce the critical backlog of
    needed maintenance repairs, the lack of which cause impediments to
    commercial navigation.
    Equus Beds Aquifer--Kansas
        Equus Beds Aquifer Storage and Recovery Project--continuation of a
    City of Wichita, Groundwater Management District No. 2 and the State of
    Kansas project to construct storage and recovery facilities for a major
    groundwater resource supplying water to more the 20 percent of Kansas
    municipal, industrial and irrigation users. The project will capture
    and recharge in excess of 100 million gallons per day and will also
    reduce on-going degradation of the existing groundwater by minimizing
    migration of saline water. Federal authorization and continued Federal
    funding is requested in the minimum amount of $1.5 million for fiscal
    year 2004 for the budget of the Bureau of Reclamation.
    Tow Haulage Equipment--Oklahoma
        We also request funding of $2.5 million to initiate the
    installation of tow haulage equipment on the locks located along the
    Arkansas River Portion of the McClellan-Kerr Arkansas River Navigation
    System in Oklahoma. Total cost for these three locks is $4.7 million.
    This project will involve installation of tow haulage equipment on W.D.
    Mayo Lock and Dam #14, Robert S. Kerr Lock and Dam #15, and Webbers
    Falls Lock and Dam #16, on the Oklahoma portion of the waterway. The
    tow haulage equipment is needed to make transportation of barges more
    efficient and economical by allowing less time for tows to pass through
    the various locks. Plans are complete and ready to implement.
        The testimony we present reveals our firm belief that our inland
    waterways and the Corps efforts are especially important to our Nation
    in this time of trial. Transportation infrastructure like the inland
    waterways, need be operated and maintained for the benefit of the
    populace. Without adequate annual budgets this is impossible.
        We strongly urge the Appropriations Committee to increase the Corps
    fiscal year 2004 budget so that long deferred system-wide maintenance
    may be accomplished and delayed construction projects may be completed
    in a timely and cost-effective manner.
        Mr. Chairman, Members of this Committee, we respectfully request
    that you and members of your staff review and respond in a positive way
    to the attached individual statements from each of our States which set
    forth specific requests pertaining to those States.
        We sincerely appreciate your consideration and assistance.
                                    arkansas
              statement of paul latture, ii, chairman for arkansas
        Mr. Chairman and members of the Committee, thank you for the
    opportunity to present testimony to this most important committee. I
    serve as Executive Director for the Little Rock Port Authority and as
    Arkansas Chairman for the Interstate Committee. Other committee members
    representing Arkansas, in whose behalf this statement is made, are
    Messrs. Wally Gieringer of Hot Springs Village, retired Executive
    Director of the Pine Bluff-Jefferson County Port Authority; Scott
    McGeorge, President, Pine Bluff Sand and Gravel Company, Pine Bluff;
    Barry McKuin of Morrilton, President of the Conway County Economic
    Development Corporation; and N.M. ``Buck'' Shell, CEO, Five Rivers
    Distribution in Van Buren and Fort Smith, Arkansas.
        In this time of war concerns, war on terrorism, homeland defense
    and needed economic recovery, our thanks go to each of you, your staff
    members and the Congress. Your efforts to protect our Nation's
    infrastructure and stimulate economic growth in this time of trial and
    tight budgets are greatly appreciated. Our fiscal year 2004 requests
    are modest.
        First, we have grave concern about a provision of the President's
    fiscal year 2004 budget request which would be very detrimental to the
    inland waterways, and especially the McClellan-Kerr Arkansas River
    Navigation System. That budget proposes 25 percent to 50 percent of the
    cost of Operation & Maintenance of fuel-taxed inland waterways segments
    be financed by the Inland Waterways Trust Fund (which by law is to be
    used to pay 50 percent of the cost of lock-and-dam replacements and
    major rehabilitations).
        This budget proposal singles out so-called ``low-use'' waterway
    segments moving less than 5 billion ton-miles of commerce annually, a
    category which would include the McClellan-Kerr, and would require
    reimbursement of 50 percent of O&M outlays from the trust fund.
        The proposal is unfair. The inland waterways provide multiple
    benefits: flood control, water supply, hydropower, transportation, and
    recreation. While not the sole user of the waterways, transportation
    users would be the only beneficiaries paying for the modernization and
    maintenance of the waterways.
        To take a portion of the inland O&M expenditures out of the Inland
    Waterways Trust Fund would quickly deplete the present surplus and lead
    to calls for closure of so-called low-use waterways or else for higher
    fuel taxes, which would adversely impact our Nation's agricultural,
    energy, and transportation sectors at a time when the economy is
    struggling to recover.
        We urge you to reject this ill-advised proposal and the tax
    increase it promises as well.
        We call to your attention four projects on the McClellan-Kerr
    Arkansas River Navigation System that are especially important to
    navigation and the economy of this multi-State area: completion of
    Montgomery Point Lock and Dam, needed advance maintenance dredging,
    backlog of channel maintenance, and completion of the Arkansas River
    Navigation Study, AR & OK.
    Montgomery Point Lock and Dam
        Mr. Chairman and Members of the Committee, continuing Congressional
    support is essential as construction for this major project nears
    completion. We respectfully request a $15 million Congressional Add for
    a total budget of $35 million for fiscal year 2004. With this funding
    Montgomery Point is scheduled to be operational in 2004.
        Montgomery Point will ensure reliable navigation to and from the
    McClellan-Kerr Arkansas River Navigation System during periods of low
    water on the Mississippi. Thus, it will protect over $5 billion in
    public and private investments, some 50,000 jobs, world trade and
    growing military shipments that have resulted from the McClellan-Kerr.
        Completion of this $262 million project is near. We are very
    grateful that you, your associates, and the Congress have recognized
    the urgency of constructing Montgomery Point.
    Advance Maintenance Dredging
        A $2,000,000 Congressional Add to the fiscal year 2004 O&M account
    for the McClellan-Kerr in Arkansas is needed for advance maintenance
    dredging to assure that the authorized depth of 9 feet is maintained.
    This funding is vitally important.
        We especially appreciate your help in the fiscal year 2003 budget
    by adding $1,000,000 to the O&M account for this procedure which is
    used to dredge in known problem areas prior to an event that is
    predicted to cause siltation above the authorized 9-foot channel depth.
        Dredging of the system is currently done after areas have silted in
    above the authorized channel depth causing light loading and delay
    problems for the navigation industry. Locations of needed dredging
    include the lower White River, at Pool 2, and the downstream approaches
    to Locks 6, 5, 4, and 3.
    Backlog of Channel Maintenance
        A $5 million Congressional Add to the fiscal year 2004 O&M funding
    for the McClellan-Kerr will help repair bank stabilization and other
    components that have deteriorated over the past 3 decades and reduce
    the critical backlog of maintenance repairs essential to commercial
    navigation.
        Bank stabilization and other components have deteriorated over the
    past 3 decades and reducing the critical backlog of maintenance repairs
    is essential. Repairs are necessary to maintain channel alignment,
    provide full channel width, eliminate shoaling and solve sediment
    build-up problems that cause light loading and delay problems for the
    navigation industry.
        The O&M funding level has been stagnant for the past 10 years while
    cost and maintenance needs have continued to increase.
    Arkansas River Navigation Study, Arkansas & Oklahoma
        A $430,000 Congressional Add is needed for a total budget of
    $1,500,000 for the important Arkansas River Navigation Study, AR & OK.
        While navigation is the primary purpose of the McClellan-Kerr
    System, navigation needs and flood control are closely related. Chronic
    high-water flows and channel restrictions result in decreased
    navigation traffic, as well as continued flooding in the vicinity of
    Fort Smith, Arkansas and reduced recreational use.
        This study addresses the Navigation System Operating Plan and
    navigable depths to improve navigation conditions on the river as well
    as the performance of flood control measures and the impacts of high/
    low flows on environmental quality and recreation uses.
        In addition, taking into account the need to realize the total
    economic potential of the McClellan-Kerr Navigation System, WRDA 2000
    directed the Corps to ``expedite completion of the Arkansas River
    Navigation Study, including the feasibility of increasing the
    authorized channel depth from 9 feet to 12 feet.''
        Other projects are important to the environment, social and
    economic well-being of our region and Nation. We recognize the
    importance of continued construction of needed features to the
    McClellan-Kerr Arkansas River Navigation System and strongly recommend
    that you favorably consider the following in your deliberations:
      --Support continued funding for the construction, and Operation and
            Maintenance of the McClellan-Kerr Arkansas River Navigation
            System. Completion of Montgomery Point will eliminate up 95
            percent of the need for dredging in the Lower White and bring
            about substantial O&M savings for the Navigation System.
      --It is important that future budgets include funds for needed
            construction and the backlog of major channel maintenance that
            continues to grow. Repairs are necessary to maintain channel
            alignment, provide full channel width, and eliminate shoaling.
            This channel maintenance will further contribute to the
            efficiency and economy of the system.
      --Continue construction authority for the McClellan-Kerr Arkansas
            River Navigation Project until remaining channel stabilization
            problems identified by the Little Rock District Corps of
            Engineers have been resolved. It is vitally important that the
            Corps continue engineering studies to develop a permanent
            solution to the threat of cutoffs developing in the lower
            reaches of the navigation system and for the Corps to construct
            these measures under the existing construction authority.
        In conclusion, Mr. Chairman, please help prevent a crisis for the
    Arkansas River Navigation System and the multi-State region it serves
    by appropriating $35 million for use in fiscal year 2004 to complete
    construction for Montgomery Point Lock and Dam.
        The entire Arkansas River Navigation System is at risk and remains
    at risk until Montgomery Point is completed. Some $5 billion in Federal
    and private investments, thousands of jobs, world trade and growing
    military shipments for national security are endangered.
        We fully endorse the statement presented to you today by the
    Chairman of the Arkansas River Basin Interstate Committee. We
    appreciate the opportunity to provide testimony to your most important
    subcommittee and urge you to favorably consider these requests that are
    so important to the economic recovery of our region and Nation.
                                     kansas
               statement of gerald h. holman, chairman for kansas
        Mr. Chairman and members of the committee, I am Gerald H. Holman,
    Senior Vice President of the Wichita Area Chamber of Commerce, Wichita,
    Kansas and Chairman of the Kansas Interstate Committee for the Arkansas
    Basin Development Association (ABDA). I also serve as Chairman of ABDA.
        The Kansas ABDA representatives join with our colleagues from the
    States of Oklahoma, Arkansas and Colorado to form the multi-State
    Arkansas River Basin Interstate Committee. We fully endorse the summary
    statement of the Arkansas River Basin Interstate Committee.
        In addition to the important projects listed below, continued
    construction to completion of the Montgomery Point Lock and Dam Project
    is essential to maintain viable navigation for commerce on the
    McClellan-Kerr Navigation System. This inland waterway is vital to the
    economic health of our multi-State area. Likewise, your support is
    vital to maintain its future viability. Construction is more than 80
    percent complete and continued funding is needed. We state our
    unanimous support for the $35 million needed by the Corps of Engineers
    for fiscal year 2004 to maintain the most economical and cost efficient
    construction schedule.
        The critical water resources projects in the Kansas portion of the
    Arkansas River Basin are identified below. The projects are safety,
    environmental and conservation oriented and all have regional and/or
    multi-State impact. We are grateful for your leadership and your past
    commitment to our area.
        We ask for your continued support for these important Bureau of
    Reclamation projects on behalf of the Wichita/South Central Kansas
    area:
    Equus Beds Aquifer Storage and Recovery Project
        This is the continuation of a Bureau of Reclamation project jointly
    endorsed by the City of Wichita, Groundwater Management District No. 2
    and the State of Kansas. This model technology has proven the
    feasibility of recharging a major groundwater aquifer supplying water
    to nearly 600,000 irrigation, municipal and industrial users. The
    demonstration project has successfully recharged more than 1 billion
    gallons of water from the Little Arkansas River. The project is
    essential to help protect the aquifer from on-going degradation caused
    by the migration of saline water.
        The State of Kansas supports this much-needed project in order to
    secure the quality of life and economic future for more than 20 percent
    of the State's population. The project is included within the Kansas
    Water Plan. All interested parties fully support the project as the
    needed cornerstone for the area agricultural economy and for the
    economy of the Wichita metropolitan area.
        The demonstration project has confirmed earlier engineering models
    that the full scale aquifer storage and recovery project is feasible
    and capable of meeting the increasing water resource needs of the area
    to the mid 21st century. Presently, the Equus Beds provide
    approximately half of the Wichita regional municipal water supply. The
    Equus Beds are also vital to the surrounding agricultural economy.
    Environmental protection of the aquifer, which this strategic project
    provides, has increasing importance to ensure quality water for the
    future since south central Kansas will rely to an even greater extent
    on the Equus Beds aquifer for water resources.
        The aquifer storage and recovery project is a vital component of
    Wichita's comprehensive and integrated water supply strategy. The full
    scale design concept for the aquifer storage and recovery project calls
    for a multi-year construction program. Phase One is estimated to cost
    $17.1 million. The total project involving the capture and recharge of
    more than 100 million gallons of water per day is estimated to cost
    $110 million over 10 years. This is substantially less costly, both
    environmentally and economically, when compared with reservoir
    construction or other alternatives.
        We are grateful for your previous cost share funding during the
    demonstration phase, as a compliment to funds provided by the City of
    Wichita. As we enter the construction phase, we request continued
    Congressional support:
      --By authorizing as a Federal project, the Aquifer Storage and
            Recovery Project and directing the Bureau of Reclamation to
            participate in its final design and construction to completion.
      --Through continued cost share funding of the full-scale Aquifer
            Storage and Recovery Project in the minimum amount of
            $1,500,000 for fiscal year 2004.
    Cheney Reservoir
        The reservoir provides approximately half of Wichita's regional
    water supply. Two continuing environmental problems threaten the water
    quality and longevity of the reservoir. One is sedimentation from soil
    erosion and the other is non-point source pollution, particularly the
    amount of phosphates entering the reservoir resulting in offensive
    taste and odor problems. A partnership between farmers, ranchers and
    the City of Wichita has proven beneficial in implementing soil
    conservation practices and to better manage and therefore reduce and/or
    eliminate non-point source pollution. Lansat 7 imaging and digital
    elevation modeling have been employed to identify high priority areas.
    To date, over 2,000 environmental projects have been completed within
    the 543,000-acre watershed. Buffer strips are most important for the
    control of pollution from intermittent streams and also from livestock
    waste. This partnership must continue indefinitely to protect the
    reservoir and to extend the life of the Wichita regional water supply.
    The City of Wichita is providing funding for this critical, nationally
    acclaimed model nonpoint source pollution project. We request continued
    Federal funding in the amount of $125,000 for fiscal year 2004.
        Many of our agricultural communities have historically experienced
    major flood disasters, some of which have resulted in multi-State
    hardships involving portions of the State of Oklahoma. The flood of
    1998 emphasized again the need to rapidly move needed projects to
    completion. Major losses also took place in the Wichita metropolitan
    area. Projects in addition to local protection are also important.
        Our small communities lack the necessary funds and engineering
    expertise and Federal assistance is needed. This Committee has given
    its previous support to Kansas Corps of Engineers projects and we
    request your continued support for the following:
      --Arkansas City, Kansas Flood Protection.--Unfortunately, this
            project was not completed prior to the flood of 1998. The flood
            demonstrated again the critical need to protect the
            environment, homes and businesses from catastrophic damages
            from either Walnut River or Arkansas River flooding. When the
            project is complete, damage in a multi-county area will be
            eliminated and benefits to the State of Oklahoma just a few
            miles south will also result. The Secretary of the Army was
            authorized to construct the project in fiscal year 1997. The
            project is slated for completion in fiscal year 2005. We
            request your continued support in the amount of $2.6 million,
            the level needed by the Corps of Engineers.
      --Walnut River Basin, Kansas Feasibility Study.--This basin including
            the Whitewater and Little Walnut Rivers is located in south
            central Kansas. The feasibility study will identify ecosystem
            resources, evaluate the system qualities, determine past losses
            and current needs, and evaluate potential restoration and
            preservation measures. The non-Federal sponsor is the Kansas
            Water Office who believes that environmental restoration is a
            primary need in the basin. Environmental restoration features
            may also stabilize and protect streambanks from erosion and
            improve the water quality in the basin. The request for fiscal
            year 2004 is $160,000, which is the Corps' capability.
      --John Redmond Reservoir Reallocation Study.--John Redmond Reservoir
            remains a primary source of water supply for many small
            communities in Kansas. It is suffering loss of capacity ahead
            of its design rate due to excessive deposits within the
            conservation pool. The flood pool remains above its design
            capacity. Funding was provided in fiscal year 2001 to initiate
            a study, which will ascertain the equitable distribution of
            sediment storage between conservation and flood control
            storages and also evaluate the environmental impact of the
            appropriate reallocation. Additional funding of $75,000 is
            needed in fiscal year 2004 to complete the study.
      --Grand Lake Feasibility Study.--A need exists to complete evaluation
            of water resource problems in the Grand-Neosho River basin in
            Kansas and Oklahoma to evaluate solutions to upstream flooding
            problems associated with the adequacy of existing real estate
            easements necessary for flood control operations of Grand Lake,
            Oklahoma. A study authorized by the Water Resources Development
            Act of 1996 was completed in September of 1998 and determined
            that if the project were constructed based on current criteria,
            additional easements would be required. Section 449 of WRDA
            2000 directed the Secretary to evaluate backwater effects
            specifically due to flood control operations on land around
            Grand Lake. That study indicated that Federal actions have been
            a significant cause of the backwater effects and according to
            WRDA 2000, the feasibility study should be 100 percent
            federally funded. A Feasibility study is necessary to determine
            the most cost-effective solution to the real estate
            inadequacies. Changes in the operations of the project or other
            upstream changes could have a significant impact on flood
            control, hydropower, and navigation operations in the Grand
            (Neosho) River system and on the Arkansas River basin system,
            as well. We request funding in the amount of $3 million in
            fiscal year 2004 to fully fund Feasibility studies evaluating
            solutions to upstream flooding associated with existing
            easements necessary for flood control operations of Grand Lake.
      --Grand (Neosho) Basin Watershed Reconnaissance Study.--A need exists
            for a basin-wide water resource planning effort in the Grand-
            Neosho River basin, apart from the issues associated with Grand
            Lake, Oklahoma. The reconnaissance study would focus on the
            evaluation of institutional measures needed to improve the
            quality of the aquatic and terrestrial habitat in the basin and
            to assist communities, landowners, and other interests in
            southeastern Kansas and northeastern Oklahoma in the
            development of non-structural measures to reduce flood damages.
            We request funding in the amount of $100,000 in fiscal year
            2004.
      --Continuing Authorities Programs.--We support funding of needed
            programs including the Small Flood Control Projects Program
            (Section 205 of the 1948 Flood Control Act, as amended) as well
            as the Emergency Streambank Stabilization Program (Section 14
            of the 1946 Flood Control Act, as amended). Smaller communities
            in Kansas (Iola, Liberal, McPherson, Augusta, Parsons, Altoona,
            Kinsley, Newton, Arkansas City, Coffeyville and Medicine Lodge)
            have previously requested assistance from the Corps of
            Engineers under these programs. The City of Wichita is also
            requesting funding through this program to address flooding
            problems. We urge you to support these programs to the $50
            million programmatic limit for the Small Flood Control Projects
            Program and $15 million for the Emergency Streambank
            Stabilization Program.
          The Planning Assistance to States Program under section 22 of the
            Water Resources Development Act of 1974, as amended, provides
            Federal funding to assist the States in water resource
            planning. The State of Kansas is grateful for previous funding
            under this program which has assisted small Kansas communities
            in cost sharing needed resource planning as called for and
            approved in the Kansas State Water Plan. We request continued
            funding of this program at the level which will allow the State
            of Kansas to receive the $500,000 limit.
          Also, Ecosystem Restoration Programs are relatively new programs
            which offer the Corps of Engineers a unique opportunity to work
            to restore valuable habitat, wetlands, and other important
            environmental features which previously could not be
            considered. Preliminary Restoration Plan studies are underway
            at Newton, Garden City and Neosho County. We urge you to
            support section 1135 of the Water Resources Development Act of
            1986 and Section 206 of the Water Resources Development Act of
            1996 at their $25 million programmatic limits.
        Finally, we are very grateful that both the Corps of Engineers and
    Bureau of Reclamation have the expertise needed for the development and
    protection of water resources infrastructure. It is essential to have
    the integrity and continuity these agencies provide on major public
    projects. Your continued support of these vital agencies, including
    funding, will be appreciated. Our infrastructure must be maintained and
    where needed, enhanced for the future.
        Mr. Chairman and Members of these Committees, we thank you for the
    dedicated manner in which you have dealt with the Water Resources
    Programs and for allowing us to present our funding requests.
        Thank you very much.
                                    oklahoma
           statement of james m. hewgley, jr., chairman for oklahoma
        Mr. Chairman and members of the committee, I am James M. Hewgley,
    Jr., Oklahoma Chairman of the Arkansas River Basin Interstate
    Committee, from Tulsa, Oklahoma.
        It is my privilege to present this statement on behalf of the
    Oklahoma Members of our committee in support of adequate funding for
    water resource development projects in our area of the Arkansas River
    Basin. Other members of the Committee are: Mr. Ted Coombes, Tulsa; Mr.
    A. Earnest Gilder, Muskogee; Mr. Terry McDonald, Tulsa; and Mr. Lew
    Meibergen, Enid.
        Together with representatives of the other Arkansas River Basin
    States, we fully endorse the statement presented to you by the Chairman
    of the Arkansas River Basin Interstate Committee. We appreciate the
    opportunity to present our views of the special needs of our States
    concerning several studies and projects.
    Montgomery Point Lock and Dam--Montgomery Point, Arkansas
        As we have testified for several years, we are once again
    requesting adequate appropriations to continue construction of this
    most important and much needed project. This project must be kept on
    the current schedule to insure the shippers on the system will not be
    impacted by a low water event after that date. Lower funding will only
    stretch out the completion of the project and add to the final cost in
    real dollars and subject the shippers to possible losses due to low
    water and restrictions on, or halting, navigation.
        We respectfully request the Congress to appropriate $35 million in
    the fiscal year 2004 budget cycle to continue construction on the
    current project schedule. With the needed funding for fiscal year 2004
    the project can be finished by July of 2004. This request coincides
    with the President's recommendation that ``funding go toward ongoing
    projects, particularly those nearing completion.'' This will help
    insure the project is completed and in operation in a timely manner at
    the lowest possible cost.
        Mr. Chairman, it is my pleasure to point out to this distinguished
    Committee that this navigation system has brought low cost water
    transportation to Oklahoma, Arkansas and the surrounding States. There
    has been over $5.5 billion invested in the construction and development
    of the McClellan-Kerr Arkansas River Navigation system by the Federal
    Government ($1.3 billion) and the public and private ($4.2 billion+)
    sector, resulting in the creation of over 50,000 jobs in this partnered
    project.
    Maintenance of the Navigation System
        We request additional funding in the amount of $2 million, over and
    above normal funding, for deferred channel maintenance. These funds
    would be used for such things as repair of bank stabilization work,
    needed advance maintenance dredging, and other repairs needed on the
    system's components that have deteriorated over the past 3 decades.
        In addition to the systemwide needed maintenance items mentioned
    above, the budget for the Corps of Engineers for the past several years
    has been insufficient to allow proper maintenance of the McClellan-Kerr
    Arkansas River Navigation System--Oklahoma portion. As a result, the
    backlog of maintenance items has continued to increase. If these
    important maintenance issues are not addressed soon, the reliability of
    the system will be jeopardized. The portion of the system in Oklahoma
    alone is responsible for returning $2.6 billion in annual benefits to
    the regional economy. We therefore request that $2.8 million be added
    to the budget to accomplish the critical infrastructure maintenance
    items following: Repair weir at L&D 14; repair tainter gates at L&D 17;
    upgrade gate motor controls at L&D 14; dewater, inspect, repair Locks
    14, 15, & 16; repair tainter gates at L&D 18; L&D 14-18--remote control
    tainter gates; R.S. Kerr--repair miter gates; R.S. Kerr--repair Lock 15
    support cell; replace pole lighting--Locks 14--18; replace tainter gate
    limit switches--R.S. Kerr. These are the very worst of the needed
    repairs of the many awaiting proper preventive maintenance and repair.
    Tow Haulage Equipment--Oklahoma
        We also request funding of $2.5 million to initiate the
    installation of tow haulage equipment on the locks located along the
    Arkansas River Portion of the McClellan-Kerr Arkansas River Navigation
    System. Total cost for these three locks is $4.7 million. This project
    will involve installation of tow haulage equipment on W.D. Mayo Lock
    and Dam #14, Robert S. Kerr Lock and Dam #15, and Webbers Falls Lock
    and Dam #16, on the Oklahoma portion of the waterway. The tow haulage
    equipment is needed to make transportation of barges more efficient and
    economical by allowing less time for tows to pass through the various
    locks.
    Arkansas River System Operations Feasibility Study--Arkansas and
            Oklahoma
        We are especially pleased that the budget includes funds to
    continue the Arkansas River Navigation Study, a feasibility study which
    is examining opportunities to optimize the Arkansas River system. The
    system of multipurpose lakes in Arkansas and Oklahoma on the Arkansas
    River and its tributaries supports the McClellan-Kerr Arkansas River
    Navigation System, which was opened for navigation to the Port of
    Catoosa near Tulsa, Oklahoma, in 1970. The navigation system consists
    of 445 miles of waterway that passes through the States of Oklahoma and
    Arkansas. This study would optimize the reservoirs in Oklahoma and
    Arkansas that provide flows into the river, with a view toward
    improving the number of days per year that the navigation system would
    accommodate tows. This study could have significant impact on the
    economic development opportunities in the States of Oklahoma, Arkansas
    and the surrounding States. Due to the critical need for this study, we
    request funding of $1.2 million, which is greater than shown in the
    budget, to continue feasibility studies in fiscal year 2004.
    Miami, Oklahoma and Vicinity Feasibility Study
        We request funding of $231,000 to complete the reconnaissance phase
    for the vicinity in Ottawa County including and surrounding Miami,
    Oklahoma in the Grand (Neosho) Basin. Water resource planning-related
    concerns include chronic flooding, ecosystem impairment, poor water
    quality, subsidence, chat piles, mine shafts, health effects, and
    Native American issues. The State of Oklahoma's desire is to address
    the watershed issues in a holistic fashion and restore the watershed to
    acceptable levels. Study alternatives could include structural and non-
    structural flood damage measures, creation of riverine corridors for
    habitat and flood storage, development of wetlands to improve aquatic
    habitat and other measures to enhance the quality and availability of
    habitat and reduce flood damages.
        We are pleased that the President's budget includes funds to
    advance work for Flood Control and other water resource needs in
    Oklahoma. Of special interest to our committee is funding for the
    Skiatook and Tenkiller Ferry Lakes Dam Safety Assurance Projects in
    Oklahoma and that construction funding has been provided for those
    important projects. We would like to see Tenkiller funded at the $6.0
    million level, which is the Corps' capability for fiscal year 2004. We
    request that funding in the amount of $1.2 million be provided to
    initiate the Canton Lake Dam safety project. We are also pleased that
    funding is included to continue reconnaissance studies for the Oologah
    Watershed, the Wister Watershed and the Miami, OK and Vicinity region.
    We are also pleased to see continued funding for the SE Oklahoma Water
    Resource Study, and the Miami, OK and Vicinity region.
    Oologah Lake Watershed Feasibility Study
        We request funding of $259,000 for ongoing feasibility studies at
    Oologah Lake and in the upstream watershed. The lake is an important
    water supply source for the city of Tulsa and protection of the lake
    and maintaining and enhancing the quality of the water is important for
    the economic development of the city. Recent concerns have been
    expressed by the City of Tulsa and others regarding potential water
    quality issues that impact water users, as well as important aquatic
    and terrestrial habitat. Concerns are related to sediment loading and
    turbidity, oilfield-related contaminants and nutrient loading.
    Illinois River Watershed Reconnaissance Study
        We request funding in the amount of $100,000 to conduct a
    reconnaissance study of the water resource problems of the Illinois
    River Basin. The Illinois River watershed is experiencing continued
    water resource development needs and is the focus of ongoing Corps and
    other agency investigations. However, additional flows are sought
    downstream of the Lake Tenkiller Dam and there are increasing watershed
    influences upstream of Lake Tenkiller which impact on the quality of
    water available for fish and wildlife, municipal and industrial water
    supply users, and recreation users of the Lake Tenkiller and Illinois
    River waters.
    Grand (Neosho) Basin Reconnaissance Study
        We request funding in the amount of $100,000 to conduct a
    reconnaissance study of the water resource problems in the Grand
    (Neosho) Basin in Oklahoma and Kansas. There is a need for a basin-wide
    water resource planning effort in the Grand-Neosho River basin, apart
    from the issues associated with Grand Lake, Oklahoma. The
    reconnaissance study would focus on the evaluation of institutional
    measures which could assist communities, landowners, and other
    interests in northeastern Oklahoma and southeastern Kansas in the
    development of non-structural measures to reduce flood damages in the
    basin.
    Grand Lake Feasibility Study
        A need exists to evaluate water resource problems in the Grand-
    Neosho River basin in Kansas and Oklahoma to evaluate solutions to
    upstream flooding problems associated with the adequacy of existing
    real estate easements necessary for flood control operations of Grand
    Lake, Oklahoma. A study authorized by the Water Resources Development
    Act of 1996 was completed in September of 1998 and determined that if
    the project were constructed based on current criteria, additional
    easements would be required. Section 449 of WRDA 2000 directed the
    Secretary to evaluate backwater effects specifically due to flood
    control operations on land around Grand Lake. That study indicated that
    Federal actions have been a significant cause of the backwater effects
    and according to WRDA 2000, the feasibility study should be 100 percent
    federally funded. A Feasibility study is necessary to determine the
    most cost-effective solution to the real estate inadequacies. Changes
    in the operations of the project or other upstream changes could have a
    significant impact on flood control, hydropower and navigation
    operations in the Grand (Neosho) River system and on the Arkansas River
    Basin system, as well. We urge you to provide $3 million to fully fund
    Feasibility studies for this important project in fiscal year 2003 and
    to direct the Corps of Engineers to execute the study at full Federal
    expense.
    Wister Lake Watershed Feasibility Study
        We request funding of $200,000 to continue feasibility studies of
    the Wister Lake watershed. Wister Lake is located on the Poteau River
    near Wister, Oklahoma. The lake was completed in 1949 for flood
    control, water supply, water conservation and sediment control. Wister
    Lake is the primary water resource development project in the Poteau
    River Basin. It provides substantial flood control, municipal and
    industrial water supply, and recreation benefits for residents of
    LeFlore County, Oklahoma, and the southeastern Oklahoma region.
    Ecosystem degradation in the lake and in the basin, in general, is
    occurring primarily as a result of non-point source pollution from
    poultry operations, forestry practices, abandoned strip coal mines, and
    natural gas exploration operations. The study will identify potential
    measures to restore the ecosystem in the basin and will evaluate other
    water resource problems and potential solutions.
        We also support funding for the Continuing Authorities Program,
    including the Small Flood Control Projects Program, (Section 205 of the
    1948 Flood Control Act, as amended) and the Emergency Streambank
    Stabilization Program, (Section 14 of the 1946 Flood Control Act, as
    amended). We want to express our appreciation for your continued
    support of those programs.
    Section 205
        Although the Small Flood Control Projects Program addresses flood
    problems which generally impact smaller communities and rural areas and
    would appear to benefit only those communities, the impact of those
    projects on economic development crosses county, regional, and
    sometimes State boundaries. The communities served by the program
    frequently do not have the funds or engineering expertise necessary to
    provide adequate flood damage reduction measures for their citizens.
    Continued flooding can have a devastating impact on community
    development and regional economic stability. The program is extremely
    beneficial and has been recognized nationwide as a vital part of
    community development, so much so in fact, that there is currently a
    backlog of requests from communities who have requested assistance
    under this program. There is limited funding available for these
    projects and we urge this program be fully funded to the programmatic
    limit of $50 million.
    Section 14
        Likewise, the Emergency Streambank Stabilization Program provides
    quick response engineering design and construction to protect important
    local utilities, roads and other public facilities in smaller urban and
    rural settings from damage due to streambank erosion. The protection
    afforded by this program helps ensure that important roads, bridges,
    utilities and other public structures remain safe and useful. By
    providing small, affordable and relatively quickly constructed
    projects, these two programs enhance the lives of many by providing
    safe and stable living environments. There is also a backlog of
    requests under this program. Funding is also limited for these projects
    and we urge this program be fully funded to the programmatic limit of
    $15 million.
        We also request your continued support of the Flood Plain
    Management Services Program (Section 206 of the 1960 Flood Control Act)
    which authorizes the Corps of Engineers to use its technical expertise
    to provide guidance in flood plain management matters to all private,
    local, State and Federal entities. The objective of the program is to
    support comprehensive flood plain management planning. The program is
    one of the most beneficial programs available for reducing flood losses
    and provides assistance to officials from cities, counties, States and
    Indian Tribes to ensure that new facilities are not built in areas
    prone to floods. Assistance includes flood warning, flood proofing, and
    other flood damage reduction measures, and critical flood plain
    information is provided on a cost-reimbursable basis to home owners,
    mortgage companies, Realtors and others for use in flood plain
    awareness and flood insurance requirements.
        We also request your support of the Planning Assistance to States
    Program (Section 22 of the 1974 Water Resources Development Act) which
    authorizes the Corps of Engineers to use its technical expertise in
    water and related land resource management to help States and Indian
    Tribes solve their water resource problems. The program is used by many
    States to support their State Water Plans. As natural resources
    diminish, the need to manage those resources becomes more urgent. We
    urge your continued support of this program as it supports States and
    Native American Tribes in developing resource management plans which
    will benefit citizens for years to come. The program is very valuable
    and effective, matching Federal and non-Federal funds to provide cost-
    effective engineering expertise and support to assist communities,
    States and tribes in the development of plans for the management,
    optimization and preservation of basin, watershed and ecosystem
    resources. The Water Resources Development Act of 1996 increased the
    annual program limit from $6 million to $10 million and we urge this
    program be fully funded to the programmatic limit of $10 million.
        On a related matter, we would share with you our concern that the
    administration has not requested, nor has the Congress appropriated,
    sufficient funds to meet the increasing infrastructure needs of the
    inland waterways of our Nation. The administration's requests will not
    keep projects moving at the optimum level to complete them on a cost-
    effective basis. Moving the completion dates out is an unacceptable
    exercise since 50 percent of the funds come from the Waterways Trust
    Fund. This will not only waste Federal funds but, those from the trust
    fund as well.
        As the Waterways Trust Fund is now defined, it is to be used for
    the Waterway Industries' cost share of new construction and major rehab
    of the inland waterway navigation system, so stated by law in the 1986
    WRDA. The Administration's request to redirect some of those funds to
    operation and maintenance is in conflict with the agreement between the
    Congress and the Industry. We urge the Congress to protect and use
    these funds for their intended purpose and to honor the agreement
    between the Federal Government and the Waterway Industry.
        We strongly urge the Appropriations Committee to raise the Corps of
    Engineers' budget to $5 billion to help get delayed construction
    projects back on schedule and to reduce the deferred maintenance
    backlog which is out of control. This will help the Corps of Engineers
    meet the obligations of the Federal Government to people of this great
    country.
        Concerning another related matter, we have deep concerns about the
    attempt to re-authorize the Endangered Species Act without significant
    beneficial reforms. If a bill is passed through without reforms, it
    will be devastating to industry and the country as a whole. We strongly
    urge you to take a hard look at any bill concerning this re-
    authorization and insure that it contains reasonable and meaningful
    reforms. We urge the re-authorization of the act with reforms at the
    earliest possible time.
        Mr. Chairman, we appreciate this opportunity to present our view on
    these subjects.
                                     ______

    Prepared Statement of the Salt River Pima-Maricopa Indian Community and
                           the City of Mesa, Arizona
        Chairman Domenici, Ranking Member Reid, and distinguished members
    of the subcommittee, thank you for allowing us to testify on behalf of
    the Salt River Pima-Maricopa Indian Community (SRPMIC) and the City of
    Mesa in support of a fiscal year 2004 appropriation of $870,000 for the
    Va Shly'ay Akimel, Arizona, project of the U.S. Army Corps of
    Engineers. This project, intended to restore a degraded stretch of the
    Salt River in central Arizona, is critically important to the tribe,
    the City, and the region.
        Mr. Chairman, because of this subcommittee's efforts, $800,000 was
    appropriated for the feasibility phase of the Va Shly'ay Akimel project
    in fiscal year 2003. We are extremely grateful for the subcommittee's
    ongoing support of the project. We respectfully request your continued
    support for this project in fiscal year 2004 with an appropriation of
    $870,000, the amount required to complete the feasibility study.
        Like many projects of the U.S. Army Corps of Engineers, Va Shly'ay
    is drastically underfunded in the President's budget. Although the
    budget does include $400,000 for the project in fiscal year 2004, the
    Corps has a capability of $870,000 to complete the feasibility study in
    the coming year. We hope that the subcommittee will provide this level
    of funding in order to contain costs and maintain an optimal project
    schedule.
        SRPMC and the City of Mesa fully recognize the importance of
    restoring the Salt River's environmental integrity. As a consequence,
    the tribe and City--the non-Federal sponsors of the project--remain
    committed to discharging the requisite cost-sharing obligations
    associated with the project. We would also note that, as far as we
    know, this project is the only one in the Nation featuring a joint
    cost-share agreement between an Indian tribe and a local community.
    This makes it a unique project of the Corps of Engineers. We have every
    reason to believe that this example of municipal-tribal cooperation
    could serve as a model for future joint projects of tribal communities
    and local governments.
        In conclusion, it is critically important that this project remain
    on an optimal schedule. The Corps has expressed a maximum capability of
    $870,000 to complete the feasibility study in fiscal year 2004. On
    behalf of the SRPMIC and the City of Mesa, we ask that you fully fund
    the Va Shly'ay Akimel project at $870,000 in fiscal year 2004.
                                     ______

             Prepared Statement of the National Mining Association
        The National Mining Association (NMA) membership includes companies
    engaged in the production of coal, metallic ores, nonmetallic minerals,
    and in manufacturing mining machinery and equipment. The transportation
    of coal and minerals to domestic and international markets utilizes our
    Nation's inland waterways system, Great Lakes, coastal shipping lanes
    and harbors and shipping channels at deep draft inland and coastal
    ports.
        NMA believes that a strong transportation network comprised of our
    highways, rails, inland waterways and ports is critical to the economic
    growth, security and competitiveness of the United States. According to
    the U.S. Army Corps of Engineers Waterborne Commerce Statistics of
    2001, approximately 2.4 billion tons of commerce moved in the U.S.
    marine system (inland waterways, Great Lakes, coastal and deep-draft
    ports). Of that total, approximately 1.04 billion tons were domestic
    movements with coal comprising approximately 223 million tons or 21
    percent of all commodities. Of the 223 million tons of coal, 170
    million tons were carried on the inland and intracoastal waterways,
    18.5 million tons on the Great Lakes and the remainder moved in
    coastwise and intraport shipments. On the Ohio River system and its
    tributaries, coal movements totaled 157 million tons or 56 percent of
    all the traffic. Coal moved to power plants along the system and to
    power plants in 8 States outside of the basin. In addition, 55 million
    tons of coal was exported in 2001.
        Iron ore, phosphate rock, and other minerals also utilize the
    inland waterways system. In 2001, almost 66 million tons of iron ore
    moved on the system. Of the total, 48.4 million tons moved domestically
    with 44.8 million tons moved on the Great Lakes and 3.5 million tons on
    the inland system. More than 1.7 million tons of phosphate rock moved
    on the waterways system through coastwise movements.
        NMA strongly opposes the administration's proposals in the fiscal
    year 2004 budget to expand the responsibilities of the Inland Waterways
    Trust Fund (IWTF) and the Harbor Maintenance Trust Fund (HMTF). These
    trust funds were established after a great deal of public debate and
    study as part of the Water Resources Development Act of 1986. The
    unique partnership for sharing construction, rehabilitation and
    maintenance costs between the public and private sectors has built a
    marine transportation system that is world class.
        In addition, NMA is very concerned that the proposed Fiscal Year
    2004 Budget for the Corps of Engineers does not provide sufficient
    funding to keep critical navigation projects on schedule, allow for the
    start of new projects, and address the maintenance backlog for existing
    navigation projects. As the system is asked to do more, it is critical
    that all parties are committed and a critical demonstration of the
    commitment is through appropriations levels that address the current
    challenges facing the system and plan for future demands.
    administration's proposals to expand expenditures from the iwtf and the
                                      hmtf
        Users of the inland waterways system pay a fuel tax of 20 cents per
    gallon, which has historically generated approximately $100 million
    annually for the IWTF. Also, an additional fuel tax of 4.3 cents is
    paid to the General Treasury for deficit reduction. These monies in the
    IWTF are used to pay 50 percent of the annual costs associated with new
    construction and major rehabilitation of locks and dams on the fuel-
    taxed inland waterways. The remaining 50 percent is matched by money
    from the Federal Government. Instead of being used immediately as
    originally intended for inland waterways projects, the IWTF has a
    surplus of approximately $394 million. In reality, there is no surplus
    because these funds, as well as the revenue generated by the 20-cents-
    per gallon fuel tax for the next 8 years, are committed to complete six
    of the priority and congressionally-approved projects currently under
    construction.
        Without existing authorization, the administration's fiscal year
    2004 budget proposes to use the surplus and future trust fund revenues
    to finance 25-50 percent of the costs associated with operations and
    maintenance in addition to current expenditures for new construction
    and maintenance. The proposal is for IWTF to provide $146 million for
    operations and maintenance in addition to the $110 million for IWTF
    projects.
        It is estimated that under this proposal the IWTF will be out of
    funds in 3 years. The real effect of the administration's proposal is
    an increase in user taxes for the transporters. It is estimated that
    the diesel tax would have to be increased from its current 20 cents per
    gallon to 53.5 cents per gallon--a stunning 168 percent increase. These
    increases would be passed along as additional transportation costs and
    reflected in the cost of coal and other minerals shipped on the inland
    waterways systems. In 2001, more than 293 million tons of coal moved
    domestically or to international markets. Consumers would see cost
    increases for electricity generated by coal and for products such as
    steel that use coal as a raw material. The already dismal coal exports
    would be further disadvantaged in the international marketplace.
        Barge companies and private sector companies, such as coal and
    mineral producers, are not the only beneficiaries of a well-maintained
    inland waterways system. However, they would be the only beneficiaries
    paying for operations and maintenance of the system. The system also
    provides benefits related to national security, water supply, flood
    control, hydropower, and recreation. The Federal Government, up until
    this time, has recognized the multiple benefits and has assumed
    responsibility for operations and maintenance. During consideration of
    the Water Resources Act of 1986, Congress debated this issue and the
    current system was the outcome. And in 1996, a proposal to increase the
    fuel tax by $1.00 per gallon was rejected by Congress.
        The administration's proposal related to the HMTF would require
    that the Federal share of deep-draft navigation channel construction
    costs be allocated from the trust fund rather than the Federal
    Government as currently mandated. Again, authorization does not exist
    for this proposal. Investment in the Nation's ports and harbors is a
    local and Federal partnership. Local authorities invest in marine
    terminal capacity and efficiency, dredging of berths and approach
    channels and cost sharing new construction dredging projects to widen
    or deepen navigation channels. Ports are expected to spend
    approximately $1.9 billion over the next 5 years on capital
    expenditures. Currently, the HMTF covers 100 percent of all operations
    and maintenance costs associated with maintaining our Nation's harbors.
    The funds for the HMTF come from a tax on the value of cargo imported
    into the United States or moved coastwise.
        The Federal Government invests only in navigation projects that
    return national benefits. The administration's proposal relieves the
    Federal taxpayer, who is the ultimate beneficiary of these projects
    from any responsibility to pay for the modernization of our Nation's
    deep-draft navigation system. In addition, the proposal completely
    abdicates the Federal responsibility for national security. The U.S.
    Coast Guard, Navy and other units of the Armed Forces depend on well-
    maintained and deepened harbors as bases of operation. At this time,
    more than any other in recent history, the national security
    implications are very clear. Furthermore, with the administration's
    proposal for HMTF covering 100 percent of costs related to operations
    and maintenance as well as the Federal share for new construction
    projects, any Federal responsibility or role related to our Nation's
    ports and harbors is abdicated.
      general recommendations for fiscal year 2004 appropriations for the
                  army corps of engineers civil works program
        NMA reviewed the proposed fiscal year 2004 Appropriations for the
    Army Corps of Engineers and the Civil Works Program and has the
    following general recommendations.
      --A minimum of $5 billion should be appropriated in fiscal year 2004
            for the Civil Works Program. This level balances the need to
            address the significant project backlog and the capability of
            the Corps with our Nation's need at this time for homeland
            security and national defense.
      --A level of $150 million should be withdrawn from the Inland
            Waterways Trust Fund to be matched by an equal appropriation
            from the general fund for the construction and major
            rehabilitation of locks and dams on the inland waterway system.
            By maintaining this level of appropriations for the next 10
            years, the surplus in the Trust Fund can be reduced to more
            appropriate levels. Timely completion of these required
            navigation projects would accelerate the national economic
            benefits from the projects, minimize cost increases and ensure
            a viable and reliable national waterways system.
      --The fiscal year 2004 appropriations for the Corps' General
            Investigations account should be increased to $154.4 million,
            the same level as appropriated in fiscal year 2002. The
            proposed fiscal year 2004 level of $100 million will not permit
            the Corps to undertake any new studies. These studies are
            critical to ascertaining and developing future projects that
            will be needed to maintain and improve our system. It takes
            time to complete these projects and while there are issues
            related to new construction starts, projects should be in the
            pipeline and ready should funds be available.
      --The fiscal year 2004 proposed funding in the amount of $1.939
            billion for the Corps' Operations and Maintenance functions
            should be increased. At the end of fiscal year 2003, it was
            estimated that critical maintenance backlog was $884 million.
            Of the total, $534 million is navigation's share with $364 for
            inland waterways. Currently, 53 percent of the locks and dams
            operated by the U.S. Army Corps of Engineers are 50 years or
            more. With the constraints related to funds for new
            construction and rehabilitation, it is imperative that existing
            locks and dams are maintained. Delaying necessary maintenance
            impacts the ability to move commerce efficiently, exasperates
            further deterioration and accelerates the need for major
            rehabilitation and possibly at higher costs than necessary.
            Further comments and specific project recommendations are
            outlined below.
                       budget proposals supported by nma
        NMA strongly supports the administration's fiscal year 2003 budget
    proposal to increase funding for two priority projects: the Olmsted
    Locks and Dam on the Ohio River (between Illinois and Kentucky) and the
    Marmet Locks and Dam on the Kanawha River in West Virginia. The
    proposed fiscal year 2004 funding level for Olmsted of $73 million,
    which is the efficient funding level for the project, illustrates the
    approach that should be taken for other priority projects as well. This
    level will reduce any further construction delays resulting in delayed
    economic benefits for the country. While Marmet is not at the efficient
    funding level, the appropriations level is significantly more than
    fiscal year 2003 and is recognition of the importance of the project.
        Following the testimony is a list of projects that NMA supports for
    additional appropriations to permit efficient funding schedules. By
    appropriating funds at the level to permit efficient funding schedules,
    the backlogs will be reduced and the Nation will be able to realize the
    economic benefits that were projected when these projects were
    authorized. The list also contains recommendations for additional funds
    for preconstruction, engineering and design and surveys.
                                     ports
        Our Nation's ports and harbors provide the critical link in our
    marine transportation system that provide U.S. shippers, both importers
    and exporters, with options that maximize their ability to compete and
    remain competitive in a global marketplace. U.S. deep-draft commercial
    ports handle over 95 percent of the volume and 75 percent of the value
    of cargo moving in and out of the United States. For the U.S. mining
    industry, coal, iron ore, phosphate, and other minerals move to export
    out of U.S. ports. In addition, minerals critical to the United States
    are imported through our ports. Unfortunately, many of these minerals
    could be produced in the United States but current policies are making
    it increasingly difficult for U.S. mineral companies to remain in the
    country. By providing the United States with much needed minerals from
    domestic sources, our reliance on imports would be reduced and equally
    important new jobs would be created contributing to the country's
    economic strength.
        The proposed fiscal year 2004 budget proposes only $212 million,
    which represents less than half of the $430 million necessary to fund
    ongoing and new projects for deep-draft harbors. As with inland
    waterways projects, failure to maintain optimal schedules increase
    costs and delay project benefits.
                                   conclusion
        NMA strongly opposes the administration's proposals to expand the
    IWTF to cover 25-50 percent of operation and maintenance costs and the
    expansion of the HMTF to cover deep-draft construction costs. In
    addition, we are concerned that the administration continues to propose
    funding levels for our inland waterways system that will continue to
    have very negative impacts on the system. As a country we cannot afford
    to neglect the continued improvement and maintenance of our Federal
    navigation system. Failure to continue our investment and commitment to
    all aspects of our marine system will have serious long-term
    consequences for our Nation's economic health, safety and security.
      nma's fiscal year 2004 appropriations request for inland waterways
                                    projects

             FISCAL YEAR 2004 APPROPRIATIONS LEVELS SUPPORTED BY NMA
                                  [In millions]
    ------------------------------------------------------------------------
                                               Fiscal Year      Efficient
                                              2004 Request    Funding Level
    ------------------------------------------------------------------------
    Olmsted Lock and Dam...................         $73                $73
    Greenup Lock and Dam...................           2.895              3
    Ohio River Mainstem Study..............           1.35               1.5
    ------------------------------------------------------------------------

     fiscal year 2004 project appropriation levels needing additional funds
    Construction and Rehabilitation
                McAlpine Locks Replacement Project--Fiscal Year 2004
                        Request: $26.1 million, Efficient Funding Level:
                        $70 million
        Located in downtown Louisville, Kentucky and near Jefferson,
    Indiana, the project provides for a new 1,200 lock that will replace
    an inactive 56360 lock and a 110600 auxiliary lock. According to
    the U.S. Army Corps of Engineers Waterborne Commerce Statistics for
    2001, more than 55 million tons of commodities valued at nearly $11.7
    billion were shipped through the locks. Coal was the leading commodity,
    comprising 37 percent of all shipments. Of the 20 million tons of coal
    moving through McAlpine in 2001, 13 million tons went to 30 power
    plants in 8 States. Kentucky received the most tonnage with 12.6
    million tons valued at $1.6 billion and coal was the top commodity
    received in Kentucky. The total project cost is $278 million. The
    project is 6 years behind schedule with a current loss of $245 million
    in benefits.
                Locks and Dams 2, 3, and 4--Fiscal Year 2004 Request: $35
                        million, Efficient Funding Level: $61 million
        Located on the Monongahela River near Pittsburgh, Pennsylvania this
    project replaces some of the oldest structures (some parts are more
    than 100 years old) operating in the inland system. The extreme
    structural deterioration of Dam 2 and Locks 3 and Dam 3 are of major
    concern. According to the U.S. Army Corps of Engineers Waterborne
    Commerce Statistics for 2001, almost 22.2 million tons of commodities
    valued at $1.7 billion were shipped through any or all of the locks.
    Coal comprised 86 percent of the tonnage moving through the locks. Of
    the 19.2 million tons of coal moving through the locks, more than 7.2
    million tons went to 23 power plants in 7 States. The value of the coal
    was almost $1.6 billion. Pennsylvania received and shipped the most
    tonnage through the locks with coal the No. 1 commodity. Construction
    began on the $750 million project in 1994 and is scheduled for
    completion in 2010. The project is 6 years behind schedule with a
    current loss of $134.6 million in benefits.
                Marmet Locks and Dams--Fiscal Year 2003 Request: $52.154
                        million, Efficient Funding Level: $69.2 million
        Located on the Kanawha River near Belle, West Virginia this project
    includes the construction of an additional 110800 lock landward of
    the existing smaller dams, which would be converted to auxiliary
    status. According to the U.S. Army Corps of Engineers Waterborne
    Commerce Statistic for 2001, 17.1 million tons of commodities valued at
    $802 million were shipped through the locks. Coal shipments comprised
    95 percent of all shipments with 16.1 million tons moving through
    Marmet. West Virginia shipped the most tonnage with 16.4 million tons
    valued at $665 million. Ohio received the most tonnage with 6.4 million
    tons valued at $245 million. For both States, coal was the No. 1
    commodity shipped. The project cost is $313 million. Originally
    scheduled to be completed in 2007, it will not be completed until 2010
    with a current loss of benefits of almost $118 million.
                Kentucky Lock--Fiscal Year 2004 Request: $24.8 million,
                        Efficient Funding Level: $53 million
        Located on the Tennessee River near Grand Rivers, Tennessee this
    project includes the addition of a 1101,200 lock and the relocation
    of an existing railroad, highway and powerhouse access road. According
    to the U.S. Army Corps of Engineers Waterborne Commerce Statistics for
    2001, almost 35 million tons of commodities valued at $6.2 billion
    moved through Kentucky Lock. Coal was No. 1 commodity with 12.6 million
    tons or 36 percent of all shipments. The value was almost $500 million.
    Of the total coal shipments nearly 10 million tons moved to 9 power
    plants. Construction began on this project in 1999 and the total cost
    of $533 million. The project is now scheduled to be completed in 2010
    (originally 2008) with a current loss of $75 million in benefits.
    Preconstruction Engineering and Design
                J.T. Myers Locks and Dam--Fiscal Year 2004 Request: $0,
                        Efficient Funding Level: $2 million
        The John T. Myers Locks and Dam located on the Ohio River about
    3\1/2\ miles downstream from Uniontown, KY. The John T. Myers and
    Greenup Locks Improvements Interim Feasibility Report, a product Ohio
    River Mainstem Study, recommends a 600 extension of the auxiliary
    chambers at both locations along the Ohio River. This project was
    authorized in the Water Resources Development Act of 2000. The expected
    cost is $225 million with a benefit/cost ratio of 1.8 to 1. According
    to the U.S. Army Corps of Engineers Waterbourne Commerce Statistics for
    2001, over 75 million tons of commodities were shipped through the
    project with a total value of $13.8 billion. Coal comprised almost 33
    million tons or 44 percent of all shipments. Most of the coal went to
    31 power plants in 8 States. Louisiana shipped the most commodities
    with iron and steel No. 1 at almost 21 million tons. Indiana received
    the most commodities with coal being No. 1 at 16.1 million tons.
    Surveys
                Emsworth, Dashields & Montgomery Lock and Dams--Fiscal Year
                        2004 Request: $0, Efficient Funding Level: $1.5
                        million
        As the uppermost navigation projects on the Ohio River (located
    downstream of Pittsburgh, PA), these three projects have main lock
    chambers measuring 600100 and auxiliary locks of 36056. The main
    chambers are one-half the size of the standard chamber (1,200110) on
    the Ohio River and the auxiliary locks are one-fourth the standard
    auxiliary locks (600100). Major remedial work was done in the 1980s
    at a total cost of more than $100 million. The work was designed to
    extend the life of the projects to the 2005-2010 timeframe. In order to
    look at all of the problems and needs associated with the three
    projects, Congress authorized and provided funding for a detailed
    feasibility study.
                                     ______

          Prepared Statement of the Midwest Area River Coalition 2000
        Mr. Chairman and Members of the Committee, I am Christopher
    Brescia, President of the Midwest Area River Coalition 2000 (MARC
    2000). Thank you for the opportunity to submit MARC 2000's views on the
    needs of the Mississippi Valley and especially the Upper Mississippi
    River Basin for fiscal year 2004.
        MARC 2000 supports full efficient funding levels for the Upper
    Mississippi/Illinois River Navigation Feasibility Study and key major
    rehabilitation projects on the Upper Mississippi/Illinois Rivers,
    including the Environmental Management Program (EMP). We would like to
    specifically highlight the increasing backlog of navigation-related
    operation and maintenance projects in the entire Mississippi River
    Valley. MARC 2000 rejects the call to raid the Inland Waterway Trust
    Fund (Trust Fund) for purposes other than it was originally created.
         upper mississippi/illinois river navigation feasibility study
        This study is the most important ``project'' for the Upper
    Mississippi River Basin. Full efficient funding is critical to keep
    this study from falling even further behind. Re-initiation of the study
    along broader parameters has increased the cost once again. Every year
    we fail to complete this work adds burden to the system and increases
    the risk of failure of these 70-year-old lock and dam structures.
        MARC 2000 requests an increase to the President's request for a
    total of $7.216 million for this study in fiscal year 2004 to keep the
    study on schedule. Alternatively, $3.8 million in fiscal year 2003
    supplemental funds along with the President's $3.216 fiscal year 2004
    request would be an even more efficient funding stream. This is the No.
    1 priority of our coalition.
        Linked to this study is the need to begin PED for both 1,200 lock
    design and enhanced environmental restoration. MARC 2000 urges the
    appropriation of $8 million for this very important effort in providing
    a seamless process and for not falling further behind in assuring the
    region of a modernization program.

                                                       [In millions]
    ----------------------------------------------------------------------------------------------------------------
                          General Investigative                       Budget Request   Needed Amount     Variance
    ----------------------------------------------------------------------------------------------------------------
    Upper Miss Nav. Study...........................................          $3.216          $7.216          $3.8
    Comprehensive Plan..............................................            .494           2.6             2.106
    Upper Miss/Illinois PED.........................................           0               8.0             8.0
                                                                     -----------------------------------------------
          Subtotal..................................................           3.710          17.616          13.906
    ----------------------------------------------------------------------------------------------------------------

        Addressing these functions immediately, as we approach the close of
    the study phase, prepares us for Congressional authorization for large-
    scale construction for the basin. Waiting until the study's completion
    to address design work causes at least 2 more unnecessary years in
    elevated competitive risk, a problem recognized in WRDA'99.
        While this study evaluates navigation needs and environmental
    restoration options for the basin, conclusion of the Comprehensive
    Plan, along with full efficient funding, is needed so the Basin can
    evaluate all aspects including: navigation, flood control and
    environmental restoration.
                 construction general and major rehabilitation
        The lock and dam system on the Upper Mississippi, once considered a
    flagship for the Nation's principal artery, the Mississippi River, is
    virtually crumbling in some cases.
        MARC 2000, in concert with the Inland Waterway Users Board,
    supports full efficient funding for key priority projects already
    underway, with priority given to Lock and Dam 24 at $17.2 million
    (+$4.2 million); Lock and Dam 11 at $6.5 million (+$5.187) and Lock and
    Dam 3 at $.6 million. A congressionally approved fiscal year 2003 new
    start at Lock and Dam 19 and a fiscal year 2004 new start at Lock and
    Dam 27 need attention this year as well. Funding for EMP has met
    requested levels, ensuring its credibility for fiscal year 2004.

                                                       [In millions]
    ----------------------------------------------------------------------------------------------------------------
              Construction General and Major Rehabilitation           Budget Request   Needed Amount     Variance
    ----------------------------------------------------------------------------------------------------------------
    Lock & Dam 24...................................................         $13.00          $17.20           $4.2
    L&D 11..........................................................           1.313           6.50            5.187
    L&D 3...........................................................            .6              .6             0
    L&D 19..........................................................           0               1.2             1.2
    L&D 27..........................................................           0               6.0             6.0
    Environmental Management Program................................          33.320          33.320           0
                                                                     -----------------------------------------------
          Subtotal..................................................          51.943          78.636          26.690
    ----------------------------------------------------------------------------------------------------------------

        As indicated in the preceding table, construction and general
    rehabilitation funding is severely lacking with an additional need of
    $26.690 million in fiscal year 2004. Consistent under funding by the
    President's budget results in inefficient timelines, extended
    schedules, delayed projects, and broken commitments from our Federal
    Government, and the loss of benefits to the Nation from an efficient
    inland waterway system.
                           operations and maintenance
        The President's budget continues to place a strain on the
    operations and maintenance (O&M) of the system. One example of this is
    the failure to fund an additional $26 million in non-deferrable
    maintenance and operations services, work that is essential to keeping
    the program working properly.

                                                       [In millions]
    ----------------------------------------------------------------------------------------------------------------
                       Operations and Maintenance                     Budget Request   Needed Amount     Variance
    ----------------------------------------------------------------------------------------------------------------
    Miss. River--StL................................................         $35.473         $38.00           $2.527
    Miss. River--Rock Island........................................          44.429          54.429          10.00
    Miss. River--St. Paul...........................................          36.056          45.405           9.394
    Illinois River..................................................          27.615          31.915           4.3
                                                                     -----------------------------------------------
          Subtotal..................................................         143.573         169.749          26.176
    ----------------------------------------------------------------------------------------------------------------

        Funding support for Operations and Maintenance has been lacking for
    the last 5 years. The result is an accumulated backlog of critical
    maintenance on the Upper Mississippi approaching $200 million in
    navigation needs alone. As O&M allotment fails to address the
    maintenance of our region's lock & dam sites, we face the greater risks
    of lock closures and the hundreds of millions of dollars costing the
    Nation via tows waiting for repairs to lock gates, chambers, and other
    parts of the system.
                                critical backlog
        An issue of paramount importance to the entire inland navigation
    system is new safety-imposed de-watering requirements for locking
    chambers. The recently discovered need to establish bulkheads at
    virtually every lock in our system will compound the resource
    allocation of existing dollars without additions to the President's
    Budget. At least $81 million is needed in the Mississippi Valley to
    address these concerns in fiscal year 2003-fiscal year 2005. The
    inability to de-water a lock resulting from emergency closures or
    winter rehabilitation work could bring the Mississippi River to a
    standstill.
                 oppose raiding the inland waterway trust fund
        Even more disconcerting than lack of funding support and a growing
    backlog is the proposed raid of the Inland Waterway Trust Fund to be
    reallocated to O&M needs. This fuel tax depository, founded over 20
    years ago, was a result of a unique agreement between the Federal
    Government and industry to establish a funding mechanism for costs
    toward major construction of our infrastructure. Through the years,
    industry has contributed more than a billion dollars into this fund,
    into which over $400 million now sits while we await the conclusion of
    the navigation study, and lose world market opportunities.
        Proposals to use these dollars to cover 25 percent-50 percent of
    the cost of O&M will eliminate the balance of the fund in just 2\1/2\
    years, exactly when an Upper Mississippi Basin modernization plan
    should be in place and begin to utilize those dollars for the purpose
    for which they were intended. The implications of this trust fund raid
    would also require additional .30-.40 cents per gallon to meet O&M
    needs alone, or a 200 percent tax increase. The Inland Waterway Trust
    Fund must be reserved for its original purpose. Anything less
    constitutes a violation of the agreement and trust forged between the
    Federal Government and industry in a good faith effort to ensure the
    future of our inland waterways.
                                     ______

     Prepared Statement of the Moss Landing Harbor District, Monterey Bay,
                                   California
        Mr. Chairman and Members of the Subcommittee, on behalf of the
    Chairman and Members of the Board of Harbor Commissioners, thank you
    for the opportunity for me, Russell Jeffries, as President of the Board
    of Harbor Commissioners of Moss Landing Harbor District in California
    to submit prepared remarks to you for the record in support of the
    fiscal year 2004 Energy and Water regular appropriations measure.
        The Commission recognizes and expresses its gratitude to our local
    Congressman, the Honorable Sam Farr, a valued member of the
    Appropriations Committee for his continued assistance and support on
    our behalf.
        We express our profound appreciation to the Subcommittee and full
    Committee for its inclusion of approximately $2.750 million in fiscal
    year 2002 funds for periodic maintenance dredging of the federal
    entrance channel and the initiation of a first-ever Dredged Material
    Management Plan (DMMP) for the Harbor District in order to plan for
    orderly maintenance dredging of the federal channel and local berths
    over the next twenty or more years. This effort is supported by a
    working group organized under national dredging team local planning
    guidance, including representatives of the federal, state and local
    agencies, and other stakeholder and public interest groups with an
    interest in dredging activities.
        To put our needs in proper perspective, our geographical location
    and marine ecosystem is unique in that the harbor district is located
    at the confluence of the Pajaro and Salinas Rivers in between two
    national treasures--the Monterey Bay National Marine Sanctuary and the
    Elkhorn Slough National Estuarine Research Reserve--precluding most
    potential upland disposal sites. The SF-12 Aquatic Disposal Site is
    grandfathered for sanctuary purposes. It is located fifty yards
    offshore at the apex of the Monterey Bay Submarine Canyon which plunges
    to a depth of 8,000 feet in less than one mile. Every year deposition,
    erosion, and flushing cycles transport thousands of tons of sedimentary
    material down the canyon like a chute--so much so that our dredged
    material is a miniscule amount measured against the total annual
    flushing event.
        Periodic El Nino events deposit trace elements of DDT in our harbor
    sediments traced to Salinas Valley agriculture--America's salad bowl--
    as a natural sink. With no realistic long term alternative--including
    upland disposal--to continued use of our current disposal site, our
    very livelihood as the largest fishing port on the central coast and
    largest concentration of marine scientific research south of Seattle,
    is at stake.
        Of amounts previously appropriated, approximately $2.4 million has
    been expended for maintenance dredging to date and $350,000 has been
    expended to begin the DMMP process. Most of that was transferred to the
    Corps of Engineers Waterways Experiment Station (WES) to prepare a
    preliminary Ecological Risk Assessment (ERA). We expect that something
    on the order of $1,250,000 will belatedly emerge in operations and
    maintenance funds in the fiscal year 2003 budget. Much of that has
    already been expended or will be used to reimburse the San Francisco
    District for program management costs, conduct of the required economic
    analysis (including of a finding of a very favorable current benefit
    cost ratio of 1.7 to 1), DMMP plan formulation and project scoping
    (including alternative upland disposal site analysis), and technical
    support to WES.
        The completion of both the federal channel work and the Inner
    Harbor with a combination of beach replenishment and ocean disposal at
    the SF-12 historic disposal site marks the first time in a decade that
    we have returned to a normal three year maintenance cycle of the
    federal channel.
        We are just now embarking on the heart of the ERA process defining
    a preliminary statement of work, identifying data gaps to drive the WES
    model, and initiating complementary local site-specific scientific
    studies, and with those results completing the remainder of the DMMP
    process.
        To this end we request the Subcommittee's approval of $2.0 million
    in appropriations from the Operations and Maintenance General Account
    in fiscal year 2004 in order to complete the Ecological Risk Assessment
    and Dredged Material Management Plan so that the process is completed
    and plan implemented prior to the next periodic maintenance event
    scheduled to occur in fiscal year 2005.
        With the assistance of the local scientific community, we are
    fortunate to have as much as three years of scientific data in the form
    of benthic community biomass and tissue sampling, and first-ever
    nearshore state-of-the-art bathymetric survey of the disposal site and
    Monterey Bay Canyon. These efforts should prove invaluable in measuring
    before and after direct impacts of dredged material disposal at the
    disposal site.
        With the assistance of the San Francisco district, we were
    determined to take advantage of this year's dredging episode to do
    before and after measurement of both sedimentary transport at the
    disposal site and to measure any direct impacts on benthic
    communities--the source of any bioaccumulation of contaminated
    sediments in trace amounts. It appears that this will now occur with
    district support as we proceed to the use of current dredging activity
    as an experiment involving approximately 20,000 cubic yards from which
    we can derive valuable data.
        Despite the drastic differences between the use of the WES ERA
    model adapted from aquatic Mississippi River application and our unique
    submarine canyon ecosystem and volume of material, the district has
    elected to proceed with a tracer study using European technology that
    may be of help in other areas with similar problems. We now recognize
    that we must undertake local site-specific data collection and studies
    to complement the WES activities or the end result will not be a
    document that will prove persuasive to the greater scientific
    community, federal and state regulatory agencies, and an informed and
    involved public in our community.
        We now know that there is a considerable body of unpublished
    relevant data concerning the Monterey Bay Canyon and the impact, fate
    and effect of sedimentary material transport in the hands of the local
    scientific community that must be collected, catalogued, analyzed, and
    used both as input data and for comparison with the WES model so that
    each can operate as an invaluable countercheck on the output results of
    the other in predicting and directly measuring the impacts of dredged
    material disposal at our ocean disposal site.
        We have agreed with the district that in order to remove any
    potential bias in data interpretation, an independent scientific peer
    review group will be convened utilizing EPA guidelines for ERA review
    to oversee this process.
        The next periodic maintenance cycle would normally occur in fiscal
    year 2005. We do not anticipate either another El Nino event on the
    heels of the last severe one. Beyond completion of the ERA and gap
    filling scientific research and peer review, a significant part of the
    DMMP process is the identification and evaluation of potential upland
    disposal sites of which there are few choices in our situation.
    Nonetheless a long lead time would be necessary in our situation, front
    end funding of which would necessarily be a part in order to complete
    the DMMP process in exhaustive fashion.
        From our perspective the better job we do completing the DMMP/ERA
    process now in developing a persuasive case to the various
    constituencies as a decision document supporting continued aquatic
    disposal for all but a very small fraction of total dredged material in
    exceptional circumstances over the twenty year span of the study will
    save significant amounts of scarce federal and local dollars in the
    future . . . that said, we sincerely hope our experience in this effort
    will:
      --Produce both a useful and practical multidisciplinary decision
            document for those agencies exercising regulatory or oversight
            jurisdiction over dredging in both our and other settings; and
      --Serve as a model for collaborative effort in dredged material
            disposal consensus decisionmaking in unique situations such as
            for other Corps districts and local sponsors seeking to balance
            required maintenance dredging to support navigation with the
            corresponding need to protect environmentally sensitive areas,
            in this instance the unique Monterey submarine canyon located
            at the heart of the Monterey Bay Marine sanctuary.
        I am prepared to supplement my prepared remarks for the record in
    response to any questions that the Chair, Subcommittee Members, or
    staff may wish to have me answer. Thank you Mr. Chairman and Members of
    the Subcommittee. This concludes my prepared remarks.
                                     ______

                  Prepared Statement of the Port of Garibaldi
        Mr. Chairman and members of the Subcommittee, my name is Carol
    Brown. I am one of three elected Commissioners of the Port of
    Garibaldi, Oregon, located on Tillamook Bay on the Oregon Coast. We are
    thankful for the support provided by the Committee for fiscal year 2002
    and 2003, and we also appreciate the opportunity to present our views
    on fiscal year 2004 appropriations issues.
                             appropriations request
        The Port of Garibaldi requests an $8,000,000 appropriation for
    operations and maintenance (O&M) of Tillamook Bay and Bar, Oregon.
    These funds will allow the U.S. Army Corps of Engineers' (Corps)
    Portland District begin the protection, restoration and repair of the
    Tillamook Bay North and South Jetties. Specifically, the funds will
    allow the Corps to build a revetment near the North Jetty root, and
    perform additional restoration and repair work on the South Jetty.
        The Committee provided an additional $200,000 for a Major
    Maintenance Report in fiscal year 2002, and an additional $300,000 for
    Plans and Specifications in fiscal year 2003. Both of these
    appropriations were made above the Administration's budget requests for
    the project. The Major Maintenance Report is nearly complete, and the
    Corps will begin Plans and Specifications soon after the completion of
    the report. We believe that the total cost to protect, restore and
    repair the jetties will be $10-$15,000,000. The Administration did not
    request funding for this project for fiscal year 2004.
                    report on the tillamook bay jetty system
        There are serious problems with both jetties. The Corps' recent
    engineering analysis demonstrates that erosion on the north side of the
    North Jetty continues at a highly accelerated rate. Frequently, the
    U.S. Coast Guard (USCG) pulls its crewmembers out of the tower located
    near the root of the North Jetty because of the threat of a jetty
    breach at that site during periods of high seas. Should the breach
    occur, shellfish beds, a county park and a state highway would sustain
    severe damage. The USCG has also determined that deterioration of the
    South Jetty has created a dangerous threat to navigation safety.
        A functional Tillamook Bay Jetty System is key to maintaining
    navigation safety, protecting both public and private property and the
    environment, and preserving the economic vitality of the Oregon Coast.
        In December 2000, The Board of Commissioners of the Port of
    Garibaldi and Tillamook County prepared a report on the Tillamook Bay
    jetty system and bar to inform legislators and other concerned parties
    of the need to restore the jetties and their bar to safe, acceptable
    engineering standards. Excerpts of that report are included below.
        There are three major issues currently associated with the
    deterioration of the system.
      --There is a clearly documented increasing hazard to navigation from
            erosion around the ocean ends of both jetties and resultant
            damage to the bar, which is causing an escalating loss of life
            in boating accidents every year.
      --There is a potentially significant loss of landmass containing
            recreational facilities and permanent structures in one area
            where the North Jetty has already breached near its root.
      --There is data currently being collected (but incomplete at this
            time) which suggests a possible relationship between the
            deteriorated condition of the jetties and bar and the degree of
            flooding in some land areas surrounding Tillamook Bay.
        The report contains a history of construction and repair of the
    jetties by the Corps, an overview of construction and repair results, a
    summary of an independent engineering report solicited by the Port and
    the Corps' own evaluations of the jetties' present condition, reasons
    for restoration of the jetties and bar, and the Commissioners'
    endorsement of repair of the jetty system and bar as both an urgent
    public safety measure and possible contribution to mitigation of
    flooding in the estuary. We will provide a copy of the report to the
    Committee upon request.
        Background.--Since settlement in the 1800s, Tillamook County's
    primary industries have been dairy, water and timber oriented.
    Tillamook Bay and the five rivers which feed it have historically
    furnished an abundance of shellfish, salmon and other species of fresh-
    water and ocean food fish. Over the past century the area has become
    renowned as one of the West's premier sport fishing locations.
        Tillamook County's economy has always depended on prime conditions
    in Tillamook Bay, its estuary and watershed for cultivation and use of
    these natural resources. However, human activities including forestry,
    agriculture and urban development have adversely impacted the entire
    Bay area by increasing erosion rates and landslide potential in the
    forest slopes and significantly reducing wetland and riparian habitat.
    All five rivers entering Tillamook Bay now exceed temperature and/or
    bacteria standards established by the Oregon Department of
    Environmental Quality. The installation of a north jetty on Tillamook
    Bay begun in 1912 caused increased erosion of the Bay's westerly land
    border, Bayocean Spit, on the ocean side. The Spit breached in 1950.
    This allowed the Bay to fill with ocean sands on its southern and
    western perimeters and caused a major reduction in shellfish habitat,
    sport-fishing area, and an increase in the cross-section of the bar. A
    south jetty begun in 1969 helped stabilize the Spit and created the
    navigation channel presently in use.
        Increasingly poor water quality in the Bay's feeder rivers and a
    substantial loss of marine life over the past twenty-five years enabled
    Tillamook Bay to become part of the National Estuary Program in 1992.
    The Project's scope of study included the estuary and watershed. One of
    the stated goals in the Project's final Comprehensive Conservation and
    Management Plan is ``the reduction of magnitude, frequency and impact
    of flood events.'' This goal was found to be consistent with the scope
    of study of the Corps' Feasibility Study for Water Resources in
    Tillamook County now being conducted, and was incorporated into this
    new project.
        Previous Corps' evaluations of jetty systems clearly state the
    adverse effects of jetty deterioration and infilling of channels and
    bars on tidal prism (the rate at which water flows into and out of the
    Bay) and indicate that they may influence flooding in a bay's estuary.
    During the past thirty-six months measurements have been taken of
    differential water levels in Tillamook Bay and its estuary and speeds
    of tidal flows during normal and high water events. This data suggests
    an increase in the cross-section of the Tillamook Bay bar and some
    channel infilling, which may be affecting estuarine flooding. These
    measurements are of stated interest to the Corps. The Port of
    Garibaldi, many Tillamook County businesses that have been victims of
    flooding, and some governmental agencies concerned with various aspects
    of the flooding issue are supporting continuing gathering of these
    measurements of water levels and tidal flow speeds.
        While the conditions of jetties and their resultant bars invariably
    and continually affect the bay on which they are constructed, their
    basic function is the creation of a safe channel between ocean and
    harbor for the transit of maritime traffic. As originally designed and
    constructed, the Tillamook Bay jetties accomplished this. Due to their
    present state of deterioration, that initial effectiveness has been
    substantially reduced.
        Results in Brief.--Tillamook County has suffered a series of
    devastating floods since the winter of 1996. The storms caused by El
    Nino/La Nina events have increased the rate of deterioration of
    Tillamook Bay's jetties and bar. Their present condition is raising
    increasing navigational safety issues. The North Jetty is now breached
    in an especially sensitive location near its root where the wall
    protects inhabited land, and the eroded area is increasing in size. A
    significant quantity of water flowing through this area would result in
    loss of the existing landmass adjacent to it and the structures on it.
    A second area of deterioration on the North Jetty at the beach line is
    threatening to breach. But in either location, an infill of the channel
    with sands would reduce the navigability of the channel, further slow
    the rate of tidal flow and impact the cross-section of the bar. An even
    greater degree of danger to boaters than that which presently exists
    would surely be created.
        The Bayocean Spit breach in 1950 buried one-third the Bay's
    shellfish habitat under ocean sands and did extensive damage to
    estuarine lands. The lost shellfish habitat has never been recovered.
    The direction of tidal flow in the Bay is such that a breach in the
    North Jetty would cause additional buildup of ocean sands to the inside
    edge of the Spit. This infill would eventually deposit toward the south
    end of the Bay and demolish even more shellfish habitat and sport
    fishing area, adversely impacting Tillamook County's already reduced
    economy. The harbor area would certainly suffer some degree of damage,
    resulting in increased commercial hardship.
        But the most serious impact of jetty and bar deterioration has been
    on navigational safety. The USCG Tillamook Bay Station has publicly
    commented on the threat of a jetty breach to its observation tower, and
    transit danger to sport, commercial and their own vessels due to
    erosion effects, which now constitute a maritime hazard. Many local
    sport and most commercial fishermen have abandoned Garibaldi as a
    permanent berth and sought harbor facilities where channel navigation
    is easier and transit of the bar less treacherous. The USCG has
    formally requested that the Corps ``restore the north and south jetties
    to their original dimensions, and remove materials from the original
    construction that may now pose a maritime hazard.''
        Principal Findings.--Since the last repair to the South Jetty,
    approximately 302 feet have been lost to erosion, 215 feet of that
    amount since 1998. The North Jetty was designed and authorized by the
    USACOE to be 5,700 feet in length. As of December 2000, approximately
    275 feet of the ocean end of the North Jetty is eroded and remains
    below mean lower low water level--submerged, in other words. In 1990
    the USACOE capped the head of the North Jetty from its above-water
    point going landward for a distance of 161 feet in an unsuccessful
    attempt at erosion control. The North Jetty remains at least 300 feet
    short of its engineering-approved and authorized length. In the spring
    of 2001, the Corps put in place temporary barriers to provide support
    to the North Jetty at the root. These temporary barriers have largely
    eroded since that time.
        Because of the increased magnitude of storms since 1996, both
    jetties have suffered far more damage than that normally expected to
    occur to such structures. Erosion and displacement of large support
    stones at the ocean ends of both jetties is particularly severe, and
    the submerged ends of both structures are being pushed southward. The
    USCG now identifies these two areas, adjacent to popular sport fishing
    locations, as extremely dangerous locations. Water swirls around the
    displaced boulders causing eddies sometimes strong enough to suck small
    boats into them. Even in calm, flat seas, water breaks over these
    boulders into waves powerful enough to throw smaller vessels onto the
    jetties. (This was the case on September 22, 2000, when a sport fishing
    boat inadvertently drifted inside the 200 foot exclusion zone and was
    dashed onto the end of the South Jetty. Two people were killed and a
    third injured, this incident being the most recent loss of life this
    year in the accident record of the Tillamook Bay jetties and bar.)
        Conclusion.--On behalf of the Port of Garibaldi and Tillamook
    County, I thank the Committee for giving me this opportunity to provide
    testimony on the Tillamook Bay Jetty System.
                                     ______

     Prepared Statement of the Coosa-Alabama River Improvement Association
                                    summary
        Mr. Chairman & distinguished Committee members, this statement
    includes the following: A) A plea to rend maintain our Nation's inland
    waterways system as a vital part of the national transportation
    infrastructure; B) A request for support in the following areas: 1)
    Sufficient funding to maintain and improve our nation's inland waterway
    system; 2) O&M funding for federal projects in the Coosa-Alabama Basin;
    3) Funding to renovate and upgrade a recreation site on the Alabama
    River; 4) Funding to complete backlogged maintenance items to keep the
    Alabama River navigation channel a viable economic asset to the State
    of Alabama.
                               expanded statement
        The Coosa-Alabama River Improvement Association is a large and
    diverse group of private citizens and political and industrial
    organizations that sees the continued development of the Coosa-Alabama
    Waterway as an opportunity for economic growth in our region as well as
    the Nation. The attached statements from many of our members and
    interested parties in our region call for measures to assure a viable
    inland waterways system and are indicative of the strong support of the
    inland waterways system in our region of the country.
        Our Association is concerned about the deteriorating waterway
    infrastructure throughout the Nation. The waterways are vital to our
    export and import capability, linking our producers with consumers
    around the world. Barges annually transport 15 percent of the Nation's
    commodities, 1 out of every 8 tons. It is incumbent upon the Federal
    Government to maintain and improve this valuable national asset.
    Therefore, we ask Congress to appropriate funds for required
    maintenance and construction to keep the waterways the economic
    multiplier they are. To maintain the inland waterways facilities and to
    accommodate vitally needed growth will require a minimum of $5 billion.
    The Federal Government must commit to improve the waterways
    infrastructure or risk serious economic consequences and jeopardizing
    large public benefits.
        We are concerned that any budget strategy that reduces funding for
    the operations and maintenance of inland and intracoastal waterways
    will have a detrimental effect on the economic growth and development
    of the river system. We are especially concerned about the President's
    direction to direct funding away from those waterways suffering
    temporary downturns in barge transportation. We cannot allow that to
    happen. In the Alabama-Coosa River Basin, we must be able to maintain
    the existing river projects and facilities that support the commercial
    navigation, hydropower, and recreational activities so critical to our
    region's economy. The first priority must be the O&M funding
    appropriated to the Corps of Engineers to maintain those projects.
        The President's Budget for fiscal year 2004 does not provide enough
    funding to keep the Alabama River navigation channel open. Most
    conspicuous is the absence of money for dredging, a vital element of
    keeping the channel operational. We ask Congress to reinstate the
    dredging capability on the Alabama River by adding $3 million for
    dredging on the Alabama-Coosa River project. Without dredging, the
    channel is vulnerable to being closed for several months of the year.
    Without the channel, the State of Alabama has no hope of attracting
    prospective users of barge transportation in the Alabama River basin,
    which traverses counties with some of the highest unemployment in the
    Nation. We cannot close any opportunities to bring jobs to these
    counties. Several prospective barge-using shippers (representing 3 to 4
    million tons a year) are currently evaluating the Alabama River basin
    for relocating or expanding their businesses. A fully-maintained
    channel is crucial to their decision. Maintaining the channel also
    dampens the rail and truck prices for movement of goods between Mobile
    and Montgomery. The relatively small investment in this channel pays
    large dividends for the consumers and businesses in Alabama.
        Recreation is a major economic factor on our waterways. Boating,
    fishing, swimming, and camping have become an indispensable economic
    tool for many of our lake and river communities, and, in that respect,
    the Alabama River has extraordinary potential. One of the most
    promising sites for development is the Corps-owned Swift Creek
    campground. Now a minimally developed site, Swift Creek needs to be
    upgraded and renovated to serve an ever-increasing demand for
    recreational facilities on the waterway. We ask that $1.5 million be
    added to the RF Henry project to renovate and upgrade Swift Creek.
        Studies predict international trade, particularly with Latin
    America, over the next 20 years will double or even triple current
    levels of activity. Containerized cargo is expected to increase
    dramatically as shippers move away from break bulk shipping and realize
    the economies of moving goods in containers. The primary method of
    moving that cargo out of the Port of Mobile is by truck and rail. There
    is limited capacity to increase rail. Our highways cannot accommodate
    the expected increase in truck traffic. The only logical, safe, and
    environmentally-friendly alternative mode of transportation is by
    water. With Montgomery sitting at a junction of road, rail, air, and
    water modes, it makes sense to evaluate the feasibility of an
    intermodal port in the Montgomery area. We ask the Committee to include
    $100,000 in General Investigations to allow Mobile District of the U.S.
    Army Corps of Engineers to conduct this study, which was authorized by
    resolution (Docket 2699) in July 2002 by the House Transportation and
    Infrastructure Committee of the 107th Congress.

    ----------------------------------------------------------------------------------------------------------------
                                                                                                       Association's
                                                                        Fiscal Year     President's     Fiscal Year
                                 Project                                   2003        Budget Fiscal    2004 Budget
                                                                       Appropriation     Year 2004        Request
    ----------------------------------------------------------------------------------------------------------------
    Alabama-Coosa River, AL \1\ (AL River incl Claiborne L&D).......      $3,174,000      $2,961,000      $5,961,000
    Miller's Ferry L&D..............................................       7,094,000       5,429,000       5,429,000
    Robert F. Henry L&D \2\.........................................       5,858,000       5,726,000       7,326,000
    Lake Allatoona, GA..............................................       6,456,000       6,000,000       6,000,000
    Carters Lake, GA................................................       9,958,000      10,012,000      10,012,000
                                                                     -----------------------------------------------
          Totals....................................................      34,413,000      30,128,000     34,728,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes dredging from the mouth of the Alabama River through Claiborne L&D to Miller's Ferry. Coosa River
      not included. The Fiscal Year 2004 Budget Request includes funding for maintenance dredging to keep the
      Alabama River navigation channel open.
     \2\ Fiscal year 2004 request includes $1.5 million for upgrade and rehabilitation of Swift Creek campground and
      $100,000 for a Federal study to determine feasibility of an intermodal port in the Montgomery-Selma, area.

        In summary, we request your support in the following areas:
      --Sufficient O&M funding of the US Army Corps of Engineers Civil
            Works budget to maintain the Alabama River navigation channel,
            including dredging below Claiborne Dam;
      --Funding to renovate and upgrade Swift Creek campground on the
            Alabama River; and
      --Funding to evaluate the feasibility of an intermodal port in the
            Montgomery-Selma area.
        Thank you for allowing us to submit this testimony and for your
    strong support of the Nation's waterways.
                                     ______

       Prepared Statement of the Perkins County Rural Water System, Inc.
        The Perkins County Rural Water System, Inc. respectfully submits
    this written testimony to the Appropriations Sub-Committee on Energy
    and Water Development for appropriations for fiscal year 2004.
        Perkins County is located in northwestern South Dakota on the North
    Dakota State line. We are the second largest county in South Dakota and
    have a total of 2,866 square miles. Perkins County has a population of
    3,542 people, of which 2,065 live in the two incorporated towns of
    Lemmon and Bison. Number one business in our country is agriculture and
    support services for the farmer and rancher. We have three
    manufacturing plants in Lemmon that employ approximately 130-140 full-
    time jobs. Other large employers in Perkins County are Federal
    Government offices, State highway district offices, rural electric
    offices, county government, hospital and clinic and three school
    districts. Perkins County and the rest of northwestern South Dakota is
    a semi-arid climate with an annual precipitation of 14 inches, of which
    76 percent falls normally in April through September.
        History of this project goes back to 1982 when a group of farmers
    and ranchers in Perkins County were contacted by Southwest Pipeline
    project in North Dakota if they would be interested in obtaining water
    to serve Perkins County. At that time, approximately 100 farms and
    ranches and the towns of Bison and Lemmon were interested, so Perkins
    County was included in their feasibility study. In November of 1992,
    Southwest Water Pipeline Project had grown to the point that Perkins
    County was contacted about receiving water from the project and to be
    included in the engineering design work. A committee of interested
    landowners and representatives from the two incorporated towns were
    organized through the Perkins County Conservation District/Natural
    Resources Conservation Service. From this committee, nine directors
    volunteered to serve on a board to study the feasibility of rural water
    for the county. In March of 1993, Perkins County Rural Water System,
    Inc. was organized as a non-profit organization. Two grants were
    obtained from the South Dakota Department of Environment and Natural
    Resources for $50,000 each to do a feasibility study. At the same time,
    the Directors were able to acquire good intention fees from rural
    landowners, State land, Federal land, and the two towns for a total of
    $28,250 to cost share the State money on an 80-20 share basis. A
    feasibility study was conducted for Perkins County Rural Water by KBM,
    Inc. of Grand Forks, North Dakota, and the Alliance of Rapid City,
    South Dakota in 1994. In the 1995-96 South Dakota legislature, we
    obtained State authorization and appropriation of $1 million. This
    money was used to up-size the pipe in North Dakota for our capacity and
    for administration costs of Perkins County Rural Water. We have signed
    a contract with the North Dakota State Water Commission to deliver 400
    gallons per minute to the border. We have also signed contracts with
    both towns to be the sole supplier for their water systems. We have had
    a very good response from the rural farmers and ranchers in that 50 to
    60 percent have signed and paid for water contracts delivered to their
    farmstead. The total for those contracts equals $81,500 plus
    obligations of another $72,000 when the project becomes a reality. To
    the ranchers and farmers of Northwestern South Dakota, that is a
    substantial investment for them to make. We also have signed a contract
    with a grazing association that run livestock on U.S. Forest Service
    land. In the fall of 1999, we received Federal authorization with the
    106th Congress for a 75 percent grant of $20 million. We have received
    appropriations for the last two appropriation's bill in 2002 and 2003
    for $3.4 million and $4.3 million respectively. The budget presented
    has been sent to the Bureau of Reclamation in Bismarck, North Dakota to
    be entered in their budget processing for 2004.
        During our feasibility study, conducted by the combination of two
    engineering firms of the Alliance of South Dakota and KBM, Inc. of
    North Dakota, several alternatives were looked at to provide Perkins
    County with quality water. These alternatives were pumping water from
    Shadehill Lake or from deep-water wells drilled into the Fox Hills
    formation. Due to the high salt content, both of these sources would
    have to use reverse osmosis treatment that is very costly to build and
    operate. Buying bulk water from a large rural water system turned out
    to be the most feasible. Water from Southwest Water Authority is
    already treated at a large treatment plant and distributed to the
    border of North Dakota and South Dakota.
        The quality of water in Northwestern South Dakota is the main
    concern for the health and well being of the people. Although the water
    in Perkins County typically meets the primary standards established by
    the U.S. EPA, most of the chemicals in the water are exceedingly high
    by the State of South Dakota standards. Due to the fact that new
    standards by the EPA are set each year, it will be impossible for small
    water systems such as those in our towns to comply. Just across the
    line in North Dakota, two small towns have exceeded the fluoride levels
    from the same aquifer that water is pumped in South Dakota. At this
    time, fluoride in the Town of Lemmon is within one- to two-tenths of
    the MCL set by EPA through the Safe Drinking Water Act. In the deep
    wells of both Bison and Lemmon, the total dissolved solids, sulfates,
    and sodium consistently exceed the recommended levels set by EPA.
    Sodium is the major concern with the water in Perkins County. Running
    at 450 parts per million and above, the medical community has problems
    with people who have to be on a salt free diet. In the rural areas,
    bacteria contamination has been noted in wells that dug into shallow
    aquifers. The rural population has noticed declining water levels in
    these same wells due to drought and over use. We are currently in a
    drought that has dried up any surface water supplies for livestock. If
    water had been available, some ranches would not have had to sell or
    ship livestock out of the country last fall.
        Inserts include the request for fiscal year 2004. We are able to do
    this much construction work in 1 year and hope to finish the project in
    6 years with this size appropriation per year.

                                   2004 BUDGET
    ------------------------------------------------------------------------
     ------------------------------------------------------------------------
    Income:
        Bureau of Reclamation \1\...........................   $5,000,000.00
        Projected Water Sales...............................      259,000.00
        All Other Income....................................      101,000.00
                                                             ---------------
          Total Income......................................    5,360,000.00
                                                             ===============
    Expenses:
        Administrative expenses.............................      195,150.00
        O&M expenses including water purchases..............      156,500.00
        Engineering, construction, contingency..............    5,008,350.00
                                                             ---------------
          Total Expenses....................................   5,360,000.00
    ------------------------------------------------------------------------
    \1\ Request is for $5,000,000.00 in the Bureau of Reclamation Budget.

        Water quality and quantity in Perkins County has been a plague for
    the county over many years. Droughts, both long and short term, are a
    fact of life for the people in this area. Being able to obtain quality
    water during these periods and having a backup system for other times
    would make the life in the country easier. Due to our isolation from
    major water supplies, this may be our only chance to obtain water at an
    affordable cost.
        At the present time, we have finished our final engineering report,
    environmental and cultural resources reports, and, with a 50-60 percent
    signup rate, we are still signing up farmers and ranches. Upon
    obtaining the amount requested, we would be able to proceed with
    construction in the spring of 2004 and have the system completed in 6
    years. We know that funds are hard to obtain, but finding quality water
    in our area is even harder. Thank you for reading our report and, on
    behalf of the people of Perkins County South Dakota, we hope you can
    find the funds to build our system.
                                     ______

             Prepared Statement of the Pontchartrain Levee District
                   mississippi river and tributaries project

                   FISCAL YEAR 2004 RECOMMENDED APPROPRIATIONS
    ------------------------------------------------------------------------
                             Project                            Recommended
    ------------------------------------------------------------------------
    Mississippi River & Tributaries Flood Control Project...    $435,000,000
    ------------------------------------------------------------------------

                              comments on projects
        History.--The Mississippi River and Tributaries Project (MR&T) was
    authorized following the Record Flood of 1927 that inundated some
    26,000 square miles of the fertile and productive land in the Alluvial
    Valley of the Mississippi River, left 700,000 people homeless, stopped
    all East/West Commerce and adversely affected both the Economy and
    Environment of the entire Nation.
        The MR&T Project has prevented over $180 billion in flood damages
    for an investment of less that $70 billion and in addition the Nation
    derives about $900 million in Navigation Benefits each year due to the
    MR&T.
        The Project is not complete and we cannot pass another event as
    great as the 1927 Flood safety to the Gulf, this is an Historical
    Event--not the much greater Project Flood.
        Levees.--The Mississippi River and Tributaries Flood Control
    Project has been under construction as an authorized project for about
    76 years, and yet there are a number of segments not yet complete.
    Although most levees are complete to grade and section in south
    Louisiana and extensive reach from the Old River Control Structure in
    lower Concordia Parish upstream to the Lake Providence area is still
    below grade. Should these levees be overtopped during a major flood,
    those people in south Louisiana know full well those flood waters are
    going to head southward. Other items not yet complete are slope
    protection and crown surfacing. It is recommended that a minimum of
    $50,645,000 be appropriated for Mississippi River Levees.
        Channel.--The second item of indispensable importance to the
    Pontchartrain Levee District and the State of Louisiana is Channel
    Improvements. Main line levees must be protected from caving banks
    throughout this lower river reach where extremely narrow battures are
    the last line of defense against levee crevasses and failures. If
    caving banks are not controlled the only answer is ``setback''. Simply
    stated there is no room remaining for levee setbacks in the
    Pontchartrain Levee District. Revetment construction must be annually
    funded to prevent levee failures, land losses and relocations. This
    item also benefits the 55-foot depth navigation channel. The
    Pontchartrain Levee District recommends at least $44,017,000 be
    appropriated for fiscal year 2004 for Mississippi River Channel
    Improvements.
        Total Appropriation Request for MR&T.--The $435 million we are
    requesting for Fiscal Year 2004 Appropriations for the MR&T Project is
    the minimum amount we consider necessary to continue with vital on-
    going construction work and to do the barest amount of maintenance work
    that is required to prevent further deterioration of the Federal
    investment already made to our Flood Control and Navigation Work and to
    continue to work of restoring and protecting our natural environmental
    including providing for adequate water supply. The total appropriation
    we are requesting is attached.
        Opposition.--We strongly oppose the Administration's recommendation
    in its fiscal year 2004 Budget Submission to use funds from the INLAND
    WATERWAYS TRUST FUND to pay for a part of the Operations and
    Maintenance Cost of the Inland Waterways. The Trust Fund was
    established in 1978 to make available monies for Construction and
    Rehabilitation for navigation on the Inland and Coastal Waterways, not
    for Operations and Maintenance. If Congress allows this recommendation
    the Trust Fund would be drained in a short period of time and the 50
    percent share to pay for Construction for Navigation would not be
    available unless the tax on fuel used by tow-boats was raised, some day
    doubled, which would make it extremely difficult for barge operators to
    continue their operations and making it more expensive for farmers to
    get their products to market and for the public to realize savings in
    transportation cost for bulk commodities such as fuel, oil, gasoline
    and other items shipped by barge.
        We are also strongly opposed to any action that would transfer all
    or any part of the U.S. Army, Corps of Engineers Civil Works mission to
    other agencies or department of the Federal Government. It has been
    reported that the Administration would desire to transfer the Corps
    NAVIGATION program to the Department of Transportation, FLOOD CONTROL
    AND ENVIRONMENTAL RESTORATION to the Department of the Interior, and
    the REGULATORY PROGRAMS to EPA. The U.S. Army Corps of Engineers has
    rendered extremely valuable services to this Nation since 1802 (over
    200 years). The Corps has created an Inland Waterways System that is
    the envy of the rest of the world. This commercial transportation
    system is critical to the Nation's economy and environmental well-being
    and part of this system is used to deploy military equipment in support
    of the war on terrorism. The Corps has also been in the forefront to
    provide Flood Control and Environmental Restoration Projects, they have
    also supported our troops in every armed conflict this Nation has
    engaged in. It would be a serious mistake of Nation-wide impact to
    spread the functions of the Corps into several parts and across the
    Federal Bureaucracy. This Nation would lose a wonderful asset that we
    have enjoyed for many, many years.
        We are strongly opposed to any proposal to ``out-source'' or
    contract-out any of the present positions in the Corps of Engineers'
    Civil Works function. The Secretary of the Army has proposed that 90
    percent of all Corps of Engineers' positions be contracted out, this
    would eliminate approximately 32,000 current employees and make it
    almost impossible to continue with our work.
                                    comments
        The Pontchartrain Levee District has full realization of the
    necessity of keeping these Subcommittees advised of current and future
    needs for Federal monetary support on vital items of the MR&T Flood
    Control Project. Beginning in 1995 the subcommittees refused to give
    audience to the Mississippi Valley Flood Control Association. This year
    no oral testimony will be heard. Again, this is a great travesty of
    justice. Such actions seriously erode the partnership that has been
    built between Congress, the Corps of Engineers and local sponsors.
        We trust that this pattern will revert back to the 63-year practice
    of hearing our delegation.
                                   conclusion
        The Board of Commissioners, Pontchartrain Levee District,
    compliments the Subcommittees on Energy and Water Development for its
    keen understanding of real needs for the MR&T Flood Control Project
    along with Hurricane Protection and efficient, alert actions taken to
    appropriate funds for the many complex requirements. We endorse
    recommendations presented by the Association of Levee Boards of
    Louisiana, Department of Transportation and Development, Mississippi
    Valley Flood Control Association and Red River Valley Association. The
    Board of Commissioners desires our statement be made a part of the
    record.

       FISCAL YEAR 2004 CIVIL WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND
                           TRIBUTARIES APPROPRIATIONS
    ------------------------------------------------------------------------
                        Project and State                         Request
    ------------------------------------------------------------------------
    SURVEYS, CONTINUATION OF PLANNING AND ENGINEERING &
     ADVANCE ENGINEERING & DESIGN:
        Memphis Harbor, TN..................................        $700,000
        Germantown, TN......................................         171,000
        Millington, TN......................................         127,000
        Fletcher Creek, TN..................................         150,000
        Southeast Arkansas..................................       1,000,000
        Coldwater Basin Below Arkansas......................         500,000
        Quiver River, MS....................................         100,000
        Alexandria, LA to the Gulf of Mexico................         700,000
        Morganza, LA to the Gulf of Mexico..................       7,992,000
        Donaldsonville, LA to Gulf of Mexico................       1,400,000
        Spring Bayou, LA....................................         832,000
        Tensas River, LA....................................         500,000
        Donaldsonville Port Development, LA.................         100,000
        Collection & Study of Basic Data....................         695,000
                                                             ---------------
          SUBTOTAL--SURVEYS, CONTINUATION OF PLANNING &           14,967,000
           ENGINEERING & ADVANCE ENGINEERING & DESIGN.......
                                                             ---------------
    CONSTRUCTION:
        St. John's Bayou-New Madrid Floodway, MO............       7,600,000
        Eight Mile Creek, AR................................       2,050,000
        Helena & Vicinity, AR...............................       3,407,000
        Grand Prairie Region, AR............................      24,700,000
        Bayou Meto, AR......................................      16,000,000
        West Tennessee Tributaries, TN......................         620,000
        Nonconnah Creek, TN.................................       3,068,000
        Wolf River, Memphis, TN.............................       2,500,000
        Reelfoot Lake, TN...................................       1,240,000
        St. Francis Basin, MO & AR..........................       6,300,000
        Yazoo Basin, MS.....................................      53,555,000
        Atchafalaya Basin, LA...............................      21,235,000
        Atchafalaya Basin Floodway..........................      14,200,000
        MS Delta Region, LA.................................       3,400,000
        Horn Lake Creek, MS.................................         395,000
        MS & LA Estaurine Area, MS & LA.....................          30,000
        Channel Improvements, IL, KY, MO, AR, TN, MS & LA...      44,017,000
        Mississippi River Levees, IL, KY, MO, AR, TN, MS &        50,645,000
         LA.................................................
                                                             ---------------
          SUBTOTAL--CONSTRUCTION............................     254,962,000
          SUBTOTAL--MAINTENANCE.............................     208,433,000
                                                             ---------------
          SUBTOTAL--MISSISSIPPI RIVER & TRIBUTARIES.........     478,362,000
    LESS REDUCTION FOR SAVINGS & SLIPPAGE...................     -43,362,000
                                                             ---------------
          GRAND TOTAL--MISSISSIPPI RIVER & TRIBUTARIES......     435,000,000
    ------------------------------------------------------------------------

                                     ______

            Prepared Statement of the Fifth Louisiana Levee District
        In order to continue the current level of construction on the
    Mississippi River and Tributaries Project (MR&T), and to provide proper
    maintenance of the completed portions, it is essential that the $435
    million, as requested by the Mississippi Valley Flood Control
    Association for fiscal year 2004 (copy attached), be appropriated for
    the MR&T Project.
        Less than $10 billion has been invested in the MR&T Project since
    its authorization following the great flood of 1927, but even in its
    incomplete stage, the MR&T project has prevented over $180 billion in
    flood damages and makes possible about $900 million in navigation
    benefits each year.
        Levee enlargements have been completed along most of the
    Mississippi River Levee, with one exception being portions of the
    system in Louisiana where people and property remain vulnerable to a
    Levee that is the lowest in the MR&T system, even though it conducts to
    the Gulf 41 percent of the total water runoff of the Nation. It is
    imperative that construction of these Levees remain a top priority for
    the Administration and U.S. Army Corps of Engineers and that adequate
    funding be provided.
        I urge reconsideration of the Administration's recommendation (in
    its Fiscal Year 2004 Budget Submission) to fund Operations and
    Maintenance cost of the Inland Waterways by using funds from the Inland
    Waterways Trust Fund. Depletion of that fund will have long term
    effects on construction for navigation, and ultimately on commerce and
    individuals dependent upon River transportation of bulk commodities.
        It is essential that the U.S. Army Corps of Engineers remain intact
    and not be divided into separate, smaller entities and transferred to
    administration of other established Departments. The Inland Waterways
    System created by the Corps is recognized world-wide and has set the
    standard for construction of water control and navigational systems. It
    must continue to function as one unit to retain its effectiveness.
        It is vital to the people of Louisiana and to the Nation that the
    Mississippi River and Tributaries Project be completed as designed and
    as quickly as possible. To transfer any part of the Civil Works
    mission, or to ``out-source'' or contract-out positions in the Corps'
    Civil Works organization, as proposed by the Secretary of The Army,
    will wreck the current construction and maintenance time table and
    eliminate approximately 32,000 current employees.
        I respectfully request that $435 million be appropriated for the
    MR&T Project for the coming fiscal year, and urge your support for
    protection of the Inland Waterways Trust Fund and the structure of the
    U.S. Army Corp of Engineers as it currently exists.

      FISCAL YEAR 2004 CIVIL WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND
                           TRIBUTARIES APPROPRIATIONS
    ------------------------------------------------------------------------
                        Project and State                      MVFCA Request
    ------------------------------------------------------------------------
    SURVEYS, CONTINUATION OF PLANNING AND ENGINEERING &
     ADVANCE ENGINEERING & DESIGN:
        Memphis Harbor, TN..................................        $700,000
        Germantown, TN......................................         171,000
        Millington, TN......................................         127,000
        Fletcher Creek, TN..................................         150,000
        Southeast Arkansas..................................       1,000,000
        Coldwater Basin Below Arkansas......................         500,000
        Quiver River, MS....................................         100,000
        Alexandria, LA to the Gulf of Mexico................         700,000
        Morganza, LA to the Gulf of Mexico..................       7,992,000
        Donaldsonville, LA to Gulf of Mexico................       1,400,000
        Sprung Bayou, LA....................................         832,000
        Tensas River, LA....................................         500,000
        Donaldsonville Port Development, LA.................         100,000
        Collection & Study of Basic Data....................         695,000
                                                             ---------------
          SUBTOTAL--SURVEYS, CONTINUATION OF PLANNING &           14,967,000
           ENGINEERING & ADVANCE ENGINEERING & DESIGN.......
                                                             ---------------
    CONSTRUCTION:
        St. John's Bayou-New Madrid Floodway, MO............       7,600,000
        Eight Mile Creek, AR................................       2,050,000
        Helena & Vicinity, AR...............................       3,407,000
        Grand Prairie Region, AR............................      24,700,000
        Bayou Meto, AR......................................      16,000,000
        West Tennessee Tributaries, TN......................          620,00
        Nonconnah Creek, TN.................................       3,068,000
        Wolf River, Memphis, TN.............................       2,500,000
        Reelfoot Lake, TN...................................       1,240,000
        St. Francis Basin, MO & AR..........................       6,300,000
        Yazoo Basin, MS.....................................      53,555,000
        Atchafalaya Basin, LA...............................      21,235,000
        Atchafalaya Basin Floodway..........................      14,200,000
        MS Delta Region, LA.................................       3,400,000
        Horn Lake Creek, MS.................................         395,000
        MS & LA Estaurine Area, MS & LA.....................          30,000
        Channel Improvements, IL, KY, MO, AR, TN, MS & LA...      44,017,000
        Mississippi River Levees, IL, KY, MO, AR, TN, MS &        50,645,000
         LA.................................................
                                                             ---------------
          SUBTOTAL--CONSTRUCTION............................     254,962,000
          SUBTOTAL--MAINTENANCE.............................     208,433,000
                                                             ---------------
          SUBTOTAL--MISSISSIPPI RIVER & TRIBUTARIES.........     478,362,000
    LESS REDUCTION FOR SAVINGS & SLIPPAGE...................     -43,362,000
                                                             ---------------
          GRAND TOTAL--MISSISSIPPI RIVER & TRIBUTARIES......     435,000,000
    ------------------------------------------------------------------------

                                     ______

       Prepared Statement of the Brazos River Harbor Navigation District
        On behalf of the Brazos River Harbor Navigation District and the
    users of Freeport Harbor, we extend gratitude to Chairman Domenici and
    members of the subcommittee for the opportunity to submit testimony in
    support of the feasibility study for the proposed channel improvement
    project for Freeport Harbor and Stauffer Channel, Texas.
        We express full support of the inclusion in the fiscal year 2004
    budget for: Second phase of a Corps of Engineers feasibility study for
    Freeport Harbor, Texas--$500,000.
                             history and background
        Port Freeport is an autonomous governmental entity authorized by an
    act of the Texas Legislature in 1925. It is a deep-draft port, located
    on Texas' central Gulf Coast, approximately 60 miles southwest of
    Houston, and is an important Brazos River Navigation District
    component. The port elevation is 3 to 12 feet above sea level. Port
    Freeport is governed by a board of six commissioners elected by the
    voters of the Navigation District of Brazoria County, which currently
    encompasses 85 percent of the county. Port Freeport land and operations
    currently include 186 acres of developed land and 7,723 acres of
    undeveloped land, five operating berths, a 45-inch deep Freeport Harbor
    Channel and a 70-foot deep sink hole. Future expansion includes
    building a 1,300-acre multi-modal facility, cruise terminal and
    container terminal. Port Freeport is conveniently accessible by rail,
    waterway and highway routes. There is direct access to the Gulf
    Intracoastal Waterway, Brazos River Diversion Channel, and, State
    Highways 36 and 288. Located just 3 miles from deep water, Port
    Freeport is one of the most accessible ports on the Gulf Coast.
                              project description
        The Fiscal Year 2002 Energy and Water Appropriations signed into
    law included a $100,000 appropriation to allow the United States Army
    Corps of Engineers (USACE) to conduct a reconnaissance study to
    determine the Federal interest in an improvement project for Freeport
    Harbor, Texas. The USACE, in cooperation with the Brazos River Harbor
    Navigation District as the local sponsor, has completed that study. The
    report indicates that ``transportation savings in the form of National
    Economic Development Benefits (NED) appear to substantially exceed the
    cost of project implementation'', thus confirming ``a strong Federal
    interest in conducting the feasibility study of navigation improvements
    at Freeport Harbor''. In fact, the Corps anticipates a benefit to cost
    ratio of the project to be at an impressive more than 20 to 1 benefit
    to cost.
        Port Freeport has the opportunity to solidify significant new
    business for Texas with this improvement project. In addition, the
    improvement to the environment by taking a huge number of trucks off of
    the road, transporting goods more economically and environmentally
    sensitive by waterborne commerce is infinitely important to the
    community, the State, and the Nation. Moreover, the enhanced safety of
    a wider channel cannot be overstated.
                        economic impact of port freeport
        Port Freeport is 16th in foreign tonnage in the United States and
    24th in total tonnage. The port handled over 25 million tons of cargo
    in 2001 and an additional 70,000 T.E.U.'s of containerized cargo. It is
    responsible for augmenting the Nation's economy by $7.06 billion
    annually and generating 30,000 jobs. Its chief import commodities are
    bananas, fresh fruit and aggregate while top export commodities are
    rice and chemicals. The port's growth has been staggering in the past
    decade, becoming one of the fastest growing ports on the Gulf Coast.
    Port Freeport's economic impact and its future growth is justification
    for its budding partnership with the Federal Government in this
    critical improvement project.
                         defense support of our nation
        Port Freeport is a strategic port in times of National Defense of
    our Nation. It houses a critically important petroleum oil reserve--
    Bryan Mound. It also is the only port in Texas that is being considered
    by the United States Navy and General Dynamics as the site for the
    building of Amphibious Assault Vehicles. Its close proximity to State
    Highways 36 and 288 make it a convenient deployment port for Fort Hood.
    In these unusual times, it is important to note the importance of our
    ports in the defense of our Nation and to address the need to keep our
    Federal waterways open to deep-draft navigation.
                         community and industry support
        This proposed improvement project has wide community and industry
    support. The safer transit and volume increase capability is an
    appealing and exciting prospect for the users of Freeport Harbor and
    Stauffer Channel. The anticipated more than 20-to-1 benefit-to-cost
    ratio that was indicated from the Corps of Engineers reconnaissance
    study firmly solidified the Federal interest.
             what we need from the subcommittee in fiscal year 2004
        The Administration's budget included $250,000 for the first phase
    of the feasibility study, which will be conducted at a 50/50 Federal
    Government/local sponsor share. The Corps had indicated a capability
    for Fiscal Year 2004 of $500,000 to continue the feasibility study and
    keep this project on an optimal and most cost-efficient time frame for
    the Federal Government and the local sponsor. We respectfully request
    the additional $250,000 for fiscal year 2004.
                                     ______

                  Prepared Statement of Cameron County, Texas
        On behalf of Cameron County and the users of the Gulf Intracoastal
    Waterway, (GIWW) Texas, we extend gratitude to Chairman Domenici, and
    members of the subcommittee for the opportunity to submit testimony in
    support of an appropriation to direct the United States Army Corps of
    Engineers (USACE) to conduct a reconnaissance study to reroute the
    GIWW.
        We express full support of the inclusion in the fiscal year 2004
    budget for: First Phase of feasibility study--$500,000.
                             history and background
        On September 15, 2001, a tugboat and several barges struck the
    Queen Isabella Causeway on the Gulf Intracoastal Waterway at the mouth
    of the Brownsville Ship Channel east of Port Isabel. The accident took
    the lives of eight people. On May 2, 2002, three barges being pushed by
    a tug collided with the swing bridge at Port Isabel, Texas, closing the
    waterway and stranding residents of Long Island Village. These
    accidents prompted Cameron County to request a reconnaissance study to
    study realignment of the portion of the Gulf Intracoastal Waterway near
    the swing bridge to straighten the circuitous route, thus significantly
    reducing the threat of future accidents.
        A January 1997 Reconnaissance Report of the Gulf Intracoastal
    Waterway-Corpus Christi Bay to Port Isabel, Texas (Section 216), was
    conducted by the United States Army Corps of Engineers. The study was
    initiated to determine the Federal interest in rerouting the GIWW. The
    information available at the time indicated a less than favorable
    benefit-to-cost ratio for the proposed realignment. Since the September
    15 incident, the Corps, Cameron County officials, and a number of local
    entities and residents of the County have reopened discussion of the
    rerouting of the GIWW.
        The Corps of Engineers agrees that new facts regarding the safety
    of the current alignment warrants a revisiting of the issue to
    determine the viability of rerouting the channel in a direct line from
    the point where the waterway crosses underneath the causeway to the
    point where it reaches the Brazos Santiago Pass and the Brownsville
    Ship Channel. The route in question is the exact one traveled by the
    tugboat and barges that struck the bridge on September 15, killing
    eight people. The tugboat captain failed to negotiate the sharp turn
    after it passed through the Long Island Swing Bridge. This particular
    turn is one of the most dangerous on the entire waterway.
                              project description
        The reconnaissance study allowed the Corps to reopen the
    examination of the rerouting of the GIWW on the basis of safety. The
    measure would seek to eliminate safety hazards to Port Isabel and Long
    Island residents created by barges that move large quantities of fuel
    and other potentially dangerous explosive chemicals through the
    existing route under the Queen Isabella Causeway. The overall goal of
    the study would be to enhance safety and transportation efficiency on
    this busy Texas waterway by removing the treacherous turn tug and barge
    operators are forced to make as they navigate the passage through the
    Long Island Swing Bridge. In addition to the hazardous curve, the
    winding and congested course taken by the waterway through the City of
    Port Isabel adds needless distance and time to the transportation of
    goods to and from Cameron County ports. These costs are borne not only
    by commercial operators using the waterway, but also by consumers and
    businesses all across Texas and the Nation. The rerouting would also
    seek to correct the adverse impact of waterway traffic on Cameron
    County residents. Apart from the obvious potential for damage to the
    Queen Isabella Causeway, adverse impacts are created by waterway
    traffic in the form of traffic delays associated with the Long Island
    Swing Bridge and the transportation of hazardous materials within
    several hundred feet of densely populated areas in Port Isabel and Long
    Island.
        Currently, a 1950's era swing bridge that floats in the waterway
    channel connects Long Island and the City of Port Isabel. As waterborne
    traffic approaches the bridge, cables are used to swing it from the
    center of the channel and then swing it back into place. This costly
    and time-consuming process, which frequently backs up traffic into the
    downtown business district of Port Isabel, is estimated to drain
    hundreds of dollars a year from the economy of this economically
    distressed area. More serious problems are created when the heavily
    used cables or winch motors on the swing bridge fail, leaving the
    bridge stuck in an open or closed position. Equipment failures often
    cause delays for several days and leave Long Island residents cut off
    from vehicle access or the ports of Port Isabel and Brownsville cut off
    from in-bound and out-bound barge traffic. During these times, supplies
    of vital commodities are halted all across the Rio Grande Valley as
    stocks dwindle and produce and finished goods begin to pile up.
                    impact of the gulf intracoastal waterway
        The Gulf Intracoastal Waterway is an integral part of the inland
    transportation system of the United States. Stretching across more than
    1,300 coastal miles of the Gulf of Mexico, this man-made, shallow-draft
    canal moves a large variety and great number of vessels and cargoes.
    The 426 miles of the waterway running through Texas makes it possible
    to supply both domestic and foreign markets with chemicals, petroleum
    and other essential goods. Barge traffic is essential to many of the
    port economies from Texas to Great Lakes ports, indeed, throughout the
    entire GIWW. Some ports feel their future strategic plans are closely
    linked to the efficient operation of the GIWW. This is true for ports
    that rely almost entirely on barge traffic as well as ports that
    function primarily as recreational facilities. Most of the cargo moved
    along Texas waterways is petroleum and petroleum products. The GIWW is
    well suited for the movement of such cargo, and, therefore, has allowed
    many of the smaller, shallow-draft facilities to engage in both
    interstate and international trade. Commercial fishing access via the
    GIWW has had a significant impact on these port economies as well.
                                   conclusion
        A 1995 Lyndon Baines Johnson School of Public Affairs report
    entitled ``The Texas Seaport and Inland Waterway System'' warned of
    concern with the safe operation of barges on the GIWW citing, ``a
    serious accident perhaps involving a collision between two barges
    carrying hazardous materials could force closure of the waterway''. No
    one foresee the terrible accident that occurred on September 15 or the
    additional one on May 2, 2002. The lives of eight people came to an end
    and the lives of their loved ones was irrevocably changed forever. This
    important waterway must be improved to prevent another tragedy.
             what we need from the subcommittee in fiscal year 2004
        The $500,000 that must be added to the fiscal year 2004
    appropriations bill will allow the Corps of Engineers to begin to
    remedy this dangerous situation. Cameron County, the users of the GIWW,
    and the residents of the area respectfully requests the addition of
    this much-needed appropriation.
                                     ______

       Prepared Statement of the Chambers County-Cedar Bayou Navigation
                                    District
        On behalf of the Chambers County-Cedar Bayou Navigation district
    and the users of the Cedar Bayou Channel, Texas, we extend gratitude to
    Chairman Domenici and members of the subcommittee for the opportunity
    to submit testimony in support of the improvement project for the Cedar
    Bayou Channel, Texas.
        We express full support of the inclusion in the fiscal year 2004
    budget for: Pre-Construction Engineering and Design (OEM) For Cedar
    Bayou, Texas--$100,000.
                             history and background
        The River and Harbor Act of 1890 originally authorized navigation
    improvements to Cedar Bayou. The project was reauthorized in 1930 to
    provide a 10-foot deep and 100-foot wide channel from the Houston Ship
    Channel to a point on Cedar Bayou 11 miles above the mouth of the
    bayou. In 1931, a portion of the channel was constructed from the
    Houston Ship Channel to a point about 0.8 miles above the mouth of
    Cedar Bayou, approximately 3.5 miles in length.
        A study of the project in 1971 determined that an extension of the
    channel to project Mile 3 would have a favorable benefit to cost ratio.
    This portion of the channel was realigned from mile 0.1 to mile 0.8 and
    extended from mile 0.8 to Mile 3 in 1975. In October 1985, the portion
    of the original navigation project from project Mile 3 to 11 was
    deauthorized due to the lack of a local sponsor. In 1989, the Corps of
    Engineers, Galveston District completed a Reconnaissance Report dated
    June 1989, which recommended a 12125 channel from the Houston Ship
    Channel Mile 3 to Cedar Bayou Mile 11 at the State Highway 146 Bridge.
    The Texas Legislature created the Chambers County-Cedar Bayou
    Navigation District in 1997 as an entity to improve the navigability of
    Cedar Bayou. The district was created to accomplish the purpose of
    Section 59, Article XVI, of the Texas Constitution and has all the
    rights, powers, privileges and authority applicable to Districts
    created under Chapters 60, 62, and 63 of the Water Code--Public Entity.
    The Chambers County-Cedar Bayou Navigation District then became the
    local sponsor for the Cedar Bayou Channel.
                    project description and reauthorization
        Cedar Bayou is a small coastal stream, which originates in Liberty
    County, Texas, and meanders through the urban area near the eastern
    portion of the City of Baytown, Texas, before entering Galveston Bay.
    The bayou forms the boundary between Harris County on the west and
    Chambers County on the east. The project was authorized in Section 349
    of the Water Resources Development Act 2000, which authorized a
    navigation improvement of 12 feet deep by 125 feet wide from mile 2.5
    to mile 11 on Cedar Bayou.
                       justification and industry support
        First and foremost, the channel must be improved for safety. The
    channel is the home to a busy barge industry. The most cost-efficient
    and safe method of conveyance is barge transportation. Water
    transportation offers considerable cost savings compared to other
    freight modes (rail is nearly twice as costly and truck nearly four
    times higher). In addition, the movement of cargo by barge is
    environmentally friendly. Barges have enormous carrying capacity while
    consuming less energy, due to the fact that a large number of barges
    can move together in a single tow, controlled by only one power unit.
    The result takes a significant number of trucks off of Texas highways.
    The reduction of air emissions by the movement of cargo on barges is a
    significant factor as communities struggle with compliance with the
    Clean Air Act. Several navigation-dependent industries and commercial
    enterprises have been established along the commercially navigable
    portions of Cedar Bayou. Several industries have docks on at the mile
    markers that would be affected by this much-needed improvement. These
    industries include: Reliant Energy, Bayer Corporation, Koppel Steel,
    CEMEX, US Filter Recovery Services and Dorsett Brothers Concrete, to
    name a few.
                           project costs and benefits
        Congress appropriated $100,000 in fiscal year 2001 for the Corps of
    Engineers to conduct the feasibility study to determine the Federal
    interest in this improvement project. The study indicated a benefit to
    cost ratio of the project of 2.8 to 1. The estimated total cost of the
    project is $16.8 million with a Federal share estimated at $11.9
    million and the non-federal sponsor share of approximately $4.9
    million. Total annual benefits are estimated to be $4.8 million, with a
    net benefit of $3 million. Congress appropriated $400,000 each in
    fiscal year 2002 and fiscal year 2003 to support the feasibility study.
    This project is environmentally sound and economically justified.
             what we need from the subcommittee in fiscal year 2004
        We would appreciate the subcommittee's support of the required add
    of the $100,000 appropriation needed by the Corps of Engineers to
    complete the plans and specifications of the project so that it can
    move forward at an optimum construction schedule. The users of the
    channel deserve to have the benefits of a safer, most cost-effective
    Federal waterway.
                                     ______

              Prepared Statement of the City of Newark, New Jersey
        Chairman Domenici and members of the Subcommittee, thank you for
    giving the City of Newark the opportunity to submit testimony about a
    project under your jurisdiction which is very important to the quality
    of life of the people of Newark, New Jersey and the surrounding region.
    The Passaic River Streambank Restoration Project, known as the Joseph
    G. Minish Passaic River Waterfront Park and Historic Area, is an
    important part of the overall economic, land use and transportation
    development plan of the City of Newark.
        The Joseph G. Minish Park/Passaic Riverfront Historic Area project
    addresses the restoration and rehabilitation of approximately 9,000
    linear feet of Passaic River shoreline. This encompasses the eastern
    boundary of Newark's Central Business District, as well as the edge of
    the City's densely populated Ironbound neighborhood. This reach of the
    Passaic River, from Bridge Street to Brill Street, in the City of
    Newark is eroded, deteriorated and environmentally degraded due to past
    heavy commercial and industrial use and flooding. The total project
    includes bulkheading and other streambank restoration measures, the
    creation of a 40-foot-wide walkway on top of the bulkhead, and a system
    of open spaces tying together large public park areas as well as open
    space required in any private development.
        The project was authorized in the Water Resources Development Act
    (WRDA) of 1990 (Public Law 101-640) as an element of the Passaic River
    Flood Damage Reduction Project on November 28, 1990, modified in the
    Water Resources Development Act of 1992 (Public Law 102-580) by
    extending the project area, and further modified in the Water Resources
    Development Act of 1996 (Public Law 104-303). The project is divided
    into three phases. Phase I consists of 6,000 feet of bulkhead
    replacement (Bridge Street to Jackson Street) and 3,200 feet of
    wetlands restoration (Jackson Street to Brill Street). The Project
    Cooperation Agreement for Phase I was executed in May 1999. Plans and
    specifications for this first phase have been prepared, and it is being
    implemented in four contracts. Construction of the first bulkhead
    section at a value of $2,069,910 was completed in September of 2000. A
    second construction contract to continue Phase I has been contracted at
    a cost of $4.7 million, and is scheduled for completion in March 2003.
    The third contract specifications have been prepared, and will be bid
    as soon as required property remediation is completed by a private
    owner. The fourth contract includes a naturalized streambank area in
    the riverfront area adjacent to City and County parkland in a densely
    populated neighborhood, and could be constructed simultaneously to
    contract three. The Army Corps of Engineers has committed funds still
    available to apply toward Phase I elements. The State of New Jersey has
    been the primary cost-sharing sponsor of Phase I, with significant City
    investment and support. Some additional funding will be needed for
    Phase I, according to the U.S. Army Corps of Engineers March 2002
    project fact sheet. Prior appropriated funds have been utilized to
    fully design the bulkhead, a segment of naturalized streambank, and a
    system of walkways and public open spaces.
        City Engineering professionals are coordinating with the Corps to
    complete all elements of the bulkheading and its integration with
    significant Combined Sewer Overflow facilities and related Phase I
    costs. Close coordination has also been continuing with the NJ
    Department of Transportation, which is rebuilding the section of Route
    21 adjacent to Minish Park, and NJ Transit, which has begun
    construction of the Minimum Operable Segment of a light rail line, the
    Newark Elizabeth Rail Link, on the west side of Route 21. Adjacent,
    previously dormant, sites have become desirable locations for
    development of commercial properties, due to the projected walkway,
    park and open space facilities. The Federal Bureau of Investigation has
    become the tenant in a new office building on the riverfront, and a
    private developer is planning new housing units on a riverfront site
    adjacent to Penn Station. The complexity of all of these interrelated
    projects, as well as the private development of properties in the area,
    has increased the importance of moving the Minish Park construction at
    an accelerated pace.
        As planned, Phase II will add a 9,200-foot long and 40-foot-wide
    waterfront walkway on top of and adjacent to the bulkhead, and Phase
    III adds park facilities, plazas, and landscaping on the inland side of
    the promenade, between the river and Newark's downtown edge. Future
    project segments will create linkages to Riverbank Park and other
    community facilities, including a naturalized streambank and a new
    Essex County Park. However, a change in the phasing, but not the scope,
    of the overall project would provide needed open space in one of our
    Nation's oldest and most densely populated cities.
        It is vital to the interests of the City of Newark, its residents,
    visitors, businesses and investors that construction of the walkway and
    park between Penn Station and the northern end of the completed
    bulkhead proceed as soon as possible. This area includes the large park
    proposed at Center Street and the Riverfront. Construction of this
    project segment will allow pedestrians safe and convenient access to
    the riverfront from Newark Penn Station north to the New Jersey
    Performing Arts Center. The Army Corps has completed preliminary
    designs, so that the waterfront walkway can built over the two sections
    of the bulkhead which have been substantially completed, and the park
    built on adjacent property now owned by the City of Newark and other
    public entities.
        Mandatory site remediation by private owners on property slated for
    bulkhead construction has become more extensive than originally
    anticipated. Since design efforts for Phases II and III are underway,
    as are negotiations for a Project Cooperation Agreement, construction
    of Phases II and III can take place on completed areas of Phase I. This
    restoration will provide a new focal point for downtown development
    activities, reconnect Newark to its riverfront and maritime history,
    and allow neighborhood residents direct access to the riverfront as
    part of a much-needed recreation complex.
        An appropriation of $14 million for the continuation of
    construction on the Newark Riverfront Project is requested, so that
    this integral element in Newark's revitalization can move forward as
    planned, and can be utilized by the Army Corps of Engineers, in fiscal
    year 2004. The current funding will only take us through the
    construction of bulkhead and some of the mud flats restoration, not to
    a usable facility. An additional appropriation will enable the City,
    State and Corps to proceed with a Phase II City/Corps cooperative
    program agreement on the next set of essential Phase II and Phase III
    elements. This will include the walkway/greenway component above and
    behind the completed bulkheading, and the critical connective
    infrastructure that will be needed to insure access and maximum
    effectiveness and utilization of this project for the community and key
    stakeholders and project partners.
        A supplemental appropriation of $14 million is requested so that
    this integral element in Newark's revitalization can move from partial
    construction to the beginning of full project build-out. This
    investment in Newark's future will help us to improve the economic
    status of our Nation's third oldest major city. The development of the
    riverfront now is a critical element in the overall plan for Newark's
    downtown revitalization. This linear park will serve as a visual and
    physical linkage among several key and exciting development projects.
    It is adjacent to one of the oldest highways in the Nation, Route 21,
    which is undergoing a multi-million dollar realignment and enhancement.
    A light rail system, the Newark-Elizabeth Rail Link, is under
    construction. It will connect Newark's two train stations, and
    ultimately, Newark International Airport and the neighboring City of
    Elizabeth, providing users with access to mass transportation.
    Conversely, the riverfront will become a destination served by that
    system, providing an important open space and waterfront opportunity
    for residents of one of the most densely populated cities in the
    Nation.
        The environmental benefits of the project include flood control,
    riverbank and wetlands restoration, creation of urban green space, and
    enhancement of water quality in the Passaic River. These improvements
    will allow the Passaic River to be converted from one of the nation's
    most troubled waterways to a cultural and recreational asset. Ongoing
    and planned greenway projects will provide pedestrian and bicycle
    access to the waterfront from Newark's residential neighborhoods as
    well as the City's five major institutions of higher learning.
        The riverfront development will complement and provide a visual and
    physical connection with the $170 million New Jersey Performing Arts
    Center, which opened in the Fall of 1997 and has been incredibly
    successful. Further north along the riverfront, also accessible from
    the riverfront walkway when it is fully built, the City of Newark and
    Essex County have opened Riverfront Stadium, home to a minor league
    baseball team as well as community sporting events such as the Project
    Pride Bowl. Also in close pedestrian proximity is the site for the new
    Newark Sports and Entertainment Arena, which is expected to bring two
    million visitors a year into the area. In addition, NJ Transit has
    completed construction of a new concourse, which is directly adjacent
    to the riverfront. Once the park and walkway are completed, rail and
    bus passengers will be able to exit the Penn Station north concourse
    directly onto the riverfront area. On the eastern portion of Minish
    Park, residents of a crowded community, Newark's Ironbound, will have
    direct access to the river and its streambank for active and passive
    recreation for the first time.
        The riverfront will be the nexus of these activities, creating a
    vibrant downtown center that will provide economic development
    opportunities for the citizens of Newark and our region. Visitors from
    throughout the Nation are expected to come to visit our revitalized
    city, and participate in the exciting growth and development taking
    place. There is tremendous potential for Newark's riverfront to mirror
    the success of other riverfront developments throughout the country,
    and Newark stands ready to accept the challenges such developments
    present.
        The City of Newark has completed conducting a master plan study for
    the entire riverfront area, which will guide us in tying together these
    incredibly exciting, and challenging, projects. We have received State
    of New Jersey planning funds to develop a redevelopment plan for the
    entire site, which will serve to coordinate redevelopment plans with
    private developers, public agencies, and non-profit partners. Funds
    have also been made available by the State for a Newark Waterfront
    Community Access Study, which is examining the optimum way to safely
    cross Route 21 to enable pedestrians to enjoy the riverfront area. We
    have a once in a lifetime opportunity to coordinate several major
    development activities into a virtually seamless development plan. The
    appropriation of $15 million which Newark requests will serve to
    incorporate the Army Corps of Engineers' construction into our overall
    economic development plan to reinvigorate Newark. I urge you to support
    this appropriation request, and help us to continue Newark's
    revitalization.
        In closing, I would like to extend my thanks to the entire New
    Jersey delegation for its ongoing support, especially to subcommittee
    member Rodney Frelinghuysen for his advocacy of Newark's critical
    projects. The time and attention of this subcommittee are deeply
    appreciated.
                                     ______

             Prepared Statement of the City of Miami Beach, Florida
        On behalf of the City of Miami Beach, I appreciate this opportunity
    to submit for the record testimony in support of the request by Miami-
    Dade County for beach renourishment funds.
                  support for miami-dade construction request
        The City of Miami Beach would first like to thank the members of
    the subcommittee for all their efforts in the past to provide support
    for the State of Florida's beaches and in particular, those of Miami
    Beach.
        Beaches are Florida's number one tourist ``attraction.'' In 2002,
    beach tourism generated more than $16 billion for Florida's economy and
    more tourists visited Miami Beach than visited the three largest
    national parks combined.
        In addition to their vital economic importance, beaches are the
    front line defense for multi-billion dollar coastal infrastructure
    during hurricanes and storms. When beaches are allowed to erode away,
    the likelihood that the Federal Government will be stuck with
    astronomical storm recovery costs is significantly increased.
        The Florida Department of Environmental Protection estimates that
    at least 276 miles (35 percent) of Florida's 787 miles of sandy beaches
    are currently at a critical state of erosion. This includes the entire
    6 miles of Miami Beach. As a result of the continuing erosion process
    and more dramatically, recent intense storms which have caused
    tremendous damage to almost all of the dry beach and sand dune
    throughout the middle segment of Miami Beach. Three years ago, most of
    the Middle Beach dune cross-overs were declared safety hazards and
    closed, as the footings of the boardwalk itself were in immediate
    jeopardy of being undercut by the encroaching tides. If emergency
    measures, costing approximately $400,000 had not been taken by the
    City, there would have been considerable risk of coastal flooding west
    of the dune line in residential sections of Miami Beach. As you can
    see, this example points to the commitment we as a beach community have
    to our beaches, but Federal assistance remains crucial. While we are
    thankful of the substantial commitment made by the subcommittee in the
    fiscal year 2002 Energy and Water Conference Report, there is still
    much work to be done. Our beaches must be maintained not only to ensure
    that our residents and coastal properties are afforded the best storm
    protection possible, but also to ensure that beach tourism, our number
    one industry, is protected and nurtured.
        In 1987, the Army Corps of Engineers and Metropolitan Dade County
    entered into a 50-year agreement to jointly manage restore and maintain
    Dade County's sandy beaches. Since then, Metropolitan Dade County has
    been responsible for coordinating and funding the local share of the
    cost for the periodic renourishment of our beaches.
        In order to ensure that adequate funding will continue to be
    available, the City of Miami Beach supports and endorses the
    legislative priorities and appropriation requests of Metropolitan Dade
    County, as they relate to the restoration and maintenance of Dade
    County's sandy beaches. Specifically, the City respectfully adds their
    strong support for the efforts of Miami-Dade County and wholeheartedly
    supports their fiscal year 2003 request for beach renourishment funds.
        Your support would be appreciated, Mr. Chairman. The City of Miami
    Beach thanks you for the opportunity to present these views for your
    consideration.
                                     ______

         Prepared Statement of the Green Brook Flood Control Commission
                                    summary
        The Commission requests that the Congress appropriate $10,000,000
    in Construction General Funds for the Project in fiscal year 2004, to
    continue construction of the Project.
        Mr. Chairman and Members of the Subcommittee, my name is Vernon A.
    Noble, and I am the Chairman of the Green Brook Flood Control
    Commission. I submit this testimony in support of the Raritan River
    Basin--Green Brook Sub-Basin project, which we request be budgeted in
    fiscal year 2004 for $10,000,000 in Construction General funds.
        As you know from our previous testimony, a tremendous flood took
    place in September of 1999. Extremely heavy rainfall occurred,
    concentrated in the upper part of Raritan River Basin. As a result, the
    Borough of Bound Brook, New Jersey, located at the confluence of the
    Green Brook with the Raritan River, suffered catastrophic flooding.
    Water levels in the Raritan River and the lower Green Brook reached
    record levels.
        There were tremendous monetary damages, and extensive and tragic
    human suffering.
        As we have previously reported to you, a thorough study of the
    water levels throughout the Bound Brook Borough area in the terrible
    flood of September, 1999 showed that although the flood water reached
    record levels, it would have been contained by the extra margin of
    safety, the ``free board'', which the Corps. of Engineers has
    incorporated in the design of this Project.
        The flooding of September 1999 is not the first bad flood to have
    struck this area. Records show that major floods have occurred here as
    far back as 1903.
        Disastrous flooding took place in the Green Brook Basin in the late
    summer of 1971. That flood caused $304,000,000 in damages (April 1996
    price level) and disrupted the lives of thousands of persons.
        In the late summer of 1973, another very severe storm struck the
    area, and again, thousands of persons were displaced from their homes.
    $482,000,000 damages was done (April 1996 price level) and six persons
    lost their lives.
        As you no doubt know, actual construction of the Project began in
    late fiscal year 2001. This first construction involved the replacement
    of an old bridge over the Green Brook which connects East Main Street
    in the Borough of Bound Brook, Somerset County, New Jersey, with
    Lincoln Boulevard in the Borough of Middlesex, in Middlesex County, New
    Jersey. That work is now complete, and the new bridge is in use.
        Last year, the New York District of the Corps of Engineers awarded
    the second construction contract, known as Segment T.
        This Segment T contract will complete the construction of
    protection for the eastern section of the Borough of Bound Brook, New
    Jersey. The protection consists of levees and associated elements which
    will connect with the new and higher bridge. This Segment T also
    includes a large pumping station being built into the levee, for the
    purpose of gathering up the internal rain water, and pumping it safely
    over the levee and in to the Green Brook stream on the other side of
    the levee.
        The next following segment of the Project is planned for
    construction to begin later this year. This next construction, known as
    Segment U, will begin the protection for the western portion of Bound
    Brook Borough.
        As that segment gets into construction, the final plans for the
    remaining segments for the protection of Bound Brook Borough will be
    translated into construction documents.
        It is important to recognize that the Borough of Bound Brook will
    remain in danger of further catastrophic flooding until the ring of
    protection for the Borough is completed.
        The constructed completed thus far will not provide protection for
    Bound Brook Borough until the ring is closed around the Borough. It is
    of the utmost importance that the remaining construction to complete
    the protection for the people and property of Bound Brook Borough be
    carried forward with dispatch. With the continued support of the
    Congress, this work can continue seamlessly during the next few years.
        Since the devastating Floyd flood of 1999, the Borough of Bound
    Brook has been in desperate financial condition. That flood destroyed
    extensive tax rateables, and the Borough is in a critical situation.
    The only hope for stabilizing the municipal tax situation is
    redevelopment projects in Bound Brook. Because of its strategic
    location, there appear to be significant redevelopment opportunities
    available for Bound Brook Borough.
        However, realization of redevelopment depends upon completion of
    flood protection on schedule.
        Bound Brook Borough needs flood protection sooner, not later.
        To accomplish that, the Project requires $10,000,000 in Federal
    appropriation for fiscal year 2004.
        The Green Brook Flood Control Commission was established in 1971,
    pursuant to an Act of the New Jersey Legislature shortly after the very
    bad flood of 1971.
        The Green Brook Flood Control Commission is made up of appointed
    representatives from Middlesex, Somerset and Union Counties in New
    Jersey, and from the 13 municipalities within the Basin. This
    represents a combined population of about one-quarter of a million
    people.
        The Members of the Commission are all volunteers, and for 32 years
    have served, without pay, to advance the cause of flood protection for
    the Basin. Throughout this time, the Corps of Engineers, New York
    District, has kept us informed of the progress of their work, and a
    representative from the Corps has been a regular part of our monthly
    meetings.
        We believe that it is clearly essential that the Green Brook Flood
    Control Project be carried forward, and pursued vigorously, to achieve
    protection at the earliest possible date. This Project is needed to
    prevent loss of life and property, as well as the trauma caused every
    time there is a heavy rain.
        New Jersey has programmed budget money for its share of the Project
    in fiscal year 2004.
        We urgently request an appropriation for the Project in fiscal year
    2004 of $10,000,000.
        The Green Brook Flood Control Commission is dedicated to the
    proposition that Bound Brook Borough, and the other municipalities, and
    their thousands of residents, who would otherwise suffer in the next
    major flood, must be protected. We move forward with continued
    determination to achieve the protection which the people of the flood
    area need and deserve.
        With your continued support, we are determined to see this Project
    through to completion.
        Thank you, Mr. Chairman, and Members of the subcommittee, for your
    vitally important past support for the Green Brook Flood Control
    Project; and we thank you for the opportunity to submit this testimony.

                                                                                GREEN BROOK FLOOD CONTROL PROJECT FUNDING
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                    Cumulative Money
                                                                      Federal         Congressional                         Effective Net    Transfer by Corps      Net Money      Received by Corps
                        Federal Fiscal Year                        Administration     Appropriation       Savings and      Appropriation to   To (-) From (+)     Available for          Since
                                                                  Budget  Request       (Nominal)          Slippages           Corps of        Other Projects    Work on Project    Authorization in
                                                                                                                              Engineers                          (Work Allowance)         1986
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    1986.......................................................           $445,000           $445,000           -$19,000           $426,000  .................           $426,000           $426,000
    1987.......................................................          1,370,000          1,370,000  .................          1,370,000  .................          1,370,000          1,796,000
    1988.......................................................          1,400,000          1,400,000  .................          1,400,000  .................          1,400,000          3,196,000
    1989.......................................................          1,500,000          1,500,000            -68,000          1,432,000  .................          1,432,000          4,628,000
    1990.......................................................          1,200,000          1,200,000           -116,000          1,084,000           +$23,000          1,107,000          5,735,000
    1991.......................................................          2,000,000          2,000,000           -496,000          1,504,000            -98,000          1,406,000          7,141,000
    1992.......................................................          2,600,000          3,169,000           -364,000          2,805,000  .................          2,805,000          9,946,000
    1993.......................................................  .................          3,500,000  .................          3,500,000  .................          3,500,000         13,446,000
    1994.......................................................  .................          2,800,000           -594,000          2,206,000           +571,000          2,777,000         16,223,000
    1995.......................................................          2,000,000          2,000,000  .................          2,000,000           +135,000          2,135,000         18,358,000
    1996.......................................................          3,600,000          3,600,000           -932,000          2,668,000           +193,000          2,861,000         21,219,000
    1997.......................................................          2,781,000          2,781,000           -300,000          2,481,000  .................          2,781,000         24,000,000
    1998.......................................................  .................          3,100,000           -189,000          2,911,000  .................          2,911,000         26,911,000
    1999.......................................................  .................          9,900,000           -694,000          9,206,000         -6,500,000          2,706,000         29,617,000
    2000.......................................................          1,000,000          1,000,000           -142,000            858,000  .................            858,000         30,475,000
    2001.......................................................          4,000,000          4,000,000           -640,000          3,360,000            +89,000          3,449,000         33,924,000
    2002.......................................................         10,000,000         10,000,000         -1,598,000          8,402,000         -1,000,000          7,402,000         41,326,000
    2003.......................................................          5,000,000          7,000,000  .................  .................  .................  .................  .................
    2004.......................................................          6,500,000     \1\ 10,000,000  .................  .................  .................  .................  .................
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Recommendation of the Green Brook Flood Control Commission for Fiscal Year 2004 to Continue Construction
     Reference: This summary of funding for the Green Brook Flood Control Project has been assembled based upon publicly available information.

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

       Prepared Statement of the Garrison Diversion Conservancy District
        Mr. Chairman, Members of the Committee, my name is Dave Koland; I
    serve as the manager of the Garrison Diversion Conservancy District.
    The mission of the Garrison Diversion is to provide a reliable, high
    quality and affordable water supply to the areas of need in North
    Dakota. Over 77 percent of our State residents live within the
    boundaries of Garrison Diversion. I would like to comment on the impact
    that the President's fiscal year 2004 budget request has on the effort
    to provide reliable, high quality and affordable water supplies to the
    citizens of North Dakota through the Garrison Diversion Unit.
        The President's fiscal year 2004 budget request removed, from the
    Garrison Diversion Unit budget, funding for one of the most successful
    government programs in North Dakota. As I read the OMB Program
    Assessment Rating Tool (PART), dealing with Rural Water Supply
    Projects, I can only conclude that they had no knowledge of the North
    Dakota Municipal, Rural and Industrial (MR&I) program.
        The MR&I program was started in 1986 after the Garrison Diversion
    Unit was reformulated from a million-acre irrigation project into a
    multipurpose project with emphasis on the development and delivery of
    municipal and rural water supplies. The statewide MR&I program has
    focused on providing grant funds for water systems that provide water
    service to unserved areas of the State. The State has followed a policy
    of developing a network of regional water systems throughout the State.
    Every rural water system built in North Dakota is still operating. They
    are providing safe, clean water to their members, reducing their debt,
    putting money in reserve, complying with every State and Federal
    regulation, and doing so with a stable, prudent rate structure.
                          north dakota's success story
        Rural communities offer the experience and lifestyle many people
    seek in which to raise their family. People live on farmsteads with a
    rural water connection, while farmsteads without decent water stand
    empty. For instance, Sheridan County lost 20.4 percent of its
    population between 1990 and 2000, yet the rural water system serving
    that county hardly lost a connection. Good water does make a difference
    as to where people choose to live.
        The key to providing water to small communities and rural areas has
    been the Grant and Loan program of Rural Development and the MR&I
    program jointly operated by the Garrison Diversion Conservancy District
    and the State Water Commission. Without the assistance of these two
    grant programs, the exodus from the rural areas would have been a
    stampede.
        Rural water systems are being constructed using a unique blend of
    local expertise, State financing, rural development loans, MR&I grant
    funds to provide an affordable rate structure, and the expertise of the
    Bureau of Reclamation to deal with environmental issues. The projects
    are successful because they are driven by a local need to solve a water
    quantity or quality problem. The solution to the local problem is
    devised by the community affected by the problem. Early, local buy-in
    helps propel the project through the tortuous pre-construction stages.
        The MR&I program has been so successful and so important to North
    Dakota that the North Dakota Legislature loaned the program $15 million
    to help deal with the severe lag time that developed in the Federal
    appropriations process.
        The desperate need for clean, safe water is evidenced by the
    willingness of North Dakota's rural residents to pay water rates well
    above the rates EPA considers affordable. The EPA Economic Guidance
    Workbook states that rates greater than 1.5 percent of the median
    household income (MHI) are not only unaffordable, but also ``may be
    unreasonable''.
        The average monthly cost on a rural water system for 6,000 gallons
    of water is currently $48.97. The water rates in rural North Dakota
    would soar to astronomical levels without the 75 percent grant dollars
    in the MR&I program. For instance, current rates would have to average
    a truly unaffordable $134.19/month or a whopping 3.8 percent of the
    MHI. Rates would have ranged as high as $190.80/month or a prohibitive
    5.3 percent of MHI without the assistance of the MR&I program.
        The people waiting for water in our rural communities are willing
    to pay far more than what many consider an affordable, or even
    reasonable, price for clean, safe water.
                               environmental laws
        The Bureau of Reclamation plays a vital role by ensuring compliance
    with the National Environmental Policy Act of 1969 (NEPA) and dealing
    with international issues. Such is the case with the Northwest Area
    Water Supply Project (NAWS). Canada and the province of Manitoba have
    filed a lawsuit protesting the thorough Final Environmental Assessment
    and the subsequent Finding of No Significant Impact on the NAWS
    project.
        One reason for the success of the North Dakota program is the
    reliance on local control. Decision-making is accomplished at the
    lowest level possible. The decision on who the system can afford to
    provide service to and the rate structure is made by a local board of
    directors composed of members who will be served by the water system.
    Volunteer involvement and low administrative costs are hallmarks of the
    program. Local firms that have experience in designing and constructing
    systems in North Dakota typically provide engineering services.
        Across North Dakota, we have seen the impact of providing good
    water to rural areas and witnessed the dramatic change in small
    communities. Homes once occupied by aging widows are soon rented or
    sold to young adults, while houses and farmsteads without rural water
    stand empty.
        Good drinking water is still a dream in many rural North Dakota
    communities. Turning on the tap each morning brings brown, putrid
    smelling water instead of clear, fresh water a majority of people
    enjoy.
        The opportunity to impact rural North Dakota is now. If we do
    nothing, it is easy to predict what will occur in rural North Dakota.
    We only need to look at counties without good water.
        It is in the best interest of North Dakota and the 150+ local
    communities not yet served by a regional system that we build every
    piece of rural infrastructure feasible. We must continue to build on
    what has proven so successful in the past.
        Providing a reliable source of good, clean water in rural areas has
    worked to stabilize the rural economy in North Dakota. The combination
    of leveraging Rural Development loan funds with MR&I grant dollars has
    provided a cost efficient, long-term solution to the rural communities
    in North Dakota.
        If we act now, we can make a difference in rural North Dakota.
    Providing for healthy, vibrant rural communities is good for North
    Dakota and good for our Nation. We know from past experience that
    providing good water for rural communities is one sure way of helping
    people change the future.
        The MR&I program in North Dakota should serve as an outstanding
    example of a successful program that could be implemented in other
    States.
               discussion of overall bureau of reclamation budget
        It is important to recognize that the fiscal year 2004 budget
    submission of $771 million for the Bureau of Reclamation's Water and
    Related Resources program is $45 million more than their request for
    fiscal year 2003. It is $150 million less than has been called for by
    the ``Invest in the West'' Coalition, a coalition of nine western water
    organizations that are involved in the full array of western water
    issues.
        The ``Invest in the West'' goal, one with which I agree, is to
    raise the Bureau's Water and Related Resources Budget to $1 billion by
    the end of fiscal year 2005. This is simply a goal to restore the
    budget to previous levels. The erosion of the Bureau's budget during
    the 1990s has created problems across the west for virtually all of its
    constituents.
                   budget impacts on garrison diversion unit
        At this point, I would like to shift to the particulars of the
    budget as it impacts the Garrison Diversion program and some specific
    projects within the State of North Dakota. Let me begin by reviewing
    the various elements within the current budget request and then discuss
    the impacts the current level of funding will have on the program.
        Attachment 1 shows the funding history over the last 7 years for
    the Garrison Diversion Unit. The average is approximately $27 million.
    The President's budget request for fiscal year 2004 is $17.314 million.
    A continuation of this trend is a formula for disaster. The President's
    budget request does not even maintain the historic funding level and
    ignores the needs of the current programs and does not keep up with
    price increases expected in major programs as delays occur.
    Fortunately, Congress saw fit to provide that the unexpended
    authorization ceilings would be indexed annually to adjust for
    inflation in the construction industry. The proposed allocation to the
    indexed programs in the President's budget is zero. If a modest 2
    percent inflation factor is assumed, the increase will be $8 million
    for MR&I and $2 million for the Red River Valley phase. Simply put,
    with the current request, we will lose ground on the completion of
    these projects.
        This year, the District is asking the Congress to appropriate a
    total of $61.3 million for the Project. Attachment 2 is a breakdown of
    the elements in the District's request. To discuss this in more detail,
    I must first explain that the Garrison Diversion budget consists of
    several different program items. For ease of discussion, I would like
    to simplify the breakdown into three major categories. The first I
    would call the base operations portion of the budget request.
    Attachment 3 contains a breakdown of the elements in that portion of
    the budget. This amount is nominally $20 million annually. However, as
    more Indian MR&I projects are completed, the operation and maintenance
    costs for these projects will increase and create a need that will need
    to be addressed.
        The second element of the budget is the MR&I portion. This consists
    of both Indian and non-Indian funding. The Dakota Water Resources Act
    contains an additional $200 million authorization for each of these
    programs. For discussion purposes, I have lumped them together and
    acknowledged that, however each program proceeds, it is our intent that
    each reaches the conclusion of the funding authorization at
    approximately the same time. We believe this is only fair.
        The MR&I program consists of a number of medium-sized projects that
    are independent of one another. Project costs generally run around $20
    million. Some are, of course, smaller and others somewhat larger. One
    that is considerably larger is the NAWS Project. The first phase of
    this project is under construction. The optimum construction schedule
    for completion of the first phase has been determined to be 5 years.
    The total cost of the first phase is $66 million. At a 65 percent cost
    share, the Federal funding needed to support NAWS is $43 million. On
    the average, the annual funding for the NAWS Project alone is over $8
    million. Four other projects have been approved for future funding, and
    numerous projects on the reservations are ready to begin construction.
    These requests will all compete with one another. It will be a delicate
    challenge to balance these projects. Nevertheless, we believe that once
    a project is started, it needs to be pursued vigorously to completion.
    If not, we simply run up the cost and increase the risk of
    incompatibility among the working parts.
        An example of the former would be the certain impact of the
    increased cost of construction over time through inflation, as well as
    increased engineering and administration costs.
        The third element of the budget is the Red River Valley Water
    Supply Project (RRV) construction phase. The Dakota Water Resources Act
    authorized $200 million for the construction of facilities to meet the
    water quality and quantity needs of the Red River Valley communities.
    It is my belief that the final plans and authorizations, if necessary,
    should be expected in approximately 5 years. This will create an
    immediate need for increased construction funding.
        This major project, once started, should be pursued vigorously to
    completion. The reasons are the same as for the NAWS project and relate
    to good engineering construction management. Although difficult to
    predict at this time, it is reasonable to plan that the RRV project
    features, once started, should be completed in approximately 7 years.
    This creates a need for an additional $25 million. Fortunately, it
    appears the RRV project start will probably follow the completion of
    the NAWS first phase.
        Using these two projects as examples sets up the argument for a
    steadily increasing budget. First, to accelerate the MR&I program in
    early years to assure the timely completion of the NAWS project and
    then to ready the budget for a smaller MR&I allocation when the RRV
    project construction begins.
        Attachment 4 illustrates the level of funding for the two major
    items, MR&I and RRV. It is quickly apparent that if a straight-line
    appropriation is used for each, a funding spike will occur in the sixth
    year. This is when an additional $25 million will suddenly be needed
    for the RRV program. It is simply good management to blend these needs
    to avoid drastic hills and valleys in budget requests. By accelerating
    the construction of NAWS and other projects, which are ready for
    construction during the early years, some of the pressure will be off
    when the RRV project construction funding is needed. Over time, a
    smoother, more efficient construction program will result.
        Attachment 5 shows such a program. It begins with a $61.3 million
    budget this year and gradually builds to over $90 million when the RRV
    construction could be in full swing (fiscal year 2008). Mr. Chairman,
    this is why we believe it is important that the budget resolution
    recognize that a robust increase in the budget allocation is needed for
    the Bureau of Reclamation. We hope this testimony will serve as, at
    least, one example of why we fully support the efforts of the ``Invest
    in the West'' campaign to increase the overall allocation by $150
    million in fiscal year 2004 and, over time, an increase totaling $1
    billion.
        The Bureau of Reclamation, Rural Development, Garrison Diversion
    Conservancy District, State Water Commission and local rural water
    districts have formed a formidable alliance to deal with the lack of a
    high quality, reliable water source throughout much of North Dakota.
    These cost-effective partnerships of local control, statewide guidance
    and Federal support have combined to provide safe, clean, potable water
    to hundreds of communities and thousands of homes across North Dakota.

        attachment 2.--justification for $61.3 million gdu appropriation
                                fiscal year 2004
        Northwest Area Water Supply is under construction after 15 years of
    study and diplomatic delay. Construction of first phase is estimated to
    be $66 million.
        Designs are based on a 5-year construction period; thus, $12
    million is needed for NAWS alone. Indian MR&I programs should be
    approximately the same.
        Ramsey County expansion, Southwest Pipeline, and Williston Water
    Treatment Plant are under construction.
        Red River Valley special studies are underway and need to be
    accelerated.

                                  [In millions]
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    OPERATION AND MAINTENANCE OF INDIAN MR&I SYSTEMS PLUS               $3.4
     JAMESTOWN DAM..........................................
    BREAKDOWN OF $57.9 MILLION CONSTRUCTION REQUEST:
        Operation and Maintenance of Existing Supply System.             4.8
        Wildlife Mitigation & Natural Resources Trust.......             4.4
        Red River Valley Special Studies and EIS............             1.0
        Indian and non-Indian MR&I..........................            39.0
        Indian Irrigation...................................             3.2
        Recreation..........................................             0.5
        Under financing 9.5 percent.........................             5.0
                                                             ---------------
          Total for Construction............................            57.9
                                                             ---------------
          Grand Total.......................................            61.3
    ------------------------------------------------------------------------

    attachment 3.--elements of the base operations portion of the garrison
                     diversion unit budget fiscal year 2004

                                  [In millions]
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Operation and Maintenance of Indian MR&I Systems and                $3.4
     Jamestown Dam..........................................
    Operation and Maintenance of Existing GDU Facilities....             4.8
    Funding of Natural Resources Trust and Remaining                     4.4
     Wildlife Mitigation Programs...........................
    Indian Irrigation.......................................             3.2
    Recreation..............................................             0.5
    Under financing at 9.5 percent..........................             5.0
                                                             ---------------
          Total.............................................            21.3
    ------------------------------------------------------------------------

                                     ______

          Letter From the North Dakota Rural Water Systems Association
                                Bismarck, North Dakota, March 26, 2003.
    Gale Norton,
    U.S. Dept. of Interior, Washington, DC 20240.
        Dear Ms. Norton: The North Dakota rural water community would
    appreciate your assistance and support to restore rural water funding
    for the fiscal year 2004 and re-establish a firm rural water supply
    function of the Bureau of Reclamation (BOR) for 2005 and beyond.
        North Dakota has a healthy relationship with the BOR and has worked
    side-by-side in the development and building of rural water systems.
    The North Dakota State Water Commission, Garrison Diversion Conservancy
    District, BOR, and project sponsors have successfully built rural water
    systems in a team effort throughout North Dakota.
        This unique team concept has delivered water through pipeline
    projects to small communities as well as to rural residents at
    responsible costs. North Dakota rural residents are willing to pay a
    reasonable cost-share to complete current projects and begin future
    projects. The EPA's household affordability ratio states water rates
    should be 1.5 percent to 2.5 percent of a household's median income to
    be considered affordable. The attached document provides information
    documenting household water rate affordability ratios that range from
    2.07 percent to 2.31 percent. These percentiles weigh on the high side
    of what the EPA suggests is affordable.
        The Southwest Pipeline Project provides treated drinking water via
    2,600 miles of pipeline and serves 23 communities and more than 2,300
    rural residents. The Federal cost-share of this project is $7,200 per
    connection. The life of a water system is estimated at 40 years. $7,200
    per connection divided by 40 years equals an investment by the Federal
    Government of $180 per year per connection. North Dakota has a long
    list of additional rural water projects that reflect similar economics.
    Is $180 per year per connection too much for the Federal Government to
    invest to sustain residents in rural North Dakota, which ranks 4th in
    the harvesting of our Nation's principal crops?
        New Federal drinking water regulations have increased the cost and
    complexity of the water treatment and distribution process.
    Increasingly, small communities find that their best and most efficient
    solution for safe drinking water is to obtain their water supply from a
    rural water system. Small communities simply cannot afford to comply
    with the Federal mandates in many situations. In an effort to comply
    with the Safe Drinking Water Act, communities with populations of less
    than 500 will have to invest more than $1 million in treatment
    facilities. Rural water systems provide a dependable supply of treated
    drinking water to communities and rural residents from centralized
    treatment facilities resulting in a very cost effective way to treat
    water.
        Drought conditions have plagued the west, southwest, and central
    areas of North Dakota. Indications are that this drought pattern will
    continue and is moving east as well. The need for an abundant supply of
    quality water is serious.
        The Dakota Water Resources Act authorized an additional $200
    million for state MR&I and $200 million for tribal MR&I projects. North
    Dakota has started a process of long-range water development planning
    with many rural water systems in the construction phase. The Dakota
    Water Resources Act is the basis of our planning. North Dakota has had
    a healthy relationship with the BOR and is willing to share in the cost
    of developing and building water systems to sustain our North Dakota
    heritage.
                Respectfully submitted,
                                                Stuart Carlson,
                                                    Executive Director.

                                     ______

           Prepared Statement of the Oregon Water Resources Congress
        The Oregon Water Resources Congress (OWRC) was established in 1912
    as a trade association to support member needs, to protect water rights
    and encourage conservation and water management statewide. OWRC
    represents non-potable agriculture water suppliers in Oregon, primarily
    irrigation districts, as well as member ports, other special districts
    and local governments. The association represents the entities that
    operate water management systems, including water supply reservoirs,
    canals, pipeline and hydropower production.
                             bureau of reclamation
        For this reason we support an increase of $150 million above the
    administration's proposed budget request for the Bureau of
    Reclamation's programs westwide. The administration's current budget
    proposal is $45 million less than Congress provided in the 2003 omnibus
    appropriations for Reclamation.
        With many western States confronting significant budget deficits,
    increased emphasis is being placed on targeted Federal aid. Oregon is
    facing a $2 billion deficit, or about 16 percent of the State's general
    fund budget. We also support the Western Water Initiative of the Bureau
    of Reclamation.
                                  oregon needs
    Conservation Implementation
        The largest need for funding for OWRC's members is to implement
    water conservation projects. Irrigation districts in Oregon continue to
    line and pipe open waterways to enhance both water supply and water
    quality. But the ability to continue this work depends on some public
    investment in return for the public benefits. Districts have conserved
    water and provided some of the saved or conserved water to benefit the
    fishery instream while also building reservoir supplies. Oregon
    districts hope to continue this work through enhanced conservation, but
    to do that the districts need support to implement effective
    alternative programs such as pilot water banking projects (Klamath
    Basin and the Deschutes Basin), energy reduction programs, additional
    measurement and telemetry monitoring, etc.
    Rogue River Basin
                Medford Irrigation District
                Rogue River Valley Irrigation District
                Talent Irrigation District
                Grants Pass Irrigation District
        Three contiguous districts in the Rogue Project (Medford, Rogue
    River and Talent irrigation districts) are requesting $1 million to
    fund the Bear Creek and Little Butte Optimization Study by the Bureau
    of Reclamation. That study will propose a plan to conserve water
    throughout the basin by lining and piping canals within the districts,
    considering the potential for raising Howard Prairie Dam and the
    feasibility of other conservation options.
        The Grants Pass Irrigation District (GPID) continues to address
    conservation and the eventual outcome of the Savage Rapids Dam. In the
    2004 budget, $3,700,000 is requested for the Rogue River Water
    Conservation Project of the Grants Pass Irrigation District as part of
    the Department of Agriculture budget for the Natural Resources
    Conservation Service, or the Western Water Initiative or other
    applicable programs. If that amount is not fully funded, any unfounded
    amount would be requested as part of an ongoing multiyear request. This
    amount is not included in the administration's requested budget. The
    request is supported by the Governor's office, as well as conservation
    and recreation interests. The district will provide matching funds.
        The GPID funding will be used to install piping or lining in 68.4
    miles of existing open ditches and canals to reduce water seepage
    losses. These actions will eliminate 53 percent of seepage and reduce
    the District's diversion from the Rogue River by approximately 8,300
    acre feet of water annually.
    Deschutes Basin
                Tumalo Irrigation District
                Deschutes Resource Conservancy
                Ochoco Irrigation District
        The Tumalo Irrigation District has been piping canals and replacing
    other water management structures to achieve conservation measures
    districtwide. Public Law 106-496 authorized $2.5 million for the
    current portion of the work to be accomplished. The district requests
    $882,500 as the final portion of the authorized funds.
        In the 2002 budget Congress appropriated $300,000 but the Bureau of
    Reclamation reduced the amount to $275,000. In the 2003 budget Congress
    appropriated $1,300,000 but Reclamation reduced that amount to
    $750,000. As this work is already in the engineering and construction
    process, the shortfall is delaying the project and the $882,500 is
    needed to complete the conservation package.
        The Ochoco Irrigation District (Prineville, Oregon) has worked with
    the Bureau of Reclamation, along with the North Unit Irrigation
    District (Madras, Oregon) for the better part of a decade to determine
    the use of unallocated water in the district's reservoir. Approximately
    $200,000 in additional dollars is required to finish the project.
    Reclamation earlier invested $500,000 in the process, which has not
    been completed.
        The Deschutes Resource Conservancy has requested $2 million for
    fiscal year 2004. The DRC is a non-profit corporation authorized by
    Congress to receive technical assistance and financial support from
    Federal agencies to support conservation and restoration in the
    Deschutes Basin of Central Oregon, founded by 7 irrigation districts,
    the Warm Springs Confederated Tribe, and others to maximize
    collaborative efforts in the basin. Since 1998, the DRC has granted
    irrigation districts and their water users almost $1 million in funding
    for piping and water conservation work. The current request includes
    partial funding of a pilot water banking project to enhance the 8,000
    acre feet of leased water developed in 2001 and 2002. Expectations for
    storage enhancement in 2003 exceed earlier program results.
        From the funding request, in addition to the water bank, the DRC
    hopes to fund pilot water management projects within the districts for
    $550,000, providing telemetry and monitoring devices, restoring private
    lands on tributaries in the Ochoco district, providing tailwater
    management to enhance water quality in other districts, and evaluating
    the feasibility of generating hydropower within irrigation pipelines.
    Umatilla/Columbia Basins
                Stanfield Irrigation District
                Westland Irrigation District
                Hermiston Irrigation District
                West Extension Irrigation District
        The Umatilla districts draw their water supply from the Umatilla
    and Columbia Rivers. The districts are in the process of completing
    boundary changes and seeking supplemental contracts as part of the
    conclusion of the boundary process. This process has been on going for
    a decade. The districts are not proposing new legislation or funding
    but appreciate legislative oversight to get this project completed. If
    the Bureau of Reclamation cannot accommodate these needs within its
    existing budget, then additional funding should be provided to expedite
    the conclusion of this long on-going need.
    Eastern Basins
                Burnt, Malheur, Owyhee and Powder River Basins Water
                        Optimization Study
        The irrigation districts in these basins continue to seek support
    for this optimization study to seek alternatives for more effective
    water management through conservation projects and enhancement of water
    supply. This project has been identified by the Bureau of Reclamation
    as a regional need.
    Klamath Basin
        The Klamath Project districts continue to require support of their
    Water Bank proposal, fishscreen funding and other projects within
    Reclamation's budget for the Mid-Pacific Division.
        In addition to those needs, the Enterprise Irrigation District in
    the Klamath Basin has specific needs for funding two small projects
    totaling a Federal request of $98,179. To eliminate water losses and
    improve water management and control, the district requires $64,916 for
    a repair and enhancement of a particular lateral in its system. The
    district will be providing its portion of the cost share in addition to
    that amount. Another portion of the system can be repaired and upgraded
    by provision of $33,263. The district will provide additional cost
    share funds.
        Thank you for the opportunity to provide testimony regarding the
    2004 Federal budget. While we support existing proposals, we feel that
    given the record-setting droughts we have suffered in the past few
    years and in anticipation of another drought this year, we need to
    support an increased budget to stabilize the Nation's water supply for
    the many needs it must meet. Providing a stable water supply feeds the
    economy locally and at the national level.
                                     ______

          Prepared Statement of the National Urban Agriculture Council
        Mr. Chairman, Members of the subcommittee, I am Roger Waters,
    President of the National Urban Agriculture Council (NUAC). NUAC is a
    national nonprofit organization established as a center for the
    promotion and implementation of effective water management in the urban
    landscape.
        NUAC's objective is to enhance the environment by increasing
    education, training, and research on the use of recycled water and
    water conservation techniques that produce healthier and more vigorous
    landscapes while conserving potable water supplies. NUAC is
    headquartered in Washington, DC. NUAC is a service and product oriented
    council that is involved with quality research, technology development,
    training, community outreach, and program and policy development.
    Additionally, NUAC partners with our members and State and Federal
    agencies to address the related issues of water availability, drought
    preparedness and water management policy.
        I would like to offer testimony on six Bureau of Reclamation
    programs: Drought Emergency Assistance; Efficiency Incentives, Water
    Management and Conservation, Technical Assistance to States, Soil and
    Moisture Conservation, and the Title XVI--Water Reclamation and Reuse.
        I would like to request that the subcommittee support efforts to
    increase the overall Water and Related Resources budget of the Bureau
    of Reclamation by $150 million above the administration's request in
    fiscal year 2004. NUAC is part of the Western Water Industry's ``Invest
    In the West'' campaign that aims to substantially increase the Bureau's
    Water and Related Resources Budget to $1 billion by fiscal year 2005 to
    meet critical water supply improvements throughout the western United
    States. NUAC is proud to be a part of the important campaign on this
    issue that includes the Western Coalition of Arid States, the WateReuse
    Association, the Family Farm Alliance, the National Water Resources
    Association, the Association of California Water Agencies, the Oregon
    Water Resources Congress, the Upper Missouri Water Association and the
    Idaho Water Users Association.
                          drought emergency assistance
        NUAC was an active participant in the Interim National Drought
    Policy Commission's efforts that produced a report and plan for moving
    forward on recommendations for a national drought policy for our
    country. Part of NUAC's core mission is to serve as a center for the
    acceptance, promotion, and implementation of practical, science-based
    water resource management and conservation measures. An important
    element of our mission is making sure water users are prepared for the
    eventuality of drought. We have been supportive of the efforts of the
    Commission to produce such a vision as part of their recommendations in
    the final report.
        Federal response to drought planning has great impact on the
    economic strength of our Nation. The USDA in the Global Climate Change
    Prevention Act of 1990 underscored the need to address drought related
    information and to ``coordinate research and share expertise with other
    Federal agencies working on issues related to global change''. NUAC
    believes that other Federal agencies require similar funding to meet
    research objectives and prepare for the challenges of drought planning.
    Droughts drastically impact the availability of water resources for all
    purposes. The Agricultural Research Service has identified the drought
    of 1988 as the most costly natural disaster in U.S. history with
    economic losses estimated at more than $39 billion.
        The Bureau of Reclamation requested $1,120,000 for fiscal year
    2004. NUAC believes and would ask that Congress consider, that given
    the ongoing and likely future potential for droughts throughout our
    country, a budget of $10 million be included in this program for fiscal
    year 2004. The Bureau of Reclamation and the Department of Agriculture
    appear to be the agencies best suited to working with State and local
    governments, tribes and local water users on the issue of drought.
    Through active planning these agencies future will save the Federal
    Government from the more costly future expense of emergency bailouts to
    recuperate from the devastation of drought. Funding commensurate with
    the responsibilities of drought planning needs to be provided to the
    Bureau in order for the agency to meet its objectives.
                         efficiency incentives program
        NUAC is supportive of this program that provides a partnership
    among the Bureau of Reclamation, water users and States to implement
    water use efficiency and conservation solutions that are tailored to
    local conditions. The Bureau of Reclamation requested only $3,265,000
    for the program for fiscal year 2004. We would like to see the program
    increased up to $5,000,000 so that a greater amount of work can take
    place among water districts throughout the west for the necessary
    planning, assistance, training and development of water conservation
    plans and water efficient landscapes. The need for this training was a
    key impetus upon which NUAC was founded. Water resource managers and
    policy makers are increasingly challenged by management issues.
    Paramount to making good management decisions is the availability of
    sound scientifically based information. This information is the
    keystone to the development of practical and environmentally sound
    programs that are cost effective and socially responsible.
                   water management and conservation program
        On the surface this program appears to be a duplication of other
    Bureau of Reclamation assistance programs. The Bureau of Reclamation
    requested $6,639,000 for this program for fiscal year 2004. A question
    that has arisen is whether the Bureau of Reclamation has construction
    authority for funds provided to districts under the program. This is an
    issue we would like the Committee to clear up so projects could go
    forward. We believe the funding requested is less than adequate and
    would suggest it be increased to $10 million. However, if construction
    is going to occur under this program, we would suggest a cap on the
    size of the project receiving such funding, so it does not become a
    program for the few and not the many.
                       technical assistance to the states
        NUAC is concerned with how this program has been cut by Congress
    over the past several years. We believe the data collection and
    analyses for management of water and related land resources that occurs
    with this funding is extremely important in the absence of a national
    water policy. We would ask that the request of $1,908,000 not be cut.
    We would further request that funding be increased to $3 million to
    help make up the shortfall that has occurred from previous cuts.
                         soil moisture and conservation
        The modest amount of the Bureau of Reclamation's request, $267,000
    makes this program appear unimportant. NUAC would like to see this
    increased by a modest amount to $500,000 with the caveat that this
    increase be tied to assisting in implementing the recommendations of
    the final National Drought Policy Commission Report. We believe this
    program should be examined to see if it can assist in the proper site
    management of Federally funded structures that require water for urban
    landscapes and horticultural purposes.
                     title xvi--water reclamation and reuse
        NUAC is supportive of the funding that has been provided for the
    ongoing projects authorized by the Title XVI Program. The $12,680,000
    budget request is substantially below the $36 million provided by
    Congress for fiscal year 2002 and we would request that you consider
    increasing the funding at least up to that level this year. The funding
    provided for research, new starts, and feasibility studies needs to be
    examined from the standpoint of how long it is going to take to fund
    the existing projects, instead of looking to increase the number of
    projects. We believe there is a need for a serious discussion among
    water policy leaders on the methods to fund the future of this program
    in a timely manner. With regard to research, we see this as an area for
    the private and public sector to move forward on their own. It is
    important that discussions continue on how and for what type of
    research needs to take place and the role Reclamation should play in
    that agenda. We believe the results of those discussions would be
    beneficial in terms of laying the groundwork for any future legislative
    changes to the program and NUAC looks forward to continuing to be a
    part of that effort.
                            western water initiative
        We note with some interest the new Western Water Initiative that is
    proposed for fiscal year 2004 for $11 million. The Budget documents do
    not give a lot of detail in terms of how this initiative is going to
    actually work. We believe it is important for the Bureau to report on
    an annual basis what they have done with the money, who has received
    the funding and the expected results from the funding that is provided.
    We believe it is important to put additional funding into water
    management and conservation, as well as the science and technology
    program.
        An issue that we have with the Initiative is that it was developed
    without any input from the stakeholders in the Reclamation program. We
    spent considerable time and resources being involved in the Strategic
    Plan development of the Bureau and the Department of the Interior. This
    Initiative is being proposed and a direction being set that could have
    been more fully developed and targeted if an opportunity had been
    provided for such involvement. It raises the question of why this
    funding was not directly incorporated into the existing program and how
    it will be integrated into those programs' missions.
        Thank you for the opportunity to provide testimony for the record
    on these programs.
                                     ______

     Prepared Statement of the Central Arizona Water Conservation District
                                    (CAWCD)
        Mr. Chairman, the Central Arizona Water Conservation District
    (CAWCD) is pleased to offer the following testimony regarding the
    fiscal year 2004 Energy and Water Development Appropriations Bill.
        The Central Arizona Project or ``CAP'' was authorized by the 90th
    Congress of the United States under the Colorado River Basin Project
    Act of 1968. The CAP is a multi-purpose water resource development
    project designed to deliver the remainder of Arizona's entitlement of
    Colorado River water into the central and southern portions of the
    State for municipal and industrial, agricultural, and Indian uses. The
    Bureau of Reclamation (Reclamation) initiated project construction in
    1973, and the first water was delivered in 1985. The CAP is now
    delivering its full normal year entitlement of 1.5 million acre-feet
    and Arizona is utilizing its full Colorado River apportionment of 2.8
    million acre-feet.
        CAWCD was created in 1971 to contract with the United States to
    repay the reimbursable construction costs of the CAP that are properly
    allocable to CAWCD, primarily non-Indian water supply and commercial
    power costs. CAWCD also operates and maintains the project. Its service
    area is comprised of Maricopa, Pima, and Pinal counties. CAWCD is a
    tax-levying public improvement district, a political subdivision, and a
    municipal corporation governed by a 15-member Board of Directors
    elected from the three counties it serves. CAWCD's Board members are
    public officers who serve without pay and represent roughly 80 percent
    of the water users and taxpayers of the State of Arizona.
        Project repayment is provided for through a 1988 Master Repayment
    Contract between CAWCD and the United States. Project repayment began
    in 1994 for Stage 1 and in 1997 for Stage 2. To date, CAWCD has repaid
    $685 million of CAP construction costs to the United States.
        In 2000, CAWCD and Reclamation successfully negotiated a settlement
    of the dispute regarding the amount of CAWCD's repayment obligation for
    CAP construction costs. This dispute has been the subject of ongoing
    litigation in United States District Court in Arizona since 1995. The
    settlement provides a 3-year timeframe, ending in May 2003, in which to
    complete several other activities that are necessary for the settlement
    to become final, including a final Indian water rights settlement for
    the Gila River Indian Community. In 2002, when it became apparent that
    these activities would not be completed by the May 2003 deadline, CAWCD
    initiated discussions with representatives of the Department of the
    Interior to extend the terms of the repayment stipulation. The
    Department of the Interior has now agreed to extend the terms of the
    repayment stipulation to May 2012 which should allow the United States
    sufficient time to complete the necessary activities.
                            central arizona project
        CAP construction activities are not yet complete. In its fiscal
    year 2004 budget request, Reclamation seeks $34,087,000 for the CAP.
        CAP Indian Distribution Systems.--$23,048,000 is requested for the
    construction of Indian distribution systems. CAWCD continues to support
    appropriations necessary to ensure timely completion of all CAP Indian
    distribution systems. Most of the CAP non-Indian distribution systems
    were completed over 10 years ago; however, many of the Indian systems
    remain incomplete. CAWCD supports full funding for this important
    program.
        CAP Biological Opinion Costs.--$6,787,000 is earmarked to fund
    activities associated with implementation of a 1994 biological opinion
    of the U.S. Fish and Wildlife Service (FWS) pertaining to delivery of
    CAP water to the Gila River Basin and for native fish activities on the
    Santa Cruz River. Historically, CAWCD has objected to Reclamation's
    continued spending in these areas. Both environmental groups and CAWCD
    challenged the 1994 biological opinion in court. However, given its
    settlement with the United States over CAP costs, and a final judgment
    in the litigation concerning the 1994 biological opinion, CAWCD
    supports Reclamation's budget request to allow it to complete
    Endangered Species Act compliance for CAP deliveries in the Gila River
    basin.
        Environmental Activities at New Waddell Dam.--Reclamation is again
    requesting funds ($115,000) to complete a reservoir limnology follow-up
    study at Lake Pleasant, continue Fish and Wildlife Coordination Act
    activities, and support non-contract costs (Reclamation staff costs).
    According to Reclamation, this is the last environmental impact
    statement commitment for New Waddell Dam. Reclamation has carried this
    funding request in its budget justification documents for the past 5
    years with no apparent progress toward its completion. CAWCD would urge
    Reclamation to expedite the completion of this study and close out its
    environmental program at New Waddell Dam.
        Environmental Activities at Modified Roosevelt Dam.--Reclamation is
    again requesting funds ($2,027,000) to complete environmental
    activities at Modified Roosevelt Dam. This includes Endangered Species
    Act compliance for the southwestern willow flycatcher and support for
    Reclamation's non-contract costs. As is the case with New Waddell Dam,
    these activities have been ongoing for at least 5 years with no
    apparent end in sight. While CAWCD supports Reclamation's activities to
    comply with the Endangered Species Act at Modified Roosevelt Dam, CAWCD
    would also urge Reclamation to expedite the completion of these
    activities and close out its environmental program at Modified
    Roosevelt Dam.
        Tucson Reliability Division.--Reclamation is requesting $390,000 to
    continue coordination and design elements for the water supply
    reliability features of the Tucson Reliability Division, also known as
    Tucson Terminal Storage. The budget justification documents indicate
    that these funds will be used to complete the planning report,
    environmental impact statement, and designs for the reservoir. CAWCD is
    not aware of any Reclamation decisions to actually construct
    reliability features in the Tucson area. The repayment stipulation
    requires that, prior to construction of any such feature, CAWCD must be
    consulted regarding the development of these features and the
    associated repayment obligation. While CAWCD supports the continuation
    of planning efforts to identify acceptable reliability features for the
    Tucson area, we expect to be consulted as planning activities proceed.
        Recreational Trails.--CAWCD notes that Reclamation is requesting
    $702,000 for the development of recreational trails along portions of
    the Hayden Rhodes Aqueduct in Phoenix and Scottsdale. An additional
    $600,000 is requested for the development of recreational trails along
    portions of the Tucson Aqueduct in Pima County. $439,000 is identified
    to support Reclamation's non-contract costs associated with various
    land management activities throughout the CAP service area. CAWCD
    continues to experience significant land management conflicts at the
    CAP interface with private property owners. These conflicts might be
    remedied through the development of an appropriate trails system. CAWCD
    strongly supports Reclamation's activities in this area.
                     lower colorado river operations--mscp
        In its fiscal year 2004 budget request, Reclamation also seeks
    $13,822,000 for its Lower Colorado River Operations Program. This
    program is necessary for Reclamation to continue its activities as the
    ``water master'' on the lower Colorado River. In addition, this program
    provides Reclamation's share of funding to complete the Lower Colorado
    River Multi-Species Conservation Program (MSCP). Of the $13,822,000
    sought, $2,769,000 is for administration of the Colorado River,
    $1,821,000 is for water contract administration and decree accounting,
    and $7,748,000 is for fish and wildlife management and development. The
    fish and wildlife management and development program includes
    $5,094,000 for the MSCP; an additional $4,000,000 will be contributed
    by non-Federal entities.
        CAWCD supports Reclamation's budget request for the Lower Colorado
    River Operations Program. The increased funding level is necessary to
    support the MSCP effort as well as environmental measures necessary to
    fully implement the interim surplus criteria for the lower Colorado
    River. Once reinstated, the interim surplus guidelines would allow the
    Secretary of the Interior to declare limited Colorado River surpluses
    through 2016 to assist California in gradually reducing its use of
    Colorado River to its annual apportionment of 4.4 million acre-feet.
    These are both critical programs upon which Lower Colorado River water
    and power users depend.
        The MSCP is a cost-shared program among Federal and non-Federal
    interests to develop a long-term plan to conserve endangered species
    and their habitat along the Lower Colorado River from Lake Mead to
    Mexico. CAWCD is one of the cost-sharing partners. Development of this
    program will conserve hundreds of threatened and endangered species
    and, at the same time, allow current water and power operation to
    continue. CAWCD strongly supports Reclamation's budget request for
    development and implementation of the MSCP.
             colorado river basin salinity control project--title i
        In its fiscal year 2004 budget request, Reclamation is requesting
    $11,250,000 under the Colorado River Basin Salinity Control Project--
    Title I. This program supports the operation of the Yuma Desalting
    Plant (YDP), maintaining the U.S. Bypass Drain and the Mexico Bypass
    Drain, and ensuring that Mexican Treaty salinity requirements are met.
    Currently, Reclamation is not operating the YDP. Instead, Reclamation
    is allowing all Wellton-Mohawk drainage water (over 100,000 acre-feet
    per year) to bypass the YDP and flow to the Santa Clara Slough in
    Mexico. These flows are in excess of Mexican Treaty requirements and
    represent a significant depletion of the Colorado River water currently
    in storage. Continuing this practice will eventually reduce the amount
    of water available to the Central Arizona Project, the lowest priority
    water user in the Colorado River basin, and increase the risk of future
    shortages for CAP water users. The Colorado River system is now in its
    fourth consecutive year of below normal runoff, and water levels in
    Lake Powell and Lake Mead are at their lowest levels in 30 years. In
    fact, water year 2002 was the lowest runoff year in recorded history on
    the Colorado River. Reclamation's operation of the YDP would conserve
    an additional 100,000 to 120,000 acre feet per year of Colorado River
    water for use by the lower basin States. This amount is roughly equal
    to the City of Phoenix's full annual entitlement to CAP water.
        Reclamation acknowledges that the House of Representatives Report
    accompanying the fiscal year 1995 Energy and Water Development
    Appropriations bill directed Reclamation to maintain the YDP in such a
    manner as to be capable of operating at one-third capacity with a 1-
    year notice of funding. While the Plant was operated at one-third
    capacity for a few months in 1992, it has not been operational at any
    time since that test operation. Even though Congress has annually
    appropriated several million dollars for Reclamation to maintain and
    rehabilitate the YDP, Reclamation now states in a draft report recently
    provided to CAWCD and other interested parties that it would require
    $11 million for specific rehabilitation and modernization costs and 24
    to 30 months to bring the YDP to operational readiness at one-third
    capacity. An additional $15 million and an additional 12 to 24 months
    would be needed to make the Plant fully operational. We request that
    Reclamation be directed to bring the Plant to a state of readiness as
    soon as possible. We believe that Reclamation can achieve one-third
    operational capacity in 24 months within the funding limits currently
    requested if it directs those monies toward that goal.
        The $11,225,000 fiscal year 2004 budget request contains several
    activities that could and should be stopped and those expenditures
    directed toward making the plant operational using up-to-date
    technology that will enhance both plant capacity and efficiency as well
    as reduce operating cost:
      --$751,000 of the request is listed as Water and Energy Management
            and Development. It is further described as technology research
            for lower cost operation of the YDP. All of this amount could
            be dedicated to making the plant operational.
      --$1,773,000 is listed as Facility Operations. While much of these
            activities are directed toward Title I features other than the
            YDP, part of the expenditures are for Pilot system operation
            and research and testing of the Water Quality Improvement
            Center. Some of these expenditures could be redirected to
            making the plant operations.
      --$5,524,000 is listed as Facilities Maintenance and Rehabilitation
            and is further described as ``continuous efforts to ensure the
            YDP can operate for treaty and other Federal requirements.''
            Based on the activities described, essentially all of these
            dollars could and should be directed to making the YDP
            operational.
      --$3,242,000 is described as being needed to continue a long term
            program to bank water, to continue design deficiency
            corrections, and to continue the YDP permitting and
            environmental compliance process. There is no ongoing program
            to bank water. Any water banking program would involve the
            Interstate Water Banking program in Arizona. No such program is
            planned in Arizona for YDP purposes. The other two activities
            in this category already contribute to making the YDP
            operational; therefore, all of these funds could and should be
            directed toward making the plant operational.
        A Reclamation analysis of Title I expenditure in 2001 indicates
    less than $2,500,000 was spent for maintenance of facilities or
    activities other than the YDP. That information and the analysis of the
    $11,250,000 fiscal year 2004 funding requests demonstrates that
    Reclamation could direct at least $8,000,000 of its fiscal year 2004
    funding request toward making the YDP operational.
        CAWCD welcomes this opportunity to share its views with the
    Committee, and would be pleased to respond to any questions or
    observations occasioned by this written testimony.
                                     ______

                   Letter From the Tumalo Irrigation District
                                                        March 28, 2003.
    Honorable Pete V. Domenici,
    Chair, Committee on Appropriations, Subcommittee on Energy and Water,
            SD-156 Dirksen Senate Office Building, Washington, DC 20510.
        Dear Chairman Domenici: The Tumalo Irrigation District (TID) in
    Bend, Oregon respectfully requests your support for inclusion of
    $882,000 in the fiscal year 2004 Energy and Water appropriations bill
    for the District's Bend Feed Canal Project. The 106th Congress
    authorized the U.S. Bureau of Reclamation to participate in the further
    construction associated with the project in the amount of $2.5 million.
    This amount would complete the Bureau's share of the project
    construction funding.
        The TID is proposing to continue and complete in this next fiscal
    year construction to pipe a critical portion of our open canals,
    essentially eliminating water loss and enhancing public safety along
    the project's approximate 14,500 foot length. The conserved water would
    be used to deliver enhanced water to the TID irrigators even in drought
    years, as they currently receive inadequate water in 8 of 10 years. It
    will also increase stream flows in Tumalo Creek and the Deschutes
    River.
        The TID Board of Directors has expressed its willingness to pay
    their share of the estimated $5 million project cost of this important
    project and have provided all of their share. We are concerned that no
    funding for the project was requested by the administration in their
    Fiscal Year 2004 Budget for the Bureau of Reclamation. Our request for
    $882,000 for fiscal year 2004 would allow us to complete the project in
    this next fiscal year which would benefit both the District and the
    general public. We appreciate the previous funding that we have
    received for work in this area and look forward to your favorable
    consideration of our request.
                Sincerely,
                                               Elmer McDaniels,
                                                               Manager.
                                     ______

     Prepared Statement of the Colorado River Basin Salinity Control Forum
             bureau of reclamation--fiscal year 2004 appropriation
        Colorado River Basin Salinity Control Forum's Recommendation:
      --Title II Program Authorized in 1995 (Public Law 104-20)--
            $17,500,000.
      --General Investigation Funds--Adequate Funding.
      --Operation and Maintenance--Adequate Funding.
        This testimony is in support of funding for the Title II Colorado
    River Basin salinity control program. Congress has designated the
    Department of the Interior, Bureau of Reclamation (Reclamation), to be
    the lead agency for salinity control in the Colorado River Basin. This
    role and the authorized program were refined and confirmed by the
    Congress when Public Law 104-20 was enacted. A total of $17,500,000 is
    requested for fiscal year 2004 to implement the needed and authorized
    program. Failure to appropriate these funds will result in significant
    economic damage in the United States and Mexico.
        The President's request for funding for fiscal year 2004 is
    $9,198,000 for this program. Studies have shown that implementation of
    the program has fallen behind the needed pace to control salinity
    concentrations. In previous years, the President has supported, and
    Congress has funded, a program at about $12 million. In recent years,
    the President's requests have dropped and this year's request, in the
    judgement of the Forum, is inappropriately low. Water quality
    commitments to downstream U.S. and Mexican water users must be honored
    while the Basin States continue to develop their Compact apportioned
    waters of the Colorado River. Concentrations of salts in the river
    cause hundreds of millions of dollars in damage in the United States
    and result in poorer quality water being delivered by the United States
    to Mexico. For every 30 mg/l increase in salinity concentrations, there
    is $75 million in additional damages in the United States. The Forum,
    therefore, believes implementation of the program needs to be
    accelerated to a level beyond that requested by the President.
        The program authorized by the Congress in 1995 has proven to be
    very successful and very cost effective. Proposals from the public and
    private sector to implement salinity control strategies have far
    exceeded the available funding and Reclamation has a backlog of
    proposals. Reclamation continues to select the best and most cost-
    effective proposals. Funds are available for the Colorado River Basin
    States' cost sharing for the level of Federal funding requested by the
    Forum. Water quality improvements accomplished under Title II of the
    Colorado River Basin Salinity Control Act also benefit the quality of
    water delivered to Mexico. Although the United States has always met
    the commitments of the International Boundary & Water Commission's
    (Commission) Minute 242 to Mexico with respect to water quality, the
    United States Section of the Commission is currently addressing
    Mexico's request for better water quality at the International
    Boundary.
        Some of the most cost effective salinity control opportunities
    occur when the USBR can improve irrigation delivery systems at the same
    time that the USDA's program is working with landowners (irrigators) to
    improve the on-farm irrigation systems. Through the newly authorized
    USDA EQIP program, adequate on-farm funds appear to be available and
    adequate USBR funds are needed to maximize the effectiveness of the
    effort.
                                    overview
        In 2000, Congress reviewed the program as authorized in 1995.
    Following hearings, and with administration support, the Congress
    passed legislation that increased the ceiling authorized by this
    program by $100 million. Reclamation has received cost-effective
    proposals to move the program ahead and the Basin States have funds
    available to cost-share up-front.
        The Colorado River Basin Salinity Control Program was authorized by
    Congress in 1974. The Title I portion of the Colorado River Basin
    Salinity Control Act responded to commitments that the United States
    made, through Minute 242, to Mexico concerning the quality of water
    being delivered to Mexico below Imperial Dam. Title II of the Act
    established a program to respond to salinity control needs of Colorado
    River water users in the United States and to comply with the mandates
    of the then newly legislated Clean Water Act. Initially, the Secretary
    of the Interior and Reclamation were given the lead Federal role by the
    Congress. This testimony is in support of adequate funding for the
    Title II program.
        After a decade of investigative and implementation efforts, the
    Basin States concluded that the Salinity Control Act needed to be
    amended. Congress revised the Act in 1984. That revision, while leaving
    implementation of the salinity control policy with the Secretary of the
    Interior, also gave new salinity control responsibilities to the
    Department of Agriculture, and to the Bureau of Land Management.
    Congress has charged the administration with implementing the most
    cost-effective program practicable (measured in dollars per ton of salt
    removed). The Basin States are strongly supportive of that concept as
    the Basin States cost share 30 percent of Federal expenditures up-front
    for the salinity control program, in addition to proceeding to
    implement their own salinity control efforts in the Colorado River
    Basin.
        The Colorado River Basin Salinity Control Forum (Forum) is composed
    of gubernatorial appointees from Arizona, California, Colorado, Nevada,
    New Mexico, Utah and Wyoming. The Forum has become the 7-State
    coordinating body for interfacing with Federal agencies and Congress to
    support the implementation of the program necessary to control the
    salinity of the river system. In close cooperation with the
    Environmental Protection Agency (EPA) and under requirements of the
    Clean Water Act, every 3 years the Forum prepares a formal report
    analyzing the salinity of the Colorado River, anticipated future
    salinity, and the program necessary to keep the salinities under
    control.
        In setting water quality standards for the Colorado River system,
    the salinity levels measured at Imperial, and below Parker, and Hoover
    Dams in 1972 have been identified as the numeric criteria. The plan
    necessary for controlling salinity and to reduce downstream damages has
    been captioned the ``plan of implementation.'' The 2002 Review of water
    quality standards includes an updated plan of implementation. The level
    of appropriation requested in this testimony is in keeping with the
    agreed upon plan. If adequate funds are not appropriated, State and
    Federal agencies involved are in agreement that damage from the higher
    salt levels in the water will be more widespread in the United States
    as well as Mexico and will be very significant.
                                 justification
        The $17,500,000 requested by the Forum on behalf of the seven
    Colorado River Basin States is the level of funding necessary to
    proceed with Reclamation's portion of the plan of implementation. In
    July of 1995, Congress amended the Colorado River Basin Salinity
    Control Act. The amended Act gives Reclamation new latitude and
    flexibility in seeking the most cost-effective salinity control
    opportunities, and it provides for utilization of proposals from
    project proponents as well as more involvement from the private as well
    as the public sector. The result is that salt loading is being
    prevented at costs often less than half the cost under the previous
    program. Congress recommitted its support to the revised program when
    it enacted Public Law 106-459. The Basin States' cost sharing up-front
    adds 43 cents for every Federal dollar appropriated. The federally
    chartered Colorado River Basin Salinity Control Advisory Council,
    created by the Congress in the Salinity Control Act, has met and
    formally supports the requested level of funding. The Basin States urge
    the subcommittee to support the funding as set forth in this testimony.
                         additional support of funding
        In addition to the funding identified above for the implementation
    of the most recently authorized program, the Salinity Control Forum
    urges the Congress to appropriate necessary funds needed to continue to
    maintain and operate salinity control facilities as they are completed
    and placed into long-term operation. Reclamation has completed the
    Paradox Valley unit which involves the collection of brines in the
    Paradox Valley of Colorado and the injection of those brines into a
    deep aquifer through an injection well. The continued operation of this
    project and other completed projects will be funded through Operation
    and Maintenance funds.
        In addition, the Forum supports necessary funding to allow for
    continued general investigation of the salinity control program. It is
    important that Reclamation have planning staff in place, properly
    funded, so that the progress of the program can be analyzed,
    coordination between various Federal and State agencies can be
    accomplished, and future projects and opportunities to control salinity
    can be properly planned to maintain the water quality standards for
    salinity so that the Basin States can continue to develop their
    Compact-apportioned waters of the Colorado River.
                                     ______

     Prepared Statement of the Fort Peck Assiniboine and Sioux Tribes and
                            Dry Prairie Rural Water
                        fiscal year 2004 budget request
        The Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural
    Water respectfully request fiscal year 2004 appropriations for the
    Bureau of Reclamation from the Subcommittee on Energy and Water
    Development. Funds will be used to construct critical elements of the
    Fort Peck Reservation Rural Water System, Montana, (Public Law 106-382,
    October 27, 2000). The amount requested is $14,486,000 as set out
    below:

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Missouri River Water Treatment Plant....................     $10,604,000
    Fort Peck Electrical, Meters, Easements.................         650,000
    Culbertson to Medicine Lake.............................       3,618,000
    Dry Prairie P Electrical, Meters, Easements.............         635,000
                                                             ---------------
          Total.............................................      15,507,000
                                                             ---------------
    Federal.................................................      14,486,000
    Non-Federal.............................................       1,021,000
    ------------------------------------------------------------------------

        The sponsor Tribes and Dry Prairie greatly appreciate the
    appropriations from the subcommittee for fiscal year 2003 that have
    permitted significant progress on the Missouri River intake and the
    first phase of the Culbertson to Medicine Lake Project.
                              proposed activities
        This project, which includes all of the Fort Peck Indian
    Reservation in Montana and the Dry Prairie portion of the project
    outside the Reservation, was authorized by Public Law 106-382, October
    27, 2000. The request for fiscal year 2004 will begin the construction
    of the Missouri River water treatment plant, which will require fiscal
    year 2005 funds for completion. The request will also complete the
    Culbertson to Medicine Lake Project, which was initiated in fiscal year
    2003. The Master Plan on page 2 of the testimony shows the relationship
    of the fiscal year 2004 request to the funds requested in fiscal year
    2003 and the needs in fiscal year 2005.

                                                       MASTER PLAN--ASSINIBOINE SIOUX AND DRY PRAIRIE RWS
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Appropriated                            Funding Needs
                                               Project Cost  --------------------------------------------------------------------------------   Fiscal Year
                     Segment                    (Oct. 2002)     Fiscal Year     Fiscal Year                                                     2007-Fiscal
                                                                2002 Funds      2003 Funds         2004            2005            2006          Year 2012
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Assiniboine and Sioux RWS:
        Intake..............................      $3,418,000  ..............      $3,418,000  ..............  ..............  ..............              $0
        Missouri River Water Treatment Plant      19,861,000  ..............         464,000      $8,000,000     $11,397,000  ..............               0
        Poplar to Big Muddy.................      25,583,000  ..............               0  ..............  ..............     $12,792,000      12,791,000
        Highway 13 to FP Boundary...........      10,430,000  ..............               0  ..............  ..............  ..............      10,430,000
        Poplar to Wolf Point................      16,794,000  ..............               0  ..............  ..............  ..............      16,794,000
        Wolf Point to Porcupine Ck..........      28,539,000  ..............               0  ..............  ..............  ..............      28,539,000
        FP OM Buildings.....................       1,050,000  ..............               0  ..............  ..............  ..............       1,050,000
        Fort Peck Electrical, Meters,              4,414,000  ..............               0         490,000         490,000         490,000       2,944,000
         Easements..........................
                                             ---------------------------------------------------------------------------------------------------------------
          Subtotal..........................     110,089,000              $0       3,882,000       8,490,000      11,887,000      13,282,000      72,548,000
                                             ---------------------------------------------------------------------------------------------------------------
        Planning, Design, Admin:
            Reclamation Oversight...........       4,634,000         295,000         154,000         465,000         465,000         465,000       2,790,000
            Environmental Mitigation........         579,000               0               0          64,000          64,000          64,000         387,000
            Administration..................       7,987,000         503,000         322,000         796,000         796,000         796,000       4,774,000
            Easement Acquisition............       3,104,000               0               0         345,000         345,000         345,000       2,069,000
            Design..........................       8,980,000       2,237,000         500,000         500,000         829,000         911,000       4,003,000
            Inspection......................       8,109,000               0         272,000         594,000         832,000         930,000       5,481,000
                                             ---------------------------------------------------------------------------------------------------------------
              Subtotal......................      33,393,000       3,035,000       1,248,000       2,764,000       3,331,000       3,511,000      19,504,000
                                             ---------------------------------------------------------------------------------------------------------------
              Total.........................     143,482,000       3,035,000       5,130,000      11,254,000      15,218,000      16,793,000      92,052,000
                                             ===============================================================================================================
    Dry Prairie RWS:
        Big Muddy to Plentywood:
            Culbertson to Medicine Lake.....       4,630,000  ..............       2,265,000       2,365,000  ..............  ..............               0
            Remaining.......................      17,289,000  ..............               0               0       2,000,000       5,096,000      10,193,000
        FP Boundary to Scobey...............       4,540,000  ..............               0               0  ..............  ..............       4,540,000
        Scobey to Plentywood................      11,097,000  ..............               0               0  ..............  ..............      11,097,000
        Scobey to Opheim....................       8,962,000  ..............               0               0  ..............  ..............       8,962,000
        Porcupine Creek to Glasgow..........       4,370,000  ..............               0               0  ..............  ..............       4,370,000
        Glasgow to Opheim...................       3,955,000  ..............               0               0  ..............  ..............       3,955,000
        DP OM Buildings.....................         525,000  ..............               0               0  ..............  ..............         525,000
        Dry Prairie P Electrical, Meters,          3,732,000  ..............               0         415,000         415,000         415,000       2,487,000
         Easements..........................
                                             ---------------------------------------------------------------------------------------------------------------
          Subtotal..........................      59,100,000               0       2,265,000       2,780,000       2,415,000       5,511,000      46,129,000
                                             ---------------------------------------------------------------------------------------------------------------
        Planning, Design, Admin:
            Reclamation Oversight...........       2,497,000          85,000          63,000         261,000         261,000         261,000       1,566,000
            Environmental Mitigation........         313,000           6,000          20,000          32,000          32,000          32,000         191,000
            Administration..................       4,675,000         121,000         132,000         491,000         491,000         491,000       2,949,000
            Easement Acquisition............         899,000          31,000          26,000          94,000          94,000          94,000         560,000
            Design..........................       4,838,000         342,000         100,000         350,000         427,000         427,000       3,192,000
            Inspection......................       4,369,000  ..............         170,000         245,000         219,000         386,000       3,349,000
                                             ---------------------------------------------------------------------------------------------------------------
              Subtotal......................      17,591,000         585,000         511,000       1,473,000       1,524,000       1,691,000      11,807,000
                                             ---------------------------------------------------------------------------------------------------------------
              Total.........................      76,691,000         585,000       2,776,000       4,253,000       3,939,000       7,202,000      57,936,000
                                             ===============================================================================================================
              Total.........................     220,173,000       3,620,000       7,906,000      15,507,000      19,157,000      23,995,000     149,988,000
                                             ===============================================================================================================
    Federal.................................     201,767,000       3,480,000       7,240,000      14,486,000      18,212,000      22,267,000     136,083,000
    Non-Federal.............................      18,406,000         140,000         666,000       1,021,000         945,000       1,728,000      13,905,000
                                             ---------------------------------------------------------------------------------------------------------------
          GRAND TOTAL.......................     220,173,000       3,620,000       7,906,000      15,507,000      19,157,000      23,995,000     149,988,000
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        The project also has the capability to build the first portion of
    the pipeline leaving the water treatment plant. The section will be
    east of the water treatment plant and will serve the community of
    Poplar, headquarters community for the Assiniboine and Sioux Tribes.
    Construction is scheduled to start in fiscal year 2006. This will also
    provide a source of water for a section of the Fort Peck Indian
    Reservation contaminated by oil drilling operations and the subject of
    EPA orders to the non-Tribal oil company responsible. The oil company
    will provide the distribution system necessary to mitigate the problems
    and the Assiniboine and Sioux Rural Water System will provide the
    interconnecting pipeline without duplicating any facilities identified
    in the Final Engineering Report. This is an exigent circumstance that
    will be corrected by the project in fiscal year 2006. No funds are
    requested for fiscal year 2004 for this project even though design will
    be complete.
        The Dry Prairie rural water system will finish the facilities
    necessary to bring water supplies from an existing treatment plant on
    the Missouri River at Culbertson to Medicine Lake where the existing
    water treatment is inoperable. The system to be completed in fiscal
    year 2004 will also provide the capability to connect to Dane Valley
    residents. The Dane Valley project will rely on fiscal year 2005 and
    fiscal year 2006 funds to mitigate costs of hauling water so prevalent
    there. The budget request is consistent with the Master Plan on the
    previous page as approved by the Bureau of Reclamation.
                            status of project design
        The Final Engineering Report (FER), water conservation plan and
    Finding of No Significant Impact were completed in fiscal year 2002.
    The FER was delivered to OMB in May 2002 and was released to the
    Department of Interior for review and delivery to Congress in March
    2003. The requirement to reside with Congress for 90 days will expire
    at the end of July 2003. Design is nearing completion or is completed
    for the Missouri River intake and the Culbertson to Medicine Lake
    Project. Those projects will commence construction in July/August 2003.
        Design of the water treatment plant will end in late fiscal year
    2003 or early fiscal year 2004. The design of the lagoons at the water
    treatment plant and the site landscaping will be completed in third-
    quarter fiscal year 2003, and construction of these preliminary
    facilities will begin in late fiscal year 2003.
        Design of the Poplar to Big Muddy pipeline is well advanced and can
    be completed to utilize first quarter fiscal year 2004 funds, but the
    appropriation requirements to undertake this pipeline construction in
    combination with the water treatment plant were considered too great to
    include in the funding request. Therefore, construction of this
    pipeline will depend on the availability of funds not currently
    identified in fiscal year 2004 or fiscal year 2005 or as programmed in
    fiscal year 2006 in the master plan presented above. The discussion of
    this pipeline is intended to demonstrate the capability of the project
    to use funds prior to fiscal year 2006 if funding were available.
        Similarly, the design of the branches that will serve rural
    residents between Culbertson and Medicine Lake can be concluded in time
    to utilize fiscal year 2004 or fiscal year 2005 funds, and the
    discussion is intended to demonstrate capability to use funding if it
    were available.
                             local project support
        The Fort Peck Tribes have supported the project since 1992 when
    they conceived it and sought means of improving the quality of life in
    the region. The planning was a logical step after successful completion
    of an historic water rights compact with the State of Montana. This
    compact was the national ``ice breaker'' that increased the level of
    confidence by other Tribes in Indian water right settlement
    initiatives. The Tribes did not seek financial compensation for the
    settlement of their water rights but contemplated water development for
    meaningful projects as now authorized.
        The 1999 Montana Legislature approved a funding mechanism from its
    Treasure State Endowment Program to finance the non-Federal share of
    project planning and construction. Demonstrating support of Montana for
    the project, there were only three votes against the statutory funding
    mechanism in both the full House and Senate. The 2001 and 2003 Montana
    Legislatures have provided all requirements of the non-Federal cost
    share.
        Dry Prairie support is demonstrated by a financial commitment of
    all 14 communities within the service area to participate in the
    project. Rural support is strong, with about 70 percent of area farms
    and ranches intending to participate as evidenced by their intent fees
    of $100 per household.
                       need for water quality improvement
        The Fort Peck Indian Reservation was designated as an ``Enterprise
    Community'' during the previous administration, underscoring the level
    of poverty and need for economic development in the region. The success
    of the economic development within the Reservation will be
    significantly enhanced by the availability of higher quality, safe and
    more ample municipal, rural and industrial water supplies that this
    regional project will bring to the Reservation, made more necessary by
    an extended drought in the region. Outside the Fort Peck Indian
    Reservation, the Dry Prairie area has income levels that are higher
    than within the Reservation but lower than the State average.
        The feature of this project that makes it more cost effective than
    similar projects is its proximity to the Missouri River. The southern
    boundary of the Fort Peck Indian Reservation is formed by the Missouri
    River for a distance of more than 60 miles. Many of the towns in this
    regional project are located 2 to 3 miles from the river, including
    Nashua, Frazer, Oswego, Wolf Point, Poplar, Brockton, Culbertson, and
    Bainville. As shown on the enclosed project map, a looping transmission
    system outside the Fort Peck Indian Reservation will deliver water 30
    to 40 miles north of the Missouri River. Therefore, the distances from
    the Missouri River to all points in the main transmission system are
    shorter than in other projects of this nature in the Northern Great
    Plains.
                  administration's budget for fiscal year 2004
        The administration's budget for fiscal year 2004 contained serious
    errors in analysis when it included the Fort Peck Reservation Rural
    Water System with other rural water projects that were characterized as
    follows:

        ``. . . many projects are currently developed by local sponsors
    without agency involvement and submitted to Congress for authorization.
    Agency involvement is necessary to ensure that all options to
    efficiently and effectively meet local needs are considered. The lack
    of agency involvement during project development may result in a
    project that is not in the local interest . . .''.

        The Tribes and Dry Prairie worked extremely well and closely with
    the Bureau of Reclamation prior to and following the authorization of
    this project in fiscal year 2000. The Bureau of Reclamation reviewed
    and commented on the Final Engineering Report for the project, and
    comments were either incorporated into the report or agreement was
    reached on final presentation. The Commissioner, Regional and Area
    Offices of the Bureau of Reclamation were consistently in full
    agreement with the need, scope, total costs, and the ability to pay
    analysis that supported the Federal and non-Federal cost shares. All of
    these items were thoroughly and formally reviewed in writing by the
    Bureau of Reclamation and there were no areas of disagreement or
    controversy in the final formulation of the project. Bureau of
    Reclamation testimony during the authorization phase fully supported
    the project within the Fort Peck Indian Reservation and opposed any
    Federal participation in the costs of the project outside the Fort Peck
    Indian Reservation, as a matter of policy, but Congress addressed that
    issue in Public Law 106-382.
        The Bureau of Reclamation collaborated with the Tribes and Dry
    Prairie to conduct and complete value engineering investigations of the
    Final Engineering Report (planning), the Culbertson to Medicine Lake
    pipeline (design), the Poplar to Big Muddy River pipeline (design), the
    Missouri River intake (design) and (during the week of March 31, 2003)
    on the regional water treatment plant (design). Each of these
    considerable efforts has been directed at ways to save construction and
    future operation, maintenance and replacement costs as planning and
    design have proceeded. Agreement with Reclamation has been reached in
    all value engineering sessions on steps to take to save Federal and
    non-Federal costs in the project.
        Cooperative agreements have been developed and executed from the
    beginning phases to date between the Bureau of Reclamation and the
    Tribes and between Bureau of Reclamation and Dry Prairie. Those
    cooperative agreements carefully set out goals, standards and
    responsibilities of the parties for planning, design and construction.
    All plans and specifications are subject to levels of review by the
    Bureau of Reclamation pursuant to the cooperative agreements. The
    sponsors do not have the power to undertake activities that are not
    subject to oversight and approval by the Bureau of Reclamation. Each
    year the Tribes and Dry Prairie are required by the cooperative
    agreements to develop a work plan setting out the planning, design and
    construction activities and the allocation of finding to be utilized on
    each project feature.
        Clearly, the Fort Peck Reservation Rural Water System does not fall
    into the category of concern expressed in the fiscal year 2004 budget
    by the Bureau of Reclamation. This project has been authorized by
    Congress with a plan formulated in full cooperation and collaboration
    with the Bureau of Reclamation, and major project features will be
    under construction in fiscal year 2003. The project sponsors are
    disappointed that the fiscal year 2004 budget did not include a
    significant level of funding for the Fort Peck Reservation Rural Water
    System in a year in which the overall budget for Reclamation increased
    by more than 6 percent. The sponsors are similarly disappointed that
    narrative in the report improperly characterized the planning, design
    and construction history of this project.
                                     ______

                   Letter From the Wyoming Water Association
                                            Cheyenne, WY, June 2, 2003.
    The Honorable Pete V. Domenici,
    Chairman,
    The Honorable Harry Reid,
    Ranking Minority Member,
    Energy and Water Development Subcommittee, Committee on Appropriations,
            United States Senate, 129 Dirksen Senate Office Building,
            Washington, DC 20510.
        Dear Chairman Domenici and Senator Reid: The Wyoming Water
    Association is writing to request your support for an appropriation in
    fiscal year 2004 of $6,915,000 to the Bureau of Reclamation within the
    budget line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado River Region. The President's
    recommended budget for fiscal year 2004 includes this line-item amount.
    The Association respectfully requests the designation of $5,479,000 for
    the Upper Colorado River Endangered Fish Recovery Program; $851,000 for
    the San Juan River Basin Recovery Implementation Program, $535,000 for
    Fish and Wildlife Management and Development and $50,000 for Water and
    Energy Management and Development.
        The objectives of the Wyoming Water Association are to promote the
    development, conservation, and utilization of the water resources of
    Wyoming for the benefit of Wyoming people. Since 1932, the Wyoming
    Water Association has served the interests of Wyoming's water users.
    With changing and growing demands on Wyoming's limited water resources,
    complicated by an increasingly complex overlay of Federal laws and
    regulations, management and development challenges and conflicts
    continue to become more numerous. The Association maintains an active
    role in supporting the State of Wyoming's efforts to put Wyoming water
    to use for Wyoming's citizens.
        These ongoing, highly successful, cooperative programs involving
    the States of Colorado, New Mexico, Utah and Wyoming, Indian tribes,
    Federal agencies and water, power and environmental interests have as
    their objective recovering endangered fish species while water
    development proceeds in compliance with the Endangered Species Act of
    1973. They reflect the proper approach to providing endangered species
    conservation and recovery within the framework of the existing Federal
    Endangered Species Act, while concurrently resolving critical conflicts
    between endangered species recovery and the development and use of
    Compact-apportioned water resources in the Upper Colorado River Basin
    region of the Intermountain West.
        The requested fiscal year 2004 appropriation will allow
    construction of fish passage at the Grand Valley Project and Price-
    Stubb diversion dams on the Colorado River near Grand Junction,
    Colorado, providing access to an additional 50 miles of historic
    habitat upstream of these dams. Floodplain restoration activities,
    including levee removal and obtaining conservation easements will
    continue at high-priority sites and is especially important for the
    survival of the razorback sucker species. Screening of existing
    diversion canals, including those of the Redlands Water and Power
    Company and Grand Valley Project, will be accomplished with the
    requested funding. Screens are needed to prevent endangered fish from
    being drawn out of the river and into the canals and power plant
    intakes at these facilities. The requested funding for the San Juan
    River Recovery Program will be used to design a fish passage at the
    Arizona Public Service weir and initiate floodplain restoration for
    razorback sucker in that Basin.
        Substantial non-Federal cost sharing funds are provided by the four
    States, power users, and water users in support of these recovery
    programs. Public Law 106-392, as amended by Public Law 107-375,
    authorized the Federal Government to provide up to $46 million of cost
    sharing for these two ongoing recovery programs' remaining capital
    construction projects. The four participating States are contributing
    $17 million and $17 million is being contributed from revenues derived
    from the sale of Colorado River Storage Project (CRSP) hydroelectric
    power. Additional hatchery facilities to produce endangered fish for
    stocking, restoring floodplain habitat and fish passage, regulating and
    supplying instream habitat flows, installing diversion canal screens to
    prevent fish entrapment and controlling nonnative fish populations are
    key components of the capital construction efforts. These facts
    demonstrate the strong commitment and effective partnerships that are
    present in both of these successful programs.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs.
    The Wyoming Water Association gratefully thanks you for that support
    and request the subcommittee's assistance relative to fiscal year 2004
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                Sincerely,
                                               John W. Shields,
                                                   Executive Secretary.
                                     ______

                Prepared Statement of the Crow Creek Sioux Tribe
                        fiscal year 2004 budget request
        The Crow Creek Sioux Tribe respectfully requests fiscal year 2004
    appropriations for the Bureau of Reclamation from the subcommittee on
    Energy and Water Development. Funds will be used to construct the
    urgently needed pipeline from Fort Thompson to Stephan. Planning
    studies for the project (Special Study, environmental assessment, and
    water conservation plan) back up the request. The project has been
    supported by the subcommittee since fiscal year 1995.
        The amount requested for fiscal year 2004 is $6,824,000 as set out
    below:

    ------------------------------------------------------------------------
     ------------------------------------------------------------------------
    Fort Thompson to Stephan Emergency Project..............      $5,536,000
    Reclamation Oversight...................................         208,000
    Environmental Mitigation................................          42,000
    Administration..........................................         637,000
    Design and Investigations...............................         401,000
    Inspection..............................................         277,000
                                                             ---------------
          Total.............................................       6,824,000
    ------------------------------------------------------------------------

                              proposed activities
        The request for funds in fiscal year 2004 is for construction of
    the urgently needed pipeline system between Fort Thompson and Stephan
    on the Crow Creek Indian Reservation. Fort Thompson is on the Missouri
    River near Big Bend Dam and has an intake and water treatment plant
    capable of serving the entire Crow Creek Indian Reservation with high-
    quality water. Stephan is a community 14 miles north of Fort Thompson
    and the home of a regional Indian high school within inadequate and
    extremely poor water quality. The pipeline system between Fort Thompson
    and Stephan will be constructed with sufficient capacity to serve rural
    households along the route and to extend the system in future years to
    the Big Bend community, all part of the implementation of a
    comprehensive system on the Reservation. This is not a new project but
    one that has been in development for more than 8 years with oversight
    by the Bureau of Reclamation and periodic line-item appropriations by
    Congress.
                               exigent conditions
        There is a need to construct facilities to distribute Missouri
    River water and improve water quality throughout the Crow Creek Indian
    Reservation. This action will reduce health risks to the membership of
    the Crow Creek Sioux Tribe and other residents of the Reservation. With
    the exception of the community of Fort Thompson, water supplies and
    water quality are deplorable throughout the Reservation.
        There is an immediate need to extend pipelines from Fort Thompson
    to the community and day school at Stephan where water quality is
    extremely poor, and existing wells are limited in capacity. Efforts
    last year to drill new wells to replace failing wells of very poor
    quality were not successful. The new wells also fail to produce an
    adequate water supply, and there was no improvement of the exceedingly
    for water quality. The school at Stephan provides for over 200
    students. Staff and teachers reside at the school. Reliance for
    drinking water has been placed on bottled water, and fire protection is
    inadequate given the current lack of supply.
        Inspired by efforts of the Crow Creek Sioux Tribe, including the
    planning for the Reservation municipal, rural and industrial water
    system, the water treatment facilities at Fort Thompson have been
    improved with microfilters that produce high quality water for
    residents of the community. The new water treatment facilities are
    incorporated as a part of the Reservation-wide project and, with
    construction of necessary pipelines, will permit delivery of high-
    quality water north to Stephan.
        The need for the Reservation-wide project is underscored by the
    population increases documented by the 2000 census. Our planning had
    projected population increases on the Reservation from 1990 to 2000 at
    a rate of 14.3 percent. The actual rate of growth experienced in the
    last decade was 26.7 percent, significantly greater than what was
    believed to be a liberal projection made from the 1990 census.
        The subcommittee is respectfully requested to carefully consider
    the Tribe's needs and provide the necessary funding to complete this
    emergency project.
         project construction costs and recommended project alternative
        Costs of reservation-wide alternatives, including construction
    contracts and non-contract costs, range from $15,403,000 (Alternatives
    b, d and e) to $17,853,000 (Alternative a) in October 1998 dollars.
        Based on the least cost scenario considering all life-cycle costs
    and the Tribe's desire for self-determination, the Tribe's preferred
    project alternative is Alternative a ($17,853,000): source of water on
    Lake Sharpe near Fort Thompson, constructed, operated, maintained and
    replaced by the Crow Creek Sioux Tribe. Environmental factors, such as
    cultural and historic resources, and identifiable impacts on physical
    and biological resources are not significantly different between
    alternatives.
        Five alternatives for developing the project were:
      --A project constructed, operated, maintained and replaced by the
            Crow Creek Sioux Tribe and meeting all needs through year 2030
            within the Crow Creek Indian Reservation. Source of water would
            be the Missouri River with modifications to the existing intake
            and water treatment plant at Fort Thompson.
      --A project constructed, operated, maintained and replaced by the
            Crow Creek Sioux Tribe and meeting all needs through year 2030
            within the Crow Creek Indian Reservation. Source water would be
            the Missouri River from the intake and water treatment plant
            constructed by Mid-Dakota on Lake Oahe. The reservation system
            would be connected to the Mid-Dakota system along the northern
            and eastern borders of the reservation. Mid-Dakota would sell
            water to the Tribe as a bulk user.
      --A project constructed, operated, maintained and replaced by the
            Crow Creek Sioux Tribe to service the Fort Thompson and Crow
            Creek community areas, and rural areas in between, from intake
            and water treatment plant at Fort Thompson. The balance of the
            project would be constructed, operated and maintained by Mid-
            Dakota with water supply from the Mid-Dakota intake and water
            treatment plant.
      --A project constructed, operated, maintained and replaced
            exclusively by Mid-Dakota to service the entire reservation
            with water supply from the Mid-Dakota intake and water
            treatment plant.
      --A project constructed by Mid-Dakota throughout the reservation and
            operated, maintained and replaced by the Crow Creek Sioux Tribe
            with water supply from the Mid-Dakota intake and water
            treatment plant.
           future operation, maintenance and replacement (omr) costs
        Future operation, maintenance and replacement costs, including
    staff, equipment, electricity, chemicals and all other materials
    necessary for repair and replacement, have an estimated range in cost
    from $597,195 (Alternative a) to $826,185 (Alternatives b, d and e).
                           present value of net costs
        Net costs were estimated as the present value of the costs of
    construction and OMR less the off-setting value of construction and OMR
    earnings by members of the Crow Creek Sioux Tribe, an under-employed
    labor force. Present value of net costs ranges from $15,348,180
    (Alternative a) to $22,673,000 (Alternatives d and e).
                             construction schedule
        A construction schedule beginning in fiscal year 2003 and ending in
    fiscal year 2006 is proposed. Construction and non-contract employment
    would provide 131 full-time equivalent man years of employment. Annual
    levels of funding needs would range from $2,135,000 in fiscal year 2003
    to $6,736,000 in fiscal year 2005.
                             environmental factors
        Pipelines proposed for the project range from 1.5 to 12 inches in
    diameter and have lengths ranging from 269.8 miles (Alternative c) to
    276.4 miles (Alternative a). From five to seven pump stations with
    horsepower ranging from 103.0 to 164.5 are representative of the
    alternatives. From six to eight reservoirs with up to 495,000 gallons
    of capacity are proposed. Future population growth will require
    approximately 5 acres of new wastewater lagoons by year 2030.
        Approximately 70 wetlands will be crossed by the project on the
    basis of the current layout, which will be modified in later designs to
    avoid wetlands. As many as 31 perennial stream crossings will be made.
    Nearly 43 miles of prime farmlands will be crossed by pipelines where
    most of the farmlands are defined as ``prime'' if irrigated in the
    future. Approximately 23 miles of unstable soils will be crossed. Up to
    134 miles of trust lands (slightly less than 50 percent of the total)
    will be crossed by pipelines.
        An Environmental Assessment and a class I cultural resource
    inventory and descriptive report have been prepared.
                                   population
        The population of the Crow Creek Indian Reservation in the 2000
    census was 2,225 persons: 2,074 Indian persons and 251 non-Indian
    persons. Based on the rate of growth in the Indian and non-Indian
    population over the past several decades, year 2030 population
    estimates were made resulting in a future population of 3,417. These
    estimates recognize a relatively high growth rate within the Indian
    population and out-migration by non-Indians.
                             income and employment
        Median household income in 2000 on the Crow Creek Indian
    Reservation averaged $12,070 (down from $12,763 in 1990) as contrasted
    with an average for the State of South Dakota of $35,282 (up from
    $22,503 in 1990). The Indian labor force on the reservation represented
    55.7 percent of the population over 16 years of age, and 21.6 percent
    were unemployed. Across the State of South Dakota, 68.4 percent of the
    population was in the labor force, and 3.0 percent were unemployed.
    Income levels on the reservation are extremely low, and unemployment is
    extremely high. The percentage of families below poverty level in the
    2000 census was 56.5 percent on the Reservation and 9.3 percent in
    South Dakota. (Note: the reporting is from the Special Study, which is
    being modified in detail, but not substance.)
                                     ______

               Prepared Statement of the Jicarilla Apache Nation
        The Jicarilla Apache Nation respectfully requests $5 to $8 million
    in the fiscal year 2004 appropriations cycle to begin construction on
    the water delivery and wastewater infrastructure improvement project
    authorized by Title VIII of Public Law 107-331, December 13, 2002 (The
    Jicarilla Apache Reservation Rural Water System Act). This law
    authorized a $45 million project to repair and replace the dilapidated
    federally owned water delivery and waste water system that serves the
    Jicarilla Apache Reservation in north-central New Mexico.
                            authorizing legislation
        The Jicarilla Apache Reservation Rural Water System Act was
    introduced by Representative Tom Udall (D-NM) along with the other New
    Mexico Congressional Representatives Joe Skeen and Heather Wilson, as
    original co-sponsors, and including 12 additional co-sponsors. Senators
    Pete Domenici (R-NM) and Jeff Bingaman (D-NM) supported and guided the
    legislation through the Senate. The purpose of the Act is to ensure a
    safe and adequate water supply for the citizens of the Jicarilla Apache
    Reservation, and authorizes the Department of the Interior, through the
    Bureau of Reclamation (BoR), and the Nation to plan, design and
    construct a safe and adequate water system utilizing Public Law 93-638
    contracting authority. The Act requires the Secretary of the Department
    of the Interior to enter a Public Law 93-628 contract with the Nation
    with the ultimate goal of the Nation assuming title and responsibility
    of operating and maintaining the system. The Act authorizes
    appropriations in the amount of $45,000,000 for the construction of the
    water system.
                                   background
        The existing water and wastewater facilities on the Jicarilla
    Apache Reservation are held in trust by the United States Department of
    the Interior and operated by the Bureau of Indian Affairs (BIA)
    Jicarilla Agency staff. The initial water supply system was erected in
    the early 1900's in the community of Dulce primarily to serve the BIA
    operations and facilities. The source of the community's water supply
    is the Navajo River located about a mile from Dulce.
        Over the years, random and ad hoc connections and expansions have
    been made to the system, and without adequate upkeep and substantial
    improvements, it has deteriorated and become over utilized. The public
    water system does not adequately and safely serve the existing and
    future growth needs of the Nation. Moreover, the system's deteriorated
    state created serious public health problems. Jicarilla members are
    experiencing high incidences of internal organ diseases affecting the
    liver, kidneys and stomach. The diseases are suspected to be related to
    the poor condition of the drinking water distribution system and
    inadequate treatment of wastewater. The resulting pollution released
    from non-compliant sewage ponds has creating public health hazards for
    families and communities within and well beyond the Nation's borders.
        The Nation has delayed important community improvement efforts,
    including the construction of much needed housing and the replacement
    of deteriorating public healthcare facilities and tribal administrative
    offices due to the lack of a modern waste water treatment facility.
        In the 1990's, the Nation began assessing the feasibility of
    assuming ownership and operation of the systems and commissioned
    studies to assess their condition. The findings indicated it would cost
    $25 million to bring the systems into compliance with Federal water
    quality standards. This investment did not, however, include community
    expansion needs.
        These dire conditions escalated in October of 1998, when the
    drinking water diversion system on the Navajo River failed leaving the
    community without water for 6 days. With no funding from BIA or other
    Federal programs, the Nation was compelled to expend $5 million on an
    emergency basis to replace the water treatment plant and associated
    facilities in 1999.
                              legislative approach
        The magnitude of the infrastructure issues couple with the BIA's
    inability to comprehensively address the scope of the problems
    associated with their systems left the Tribal leadership with no
    alternative but to take the lead to resolve these issues. The Nation
    approached the BoR and learned that legislation would be needed to
    authorize BoR to conduct a Feasibility Study to determine the most
    feasible method of developing a safe and adequate municipal, rural, and
    industrial water supply for the Jicarilla Apache Reservation. The
    Nation working with the New Mexico Congressional Delegation pursued
    such legislation, and on July 10, 2000, the President signed into law
    Public Law 106-243 which directed the Secretary of the Interior to work
    in cooperation with the Jicarilla Apache Nation in conducting the
    Feasibility Study. The statute also authorized $200,000 for the
    completion of the study.
        In September 2001, BoR, in cooperation with the Nation completed
    the feasibility study and report, entitled ``Municipal Water and
    Wastewater Systems Improvement, Jicarilla Apache Nation, Dulce, New
    Mexico, Planning Report/Environmental Assessment.'' The report
    recommended that none of the older existing pipelines be salvaged due
    to age and size and that an estimated $35 million was needed to
    adequately replace existing deteriorated facilities and to build a new
    conventional wastewater treatment plant to treat water to Federal
    discharge standards, eliminate the serious odor problem permeating the
    community, and enhance the community's water supply. The report
    recommended an additional $10 million to address environmental and
    public health needs and to meet long-term growth and economic
    development needs of the Jicarilla Apache Nation, for a total project
    cost of $45 million.
                      tribal contributions to the project
        After discovering the Federal programs and funding sources were
    limited to solve even the immediate capacity problems and public health
    concerns, the Nation was compelled to fund several projects beginning
    in 1998.

    ------------------------------------------------------------------------
                            Projects                          Tribal Funding
    ------------------------------------------------------------------------
    Studies and Engineering.................................        $450,000
    Water Treatment Plant...................................       2,730,000
    Water Storage and Distribution..........................       2,240,000
    Mundo Development Infrastructure (completed by 2003)....       2,250,000
    Wastewater Design and Initial Construction..............       6,000,000
                                                             ---------------
          Total Tribal Investment...........................      14,670,000
    ------------------------------------------------------------------------

        On a percentage basis, this investment would amount to nearly 25
    percent of total project costs, if what the Nation has already funded
    ($14.6 million) is added to the Federal portion being requested ($45
    million). The Nation recently committed an additional $6 million to
    begin construction on the new wastewater treatment plant because the
    current situation is so extreme and requires immediate action. The
    total project cost is broken listed below:

    ------------------------------------------------------------------------
     ------------------------------------------------------------------------
    Replace existing water system facilities................     $18,500,000
    Replace existing waste water system facilities..........      18,640,000
    Total to replace existing water/wastewater systems......      35,140,000
    Provide wastewater facilities to areas not served.......       2,800,000
    Total to replace existing water/wastewater facilities         35,140,000
     for all existing development...........................
    Water system facilities to the expansion area (known as        3,550,000
     ``Mundo Ranch'').......................................
    Wastewater system facilities to the Mundo ranch.........       3,550,000
    Total for water/wastewater facilities for Mundo ranch...       7,100,000
                                                             ---------------
          TOTAL PROJECT COST................................      45,040,000
    ------------------------------------------------------------------------

        Moreover, the Nation is making the commitment to assume title to
    the facilities and to operate these facilities in perpetuity once
    constructed to Federal standards. This is a significant Federal benefit
    as it alleviates the Federal liability in the operation of a
    substandard system and shifts the costs of operations, maintenance and
    replacement of these facilities to the Nation. It is estimated by the
    O,M&R portion of the report, that it will cost approximately $750,000
    per year to adequately operate and maintain these facilities. The
    Federal investment would be protected under tribal management as BIA
    funding for this purpose has been significantly cut over the years
    resulting in the current conditions that exist today. The present value
    of this cost over a 50-year project life at a 6 percent financing rate
    is $12 million.
                                 current status
        In addition to the funding for the Feasibility Report, Senator
    Domenici was instrumental in securing $2.5 million for final design
    work and to prepare for the initiation of construction. Accordingly,
    the Nation has entered into a Self-Determination Act (Public Law 93-
    638) Construction Assistance Agreement on September 2002 with the
    Bureau of Reclamation. As of April 15, 2003, the Nation has met all
    conditions and requirements of this Agreement and has prepared final
    plans and specifications to construct approximately $2.3 million in
    water and wastewater infrastructure critical to its needs.
    Advertisement for bids is scheduled for April 30th and construction is
    scheduled to begin June 15. Completion of this phase will coincide with
    completion of a wastewater treatment facility currently under
    construction with tribal funds scheduled for operations in January
    2004.
                   use of appropriations in fiscal year 2004
        The Nation is prepared to begin final design work for the next
    phase of construction upon notification of funding availability. A
    design-build approach will be utilized to expedite construction and the
    Nation has management capacity for up to $10 million for fiscal year
    2004. Features that would be constructed are the raw water pumping
    station and related pipeline, water distribution and wastewater
    collection facilities in the southwest portion of the community and
    similar features at the Mundo Ranch development. These components were
    thoroughly studied and assessed in the Feasibility Report and would be
    constructed accordingly.
                                   conclusion
        By authorizing this project, Congress provided a mechanism for the
    United States to meet its trust responsibility to the Nation by
    providing adequate water and wastewater infrastructure to protect and
    advance the health, safety and welfare of the Jicarilla people. The
    Nation, in cooperation with Reclamation and with the assistance of
    Congress, has demonstrated the poor condition that these facilities are
    in and have exposed the risk facing the Bureau of Indian Affairs as it
    continues to operate these facilities in their current condition. The
    Nation has demonstrated our resolve in improving conditions for our
    people by investing nearly $15 million in infrastructure of our own
    financial resources even though we believe strongly that the United
    States has failed in providing these services as part of its trust
    responsibility to the Nation.
        In sum, the Jicarilla Apache Nation is suffering premature deaths,
    community members are subject to continuing health hazards, and
    community development is blocked by the Department of the Interior's
    failure to maintain and modernize the public water system that it
    established and undertook to operate on the Reservation. Interior has
    asked the Jicarilla Apache Nation to take over the operation of the
    public water system, and as a Tribal Government we are willing to take
    over the operation of a safe and sound public water system. But before
    we will take over the operation, Interior must fix the health hazard
    that it has created. Therefore, we respectfully request the Committee
    to appropriate $5 to $8 million in fiscal year 2004 to begin
    construction of this project.
                                     ______

                  Prepared Statement of the Mid-Dakota Project
        First let me thank the Subcommittee for the opportunity to testify
    in support of the fiscal year 2004 appropriations for the Mid-Dakota
    Rural Water Project and for the Subcommittee's support both past and
    present.
        The Mid-Dakota Project is requesting $23.869 million in Federal
    appropriations for fiscal year 2004. As with our past submissions to
    this subcommittee, Mid-Dakota's fiscal year 2004 request is based on a
    detailed analysis of our ability to proceed with construction during
    the fiscal year. In all previous years, Mid-Dakota has fully obligated
    its appropriated funds, including Federal, State, and local, and could
    have obligated significantly more were they available.
              tentative fiscal year 2004 construction schedule \1\
    ---------------------------------------------------------------------------
        \1\ Project features listed in table are subject to rescheduling
    based upon funding provided and readiness to proceed and other factors.
    Actual construction activities, therefore, may not coincide exactly
    with schedule presented here.
    ---------------------------------------------------------------------------
        The proposed construction would provide service to an estimated
    14,000 more people than are currently receiving or scheduled to receive
    Project drinking water (estimate includes the City of Huron, SD). Our
    construction schedule will also provide the necessary pipeline
    infrastructure to move forward with many more rural and community
    connections in the future.

     MID-DAKOTA RURAL WATER SYSTEM STATEMENT OF CAPABILITIES--FISCAL YEAR 2004 (OCTOBER 2003 THROUGH SEPTEMBER 2004)
    ----------------------------------------------------------------------------------------------------------------
                                                                        Inspection
                                                       Construction     Percent of      Engineering      Subtotals
                                                                       Construction      and Legal
    ----------------------------------------------------------------------------------------------------------------
    100--Source and Intake (percent)................  ..............              12              10  ..............
    200--Water Treatment (percent)..................  ..............               0               0  ..............
        Huron--Constructed MD Facilities............        $150,000  ..............  ..............        $150,000
        Huron--Improvements & Assistance............        $100,000  ..............  ..............        $100,000
                                                     ---------------------------------------------------------------
          Subtotals.................................  ..............  ..............  ..............        $250,000
                                                     ===============================================================
    300--Main Transmission Pipeline (percent).......  ..............               8               8  ..............
        Pumping Stations............................      $1,384,547        $110,764        $110,764      $1,606,075
        3-3D Cathodic Protection System.............        $142,800         $11,424         $11,424        $165,648
        Increase Collins Slough BPS.................        $884,660          $6,773          $6,773         $98,206
                                                     ---------------------------------------------------------------
          Subtotals.................................      $1,612,007        $128,961        $128,961      $1,869,928
                                                     ===============================================================
    400--Distribution Pipeline (percent)............  ..............               6               6  ..............
        Highmore East...............................      $1,232,480         $73,949         $73,949      $1,380,378
        Wolsey......................................      $7,737,224        $464,233        $464,233      $8,665,691
        Staum Dam...................................      $1,833,409        $110,005        $110,005      $2,053,418
        Redfield East...............................        $376,839         $22,610         $22,610        $422,060
        Improve West Canning Service Area...........        $207,050         $12,423         $12,423        $231,896
                                                     ---------------------------------------------------------------
          Subtotals.................................     $11,387,002        $683,220        $683,220     $12,753,442
                                                     ===============================================================
    500--Water Storage (percent)....................  ..............              12               6  ..............
        Wolsey......................................      $2,050,000        $246,000        $123,000      $2,419,000
        Staum Dam...................................        $510,000         $61,200         $30,600        $601,800
        Pearl Creek.................................        $510,000         $61,200         $30,600        $601,800
        Redfield....................................        $430,000         $51,600         $25,800        $507,400
        Huron-Water Storage Tank Cost Share.........        $600,000  ..............  ..............        $600,000
                                                     ---------------------------------------------------------------
          Subtotals.................................      $4,100,000        $420,000        $210,000      $4,730,000
                                                     ===============================================================
    SCADA and Controls (percent)....................  ..............              12  ..............  ..............
        Controls and SCADA System...................        $509,925         $40,794         $40,794        $591,513
                                                     ---------------------------------------------------------------
          Subtotals.................................        $509,925         $40,794         $40,794        $591,513
                                                     ===============================================================
                                                         $17,858,934      $1,272,975      $1,062,975     $20,194,883
                                                     ===============================================================
    Administration and General as a percent of        ..............  ..............  ..............        $535,768
     Construction--3.0 percent......................
    Bur. of Rec. oversight as a percent of            ..............  ..............  ..............        $535,768
     Construction--3.0 percent......................
    Contingencies as a Percent of Construction......  ..............  ..............  ..............      $1,785,893
                                                                                                     ---------------
          TOTAL RURAL WATER SYSTEM CAPABILITIES--     ..............  ..............  ..............     $23,052,313
           FISCAL YEAR 2004.........................
    WETLAND ENHANCEMENT COMPONENT REQUEST--FISCAL     ..............  ..............  ..............        $817,117
     YEAR 2004......................................
                                                                                                     ---------------
          TOTAL RURAL WATER AND WETLAND CAPABILITY--  ..............  ..............  ..............     $23,869,430
           FISCAL YEAR 2004.........................
    ----------------------------------------------------------------------------------------------------------------

                       impacts of fiscal year 2004 award
        The most obvious impact of any significant reduction from Mid-
    Dakota's request will be the delay of construction of one or more
    Project components. The $23.869 million request will allow the Project
    to proceed with construction of multiple contracts summarized later in
    this testimony. An award of less than our request will result in the
    deletion or reconfiguration of one or more of these contracts from the
    fiscal year 2004 construction schedule. Further, reduced appropriations
    have the effect of adding more cost to the amount needed for completion
    of the Project.
                           history of project funding
        The Project was authorized by Congress and signed into law by
    President George H.W. Bush in October 1992. The Federal authorization
    for the project totaled $100 million (1989 dollars) in a combination of
    Federal grant and loan funds (grant funds may not exceed 85 percent of
    Federal contribution). The State authorization was for $8.4 million
    (1989 dollars). A breakdown of Project cost ceilings are as follows:

                    PROJECT COST CEILINGS (FISCAL YEAR 2004)
    ------------------------------------------------------------------------
     ------------------------------------------------------------------------
    Federal Ceiling.........................................    $140,279,000
    State Ceiling...........................................       9,670,000
                                                             ---------------
          Subtotal Rural Water System.......................     149,949,000
    Wetland Enhancement Component...........................       2,756,000
                                                             ---------------
          Total Project Cost Ceiling........................     152,705,000
    ------------------------------------------------------------------------

        The total authorized indexed cost of the project is approximately
    $152.705 million (fiscal year 2004). All Federal funding considered,
    the Government has provided 80 percent of its commitment ($114.135 \2\
    million of $143.035 million) to provide construction funding for the
    Project. When considering the Federal and State combined awards, the
    project is approximately 81 percent complete, in terms of financial
    commitments.
    ---------------------------------------------------------------------------
        \2\ Includes $17.860 million appropriated in fiscal year 2003, but
    does not include Agency ``underfinancing''.

                                                                SUMMARIZATION OF FEDERAL FUNDING
                                                                    [In Millions of Dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                     Total
                                                                        Mid-      Pres.                            Conf.      Bureau   Additional     Fed.
                            Fed. Fiscal Year                           Dakota     Budget     House      Senate    Enacted     Award       Funds      Funds
                                                                      Request                                      Levels     Levels                Provided
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1994...........................................................      7.991  .........  .........      2.000      2.000      1.500  ..........      1.500
    1995...........................................................     22.367  .........  .........      8.000      4.000      3.600  ..........      3.600
    1996...........................................................     23.394      2.500     12.500     10.500     11.500     10.902       2.323     13.225
    1997...........................................................     29.686      2.500     11.500     12.500     10.000      9.400       1.500     10.900
    1998...........................................................     29.836     10.000     12.000     13.000     13.000     12.221       1.000     13.221
    1999...........................................................     32.150     10.000     10.000     20.000     15.000     14.100       2.000     16.100
    2000...........................................................     28.800      5.000     15.000      7.000     14.000     12.859       1.000     13.859
    2001...........................................................     24.000      6.040     11.040      6.040     10.040      9.398  ..........      9.398
    2002...........................................................     30.684     10.040     15.040     15.540     15.040     13.611       0.861     14.472
    2003...........................................................     29.360     10.040     17.040     17.900     17.900  .........  ..........  .........
    2004...........................................................     23.869      2.040  .........  .........  .........  .........  ..........  .........
                                                                    ----------------------------------------------------------------------------------------
          Totals \3\...............................................  .........     58.160    104.120    112.480    112.480     87.591       8.684     96.275
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \3\ Includes Congressional appropriations for the operation and maintenance of the ``Wetland Enhancement'' Component of the Project.

        Additionally, the State of South Dakota has contributed $9.67
    million in grants to the Mid-Dakota Project, in previous years. The
    State of South Dakota completed its initial authorized financial
    obligation to the Mid-Dakota Project in the 1998 Legislative Session.
                            construction in progress
        Mid-Dakota began construction in September of 1994, with the
    construction of its Water Intake and Pump Station. Since that eventful
    day of first construction start, we have bid, awarded, and completed 23
    project components and are into construction on eight other major
    Project components. The following table provides a synopsis of each
    major construction contract:

                                              SUMMARIZATION OF CONSTRUCTION
                                                [In Millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                             Percent
                                                                    Cont.      Cont.     Final      Over      Over
              Cont. No.                    Description           Budget \4\     Bid      Cont.    (Under)    (Under)
                                                                               Award     Price     Budget    Budget
    ----------------------------------------------------------------------------------------------------------------
    1-1.........................  Oahe Water Intake and Pump         4.662      3.959     3.945    (0.717)      (15)
                                   Station.
    2-1.........................  Oahe Water Treatment Plant...     13.361      9.920    10.278    (3.083)      (23)
    3-1A........................  Raw Water Pipeline...........      1.352      1.738     1.719     0.367        27
    3-1B........................  Main Pipeline--Blunt.........      7.823      6.916     7.024    (0.799)      (10)
    3-1C........................  Main Pipeline--Highmore......      5.439      4.791     4.798    (0.641)      (12)
    3-1D........................  Main Pipeline--CP 1st Phase..      0.220      0.215     0.215     0.010      (0.5)
    3-2A........................  Main Pipeline--Ree Hights....      3.261      3.155     3.149    (0.112)       (3)
    3-2B........................  Main Pipeline--St. Lawrence,       3.691      3.349     3.352    (0.339)       (9)
                                   SD.
    3-3A........................  Main Pipeline--Wessington, SD      2.700      2.406     2.383    (0.317)      (12)
    3-3B........................  Main Pipeline--Wolsey, SD....      4.291      3.928   ( \6\ )    ( \7\ )   ( \7\ )
    3-3C........................  Main Pipeline--Huron, SD.....      2.938      2.629   ( \6\ )    ( \7\ )   ( \7\ )
    4-1A/B (1-5)................  Distribution System--West....      9.345      9.983    10.731  \5\ 1.386       15
    4-1A/B (6)..................  Distribution System--North         8.333      8.329     9.028  \5\ 0.695        8
                                   West.
    4-2 (1).....................  Distribution System--Central.      4.727      4.717     4.700    (0.027)     (0.5)
    4-2 (2).....................  Distribution System--South         2.763      2.835     3.000  \5\ 0.237        9
                                   Central.
    4-2 (4-5)...................  Distribution System--Central.      5.753      4.952     5.135    (0.620)      (11)
    4-2A (4)....................  Distribution System--Central.      1.042        991     1.186  \5\ 0.140       13
    4-2AP (2-3).................  Distribution System--Central.     10.340      9.824   ( \6\ )    ( \7\ )   ( \7\ )
    4-2 AV (2-3)................  Distribution System Vaults--         668        557   ( \6\ )    ( \7\ )   ( \7\ )
                                   Central.
    5-1.........................  Water Storage Tank--Highmore.      1.545      1.434     1.433    (0.108)       (7)
    5-1A (1)....................  Water Storage Tank--Onida....      0.471      0.395     0.400    (0.075)      (16)
    5-1A (2)....................  Water Storage Tank--Okobojo..      0.381      0.338     0.333    (0.048)      (13)
    5-1A (3)....................  Water Storage Tank--Agar.....      0.422      0.391     0.385    (0.037)       (9)
    5-1A (4)....................  Water Storage Tank--               0.952      0.814     0.808    (0.144)      (15)
                                   Gettysburg.
    5-2 (1).....................  Water Storage Tank--Mac's            460        573       561     0.101        22
                                   Corner.
    5-2 (2).....................  Water Storage Tank--Rezac            438        493       499     0.060        14
                                   Lake.
    5-2 (3).....................  Water Storage Tank--Collin's         254        393       410     0.160        63
                                   Slough.
    5-2A (1)....................  Water Storage Tank--Ames.....        300        378   ( \6\ )    ( \7\ )   ( \7\ )
    5-2A (2)....................  Water Storage Tank--                 800        696   ( \6\ )    ( \7\ )   ( \7\ )
                                   Cottonwood Lake.
    5-2A (3)....................  Water Storage Tank--                 515        491   ( \6\ )    ( \7\ )   ( \7\ )
                                   Wessington Springs.
    6-1.........................  SCADA & Controls.............    ( \7\ )    ( \7\ )   ( \6\ )    ( \7\ )   ( \7\ )
                                                                ----------------------------------------------------
                                        Totals.................     99.247      91.59    75.472    (3.911)       (4)
    ----------------------------------------------------------------------------------------------------------------
    \4\ Contract budget is determined by Mid-Dakota's estimate for the contract at the time of bidding.
    \5\ A significant portion of cost increases are attributable to the placement of additional users as
      construction proceeds.
    \6\ In progress.
    \7\ Not applicable.

        As is evident by the foregoing table, Mid-Dakota has been very
    successful in containing Project costs. Currently the construction of
    major Project components are approximately 4 percent under budget,
    providing an estimated saving of over $3.91 million. The savings are an
    example of sound engineering, good management and advantageous bid
    lettings. While we can't guarantee future contract bid lettings will
    continue to provide the level of savings currently experienced, we do
    think it speaks well of the Mid-Dakota Project and how we've managed
    Project funding to date.
        Additionally, Mid-Dakota is keeping in close contact with the City
    of Huron, SD (population 11,893) regarding potentially serious EPA
    water quality violations anticipated with the implementation of the
    Safe Drinking Water Act (SDWA) enhanced surface water rules. Engineers
    who have analyzed the current drinking water source for Huron (James
    River) have concluded that the City will not be able to treat the
    current James River source without very significant and costly upgrades
    to their existing treatment facilities. Further the engineers have
    concluded that without these upgrades or switching to a new source
    i.e., Mid-Dakota, the City will be out of compliance with the
    Disinfection and Disinfection by-products rule D/DBP to be implemented
    in 2003. Huron is located at the East end of the Mid-Dakota Project
    (Mid-Dakota is being built in a general West to East manner) and is
    currently Mid-Dakota's largest contracted user. It is anticipated that
    Mid-Dakota will be in a position to connect to Huron in time to remedy
    the potential EPA non-compliance issue faced by Huron.
                                    closing
        Mid-Dakota is very aware of the tough funding decisions that face
    the Energy and Water Appropriations Subcommittee and we do not envy the
    difficult job that lies ahead. We strongly urge, the Subcommittee to
    look closely at the Mid-Dakota Project and recognize the dire need that
    exists. Consider the exceptionally high level of local and State
    support. And lastly our readiness, our credibility and our ability, to
    proceed.
        Again, we thank the Subcommittee for its strong support, both past
    and present.
                                     ______

       Prepared Statement of the Perkins County Rural Water System, Inc.
                                project history
        History of this project goes back to 1977 when a group of farmers
    in Perkins County were contacted by Southwest Pipeline Project in North
    Dakota if they would be interested in obtaining water to serve Perkins
    County. At that time, approximately 100 farms and ranches and the Towns
    of Lemmon and Bison were interested, so Perkins County was included in
    their feasibility study.
        In November of 1992, Southwest Water Pipeline Project had grown to
    the point that Perkins County was contacted about receiving water from
    the project and to be included in the engineering design work. A
    committee of interested landowners and representatives from the two
    incorporated towns were organized through the Perkins County
    Conservation District. From this committee, nine directors volunteered
    to serve on a board to study the feasibility of rural water for the
    county. In March of 1993, Perkins County Rural Water System, Inc. was
    organized as a non-profit corporation. Two grants were obtained from
    the South Dakota Department of Environment and Natural Resources for
    $50,000 each to do a feasibility study. At the same time, the Directors
    were able to acquire good intention fees from rural landowners, State
    land, Federal land, and the two towns totaling $28,500 to cost share
    the State money on a 80-20 share basis.
        A feasibility study was conducted for Perkins County Rural Water by
    KBM, Inc. of Grand Forks, North Dakota and the Alliance of Rapid City,
    South Dakota in 1994. In the 1995-1996 South Dakota legislature, we
    obtained State authorization and appropriations of $1 million. This
    money was used to up-size the pipe in North Dakota for our capacity and
    for administration cost of Perkins County Rural Water. We have signed a
    contract with the North Dakota State Water Commission to deliver 400
    gpm to the border. We have signed contracts with both towns to be the
    sole supplier for their water systems. We have had a very good response
    from the rural farmers and ranchers in that 50 to 60 percent have
    signed and paid for water contracts delivered to their farmstead. We
    have also signed a contract with the Grand River Grazing Association
    that grazes cattle on U.S. Forest Service land.
        In the fall of 1999, we received Federal authorization with the
    106th Congress for a 75 percent grant of $20 million. Due to the fact
    it is indexed back to 1995, that amount has grown to $28 million. In
    2002, we received our first appropriation of $3.2 million.
    Appropriations for 2003 were passed out of committee in February in the
    amount of $4.3 million. With the appropriations for 2002 and 2003, we
    will be able to hookup approximately 45 rural users, install a seven
    pump station and hookup at the border to start delivering water to our
    customers. Our request for 2004 is $5.0 million. With this money, we
    will be able to deliver water to both towns and put them on line the
    fall of 2004. These hookups are very essential to our corporation since
    they will be our two largest customers and will provide quality water
    for the first time for either municipality.
                        project location and description
        Perkins County Rural Water System, Inc. (PCRWS) would provide
    potable water to approximately 300 farms and ranches and two towns,
    Lemmon and Bison, in Perkins County, South Dakota. The system will
    serve rural users and provide bulk water to Lemmon and Bison. Currently
    the only two existing water systems in the project area are the
    municipal supply systems for the towns of Lemmon and Bison.
        When constructed, PCRWS would be the first rural water system in
    Perkins County.
        The purpose of PCRWS is to create a water distribution network to
    deliver treated water to rural subscribers, who currently rely upon
    well water of variable quality and quantity. Both Bison's and Lemmon's
    water currently has high concentrations of sodium and sulfates of which
    recommended limits are consistently exceeded. The implementation of
    this project would ensure a reliable supply of water to rural residents
    that meet the water quality standards of the Safe Drinking Water Act.
        The proposed primary water source will be buying bulk water from
    Southwest Water Authority of southwestern North Dakota. They obtain
    their water from an intake on the Missouri River and move it to a
    treatment plant at Dickinson, North Dakota. It is then piped to the
    border for PCRWS. The proposed system will include approximately 550
    miles of distribution pipe, 4-5 booster pumps, and 2-4 supply tanks.
                                    sponsors
        The Perkins County Rural Water System, Inc., a non-profit
    corporation consisting of nine directors from three districts, sponsors
    the project. The money for the project is available at a 75 percent
    Federal grant, 10 percent State grant, and 15 percent local match. The
    75 percent Federal grant will be from the Bureau of Reclamation, the
    lead Federal agency for the project. The State funds will be
    administrated through the South Dakota Department of Environment and
    Natural Resources. The consumers of PCRWS, plus a loan from the State
    of South Dakota or U.S. Department of Agriculture, Rural Development,
    will provide the 15 percent local money. KBM, Inc. of Grand Forks,
    North Dakota, and The Alliance of Rapid City, South Dakota is under
    contract to perform the engineering services for the project.
                           water source alternatives
        The proposed water source is a bulk supply of water treated and
    delivered by Southwest Water Authority. Line capacity for delivery has
    been or will be paid by PCRWS to deliver 400 gallons per minute to the
    border of South Dakota.
        Other alternatives that were considered are water from deep-water
    wells and water from Shadehill Reservoir, a Bureau of Reclamation
    project. Since both of these sources were very high in sodium and total
    dissolved solids (TDS), treatment would be accomplished by reverse
    osmosis. Raw water would have been blended with treated water to obtain
    the quantity needed. A third alternative would have been a combination
    of Southwest water and a treatment plant. All alternatives were
    rejected because of the added expense to operation and maintenance of
    the system.
                           water treatment facilities
        Water will be treated at the Dickinson water treatment plant in
    Dickinson, ND. The water treatment plant has expanded from 6 million
    gallons per day to 12 million gallons per day and has also turned
    management over to Southwest Water Authority within the last 2 years.
    The current plant uses a conventional lime softening process to treat
    the water. Chloramines are added at the Dodge pumping station and the
    rest of the treatment takes place in the Dickinson treatment plant.
                            benefits of the project
        PCRWS will provide a clean, safe domestic water supply to users in
    Perkins County. Currently, rural residents obtain water from shallow
    water wells whereas the towns obtain their water from deep-water wells
    in the Fox Hills aquifer. Water quality in the shallow wells is high in
    sodium and TDS. Water from the deep-water wells is high in sodium,
    fluoride, and sulfates. These chemicals are either at or above
    recommended levels set by the EPA. By buying treated water from an
    existing water system, the towns can save money and still comply with
    the rules and regulations set by the Safe Drinking Water Act and the
    State of South Dakota.
                     permits and environmental requirements
        Final report of Class I Cultural Resources Research and Survey
    Design Plan has been completed. Presently the draft of the
    Environmental Assessment has been completed and a Finding of No
    Significant Impact (FONSI) was issued and signed on February 3, 2003.
    The Final Engineering Report along with the Environmental Assessment
    are currently in Office of Management and Budget and will be
    distributed to Congress in a few weeks. Utility permits to occupy State
    and county rights of way have been acquired and right of entry from
    private landowners for the first two phases are also being obtained.
    Special use permits will be required for any part of the line that
    crosses U.S. Department of Agriculture, U.S. Forest Service land and
    will be issued shortly.
                         proposed construction schedule
        Construction of the PCRWS will be delayed till the summer of 2003
    after reports and assessments have been approved by the Bureau of
    Reclamation. Work on the Lodgepole project is on going and construction
    hopefully will be started and finished this year. Construction in the
    City of Lemmon and the Town of Bison is also planned for this summer.
    Construction of the entire project is dependent on federal funding
    levels per year, but the project could be completed in 5-6 years.
        Maps showing the construction phases and the total project plus
    project costs follow. Table 1 shows the total project construction
    costs, table 2 shows final O&M costs for the total system.
                         work plan for fiscal year 2004
        Perkins County Rural Water System, Inc. (PCRWS) budget is broke
    down into three parts which includes Administration, Construction, and
    Non-Project. Administration includes the day to day operation of the
    System, Construction is broke down into several items of construction
    for 2003, and Non-Project is the money spent on Federal lobbying.
        Administration budget includes:
      --Income including BOR grant funds, water sales, interest.
      --Expenses include: Office administration; Utilities for both office
            and pumps (O&M budget will be drafted later); Payroll including
            all of the Office Managers wages, and 48.5 percent of General
            Managers wages; Water purchases for the last 3 months of 2003
            for people hooked up by fall; Office equipment for office use.
        Construction budget includes:
      --Income totally from BOR (based on $1.9 million carryover and $4.3
            million appropriations).
      --Expenses including: Advertising for bids, easements, construction
            schedules; Legal fees for contracts, bid openings; Engineering
            for plans and specs, bids, contracts, inspections; Construction
            fees include:
        --a. Lemmon infrastructure @ $720,000.00,
        --b. Bison infrastructure @ $50,000.00,
        --c. Combination of Phase I and II includes (page 79 in the FER):
          --1. Rural pipeline (Lodgepole) consisting of all sizes,
                approximately 70 miles;
          --2. Border vault;
          --3. Pumping Station #1;
          --4. Three phase transmission line;
          --5. Partial mainline to Bison;
        --d. North Dakota State Water Commission Payment.
      --Wages for construction will include all of O&M Manager's and 48.5
            percent of General Manager's.
        Non-Project budget includes:
      --Income from hook-up fees and building rental fees.
      --Expenses include directors and managers costs for work and travel
            to Washington, DC.
        Also included is a worksheet containing the breakdown of items
    included in the three budgets.
        The work plan for Perkins County Rural Water is as follows:
    Administration
        Income will include water sales for the fourth quarter, October
    thru December ($16,600), interest income ($40,000), hookup fees
    ($7,400) and $7,500 from Bureau of Reclamation. Advertising, Legal
    fees, Insurance, Accounting Fees, Mileage Reimbursement, Meals, Dues
    and Fees, Office supplies, Repairs, and Telephone is based on past
    budgets and will total to $25,250.00. Utilities, for the pumps, are
    based on electricity needed to pump water for 3 months for a price of
    $3,000.00. Depreciation is figured on equipment inventory, building,
    and vehicle for a total of $4,000.00 (not included is depreciation of
    pipeline, etc.). Payroll for this budget includes all of the Office
    Manager's wages and benefits ($22,712.82), and 48.5 percent of General
    Managers ($42,391.2048.5 percent = $20,559.73). Water purchases are
    based on water sold for last quarter of 2003 for rural hookups plus
    Bison. Office equipment consists of copier ($5,000.00), computer for
    telemetry and O&M management ($3,000.00), software including Arc View,
    Telemetry, misc. ($4,000.00) for a total of $12,000.00. Building
    includes heat, electric, taxes and insurance ($3,000.00, vehicle
    includes tax and license, maintenance ($2,750.00) and a contingency of
    ($8,820.00).
    Construction
        Construction income will come totally from the BOR at $5,732,500.
        All office items including advertising, legal fees, office
    supplies, and telephone is a percentage of the total that we believe
    will be used strictly for construction, amounts to $13,000. Engineering
    is based on an estimate from KBM, Inc of $180,000 for 2003. The use tax
    is the 4 percent State tax applied to the engineering fees and will be
    $7,200 based on $180,000. Wages are calculated using 100 percent of the
    O&M Manager and 48.5 percent of the General Manager's salary.
    Contingency is 4 percent of the total.
        Construction is broke down in the following table:

    ------------------------------------------------------------------------
     ------------------------------------------------------------------------
    Payment to NDSWC........................................        $946,000
    Lemmon Infrastructure...................................         720,000
    Bison Infrastructure....................................          50,000
    Border Vault............................................         100,000
    Three Phase Transmission Line...........................         225,000
    Pumping Station #1......................................         500,000
    Lodgepole Distribution..................................       1,800,000
    Partial Main Transmission Line to Bison.................         907,700
                                                             ---------------
          TOTAL.............................................       5,248,700
    ------------------------------------------------------------------------

    Non-Project
        Non-project is money that is used for lobbying for funds from the
    Federal Government. Income for this budget will not come from the BOR.
    Income will include $12,000 from hookup fees and $2,400 from rental
    fees in the System's building.
        Office budget will be mileage reimbursement ($500), office
    supplies, ($500), and telephone ($100). Meeting expenses for both the
    directors and manager is money spent on time in Washington, DC
    ($11,000). This includes the possibility of three trips to Washington
    for up to three directors plus the manager. Three percent of the
    manager's wages have been allocated for this item equaling $1,300.
    Contingency is set at $1,100 (7 percent).
    Conclusion
        It is anticipated that the work proposed in this document will
    require 12 months to complete. This time frame could lengthen
    considerably, dependent upon future appropriations from the U.S.
    Federal Government to the project.
        A full budget is included at the end of the report broke down in
    the three categories. Also included are the phase projections through
    2007.
                                     ______

       Letter From the Metropolitan Water District of Southern California
                               Los Angeles, California, March 27, 2003.
    The Honorable Pete V. Domenici,
    Chairman, Committee on Appropriations, Subcommittee on Energy and Water
            Development, U.S. Senate, Washington, DC 20510.
        Dear Chairman Domenici: The Metropolitan Water District of Southern
    California (Metropolitan) is pleased to submit the following testimony
    for the record, regarding programs contained in the U.S. Bureau of
    Reclamation's, the Department of Energy's and the Army Corps of
    Engineers' fiscal year 2004 budgets for your Subcommittee's hearing
    record.
        Metropolitan strongly recommends your approval of a Reclamation
    fiscal year 2004 budget that includes $30 million in funding for the
    CALFED Bay-Delta Program. In addition, Metropolitan urges your support
    for the San Joaquin Water Supply and Exchange Program, as part of the
    reauthorization of the California Bay-Delta Act.
        We ask for your support for additional Federal funding for
    Reclamation's Colorado River Basin Salinity Control Program (Salinity
    Control Program). We request that Congress appropriate $17.5 million
    for implementation of the Title II--Basinwide Program, an increase of
    $8.302 million from the President's request to ensure water quality
    protection for this important source of water supply to Arizona,
    California, and Nevada. We support funding of the Grand Valley and the
    Paradox Valley Units of the Title II, Salinity Control Program at the
    President's requests of $752,000 and $2.102 million, respectively. In
    addition, we support funding of the Colorado River Water Quality
    Improvement Program at the President's request of $450,000. High
    salinity from the Colorado River continues to cause significant impacts
    to residential, industrial and agricultural water users. Furthermore,
    high salinity adversely affects the region's progressive water
    recycling programs, and is contributing to an adverse salt buildup
    through infiltration into Southern California's irreplaceable
    groundwater basins. The Salinity Control Program has proven to be a
    very cost-effective approach to help mitigate the impacts of higher
    salinity.
        In addition, we support funding of the Title I, Salinity Control
    Program at the President's request of $11.25 million to maintain the
    Yuma Desalting Plant (Plant) and the saline water Bypass Drain, and
    ensure that Mexican Treaty salinity requirements are maintained.
    Although the Colorado and Gila Rivers experienced above-normal runoff
    during the 1980's and 1990's, storage in the Colorado River system
    reservoirs has now dropped to a 30-year low. With declining reservoir
    levels, operation of the Plant is needed to reduce the amount of
    drainage water that is bypassed and not credited toward Mexico's Treaty
    entitlement delivery. As such, it is essential that Plant design
    deficiencies be corrected promptly as a step toward its efficient
    operation.
        Further, we also ask that you support the reauthorization of the
    Water Desalination Act of 1996 [Public Law 104-298, Section 8], which
    Metropolitan supported in the fiscal year 2003 budget process, as well
    as increasing the President's fiscal year 2004 budget request from
    $775,000 to $4 million. Federal support of desalination is vital to
    realizing technological advances leading to reduced costs, improved
    efficiency and cost-effectiveness in order for this resource to become
    an important water supply program for many regions of the United
    States.
        Metropolitan also requests your support for Reclamation's
    Endangered Species Recovery Implementation program at the President's
    request of $13.371 million. This activity develops and implements
    projects for the stewardship of endangered, threatened, proposed, and
    candidate species that are resident or migratory to habitats within the
    Colorado River Basin as well as other regions of the western United
    States. In addition, Metropolitan urges your support for the Lower
    Colorado River Operations Program at the President's request of $13.822
    million. This program includes:
      --Protection of endangered species, ecological restoration, and
            riparian restoration research along the lower Colorado River,
      --Development of the cost-shared Arizona-California-Nevada/federal
            Lower Colorado River Multi-Species Conservation Program to
            provide future Endangered Species Act compliance, and
      --Implementation of the Secretary of the Interior's responsibilities
            for administering federal laws and court decrees related to
            operation of Reclamation's reservoirs.
        California has developed a Colorado River Water Use Plan
    (California Plan) to provide a framework for the agencies that rely on
    river water to reduce diversions to within California's 4.4 million
    acre-foot per year normal apportionment. Successful implementation of
    the California Plan is vital to the water supply reliability of the
    State of California, and is critical to the Colorado River interests of
    the six other Colorado River Basin States and Mexico. Two water
    management reservoirs near the All-American Canal, an 8,000 acre-foot
    reservoir to the east of the Imperial Valley and a 3,000 acre-foot
    reservoir on the western side of the Valley, would help facilitate the
    implementation of the California Plan and could be of significant
    benefit to the other Colorado River Basin states and Mexico for
    improved river operations and water deliveries. Reclamation funding of
    $6.9 million is needed in fiscal year 2004 in order to complete the
    environmental impact analysis and, if a decision is made to move
    forward, the initial stage of project design. Reclamation has been
    funding this work under the Colorado River Front Work and Levee System.
    As such, Metropolitan requests that the Subcommittee augment
    Reclamation's funding for this activity.
        Projects funded under Title XVI of the Reclamation Projects
    Authorization and Adjustment Act of 1992 (Public Law 102-575) and the
    Reclamation Recycling and Water Conservation Act of 1996 (Public Law
    104-266) will greatly enhance Southern California's water supply
    reliability and the environment through effective water recycling and
    recovery of contaminated groundwater. Additionally, Title XVI allows
    Reclamation to conduct much needed water recycling and desalination
    research programs, as well as, studies of potential water recycling
    projects. Funding in the fiscal year 2004 budget for previously
    unfunded projects, as well as the continued support for previously
    funded projects, is a positive step toward realizing regional water
    supply reliability. The Bureau of Reclamation's budget request for
    research into the technologies and science of water recycling is
    another vital step toward making water reuse a viable alternative for
    communities faced with limited water supplies. Metropolitan urges your
    full support for the $12.7 million for Title XVI.
        Metropolitan desires your support for the funding level of $6
    million, necessary for the Soil and Water Remediation-Moab Project
    associated with radioactive uranium mill tailings in Moab, Utah. The
    President's Fiscal Year 2004 Budget includes $2 million for maintenance
    of the Moab Tailings Project which would be used for site maintenance
    and completion of the Environmental Impact Statement (EIS) process.
    These funds would maintain the status quo, but they are not sufficient
    for continued work to remove surface and groundwater contamination and
    implement a reclamation plan. The President's Fiscal Year 2004 Budget
    proposal is not designed to conduct the necessary remediation work. The
    Colorado River adjacent to the site has been negatively affected from
    site-related contamination, mostly due to ground water discharge. This
    Project is essential for protecting the quality of Colorado River
    water. In addition to the $2 million in the President's Budget,
    Metropolitan supports an additional $4 million, as requested by
    Governor Leavitt of Utah, to accomplish the following: operation and
    maintenance of the interim groundwater pump and treat system;
    completion of groundwater studies; completion of site stabilization
    projects; and initiating design and onsite work for remediation.
        The Army Corps of Engineers' (Corps) comprehensive civil works
    program has the capability to contribute to the social, economic, and
    environmental well being of California. Metropolitan is primarily
    interested in the Corps' environmental restoration studies and projects
    that address the needs of the Bay-Delta Estuary. The President's
    proposed fiscal year 2004 budget includes numerous programs in the
    Corps' South Pacific Division, which includes California. Several
    ecosystem restoration studies and projects specifically address
    significant habitat issues at various locations in the Bay-Delta
    watershed. Corps programs that will contribute to the long-term Bay-
    Delta solution include environmental restoration studies in the
    Sacramento and San Joaquin River watersheds, habitat conservation and
    mitigation elements of flood damage prevention projects, and ecosystem
    restoration programs. Metropolitan urges Congress to fully support
    these Corps programs as the fiscal year 2004 Federal appropriations
    process moves forward.
        We look forward to working with you and your Subcommittee. Please
    contact Metropolitan's Legislative Representative in Washington, DC, if
    we can answer any questions or provide additional information.
                Very truly yours,
                                            Ronald R. Gastelum,
                                               Chief Executive Officer.

     METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA RECOMMENDATIONS FOR
                         FISCAL YEAR 2004 APPROPRIATIONS
    ------------------------------------------------------------------------
                                                President's         MWD
               Appropriations Bill                Budget      Recommendation
    ------------------------------------------------------------------------
    U.S. Bureau of Reclamation:
        California Bay-Delta Ecosystem           $15,000,000     $30,000,000
         Restoration........................
        Colorado River Front Work and Levee          155,000       6,900,000
         System, Water Management Reservoirs
         near the All-American Canal........
        Colorado River Basin Salinity
         Control Program--Title II:
            Basinwide Program...............       9,198,000      17,500,000
            Grand Valley Unit...............         752,000         752,000
            Paradox Valley Unit.............       2,102,000       2,102,000
        Colorado River Basin Salinity             11,250,000      11,250,000
         Control Program--Title I...........
        Colorado River Water Quality                 450,000         450,000
         Improvement Program................
        Desalination Research and                    775,000       4,000,000
         Development Program................
        Endangered Species Recovery               13,371,000      13,371,000
         Implementation.....................
        Lower Colorado River Operations           13,822,000      13,822,000
         Program............................
        Title XVI Water Reclamation and           12,700,000      12,700,000
         Reuse Program......................
        Water Conservation Field Services        \1\ 500,000     \1\ 500,000
         Program............................
    Department of Energy: Removal of               2,000,000       6,000,000
     Radioactive Tailings in Moab, Utah.....
    U.S. Army Corps of Engineers: South       ..............         ( \2\ )
     Pacific Division.......................
    ------------------------------------------------------------------------
    \1\ For Metropolitan Water District.
    \2\ Support Corps programs.

                                     ______

                              DEPARTMENT OF ENERGY

             Prepared Statement of Bob Lawrence & Associates, Inc.
                     high temperature superconductivity r&d
        Mr. Chairman and Members of the subcommittee. My name is Bob
    Lawrence, I am President of Bob Lawrence and Associates, Inc., of
    Alexandria, Virginia. I appreciate the opportunity to present this
    testimony, today, on the important subject of Superconductivity. I am
    here to request an appropriation of $49 million for the Department of
    Energy program for fiscal year 2004.
    Background
        Of all the technologies which are emerging today, Superconductivity
    is arguably one of the most promising in terms of dramatic, potential
    enhancements to American infrastructure and national benefits.
    Laboratory results are now moving into government-industry partnerships
    aimed at accelerating superconducting products into the electrical
    marketplace with concurrent, dramatic, energy efficiency and
    environmental improvements.
        Superconductivity is the property of a material to conduct
    unusually large quantities of electrical current with virtually no
    resistance. Since the middle of the century, researchers have known
    that certain ceramic materials show superconductive properties when
    they approach a temperature near absolute zero, or the temperature of
    liquid hydrogen and liquid helium. Practical applications of these
    materials are difficult, however, since they are characteristically
    very costly to make, very brittle in nature, and prohibitively
    expensive to cool to the required, very low temperature.
        In 1986, a new class of ceramic materials was discovered which
    showed superconductive properties at temperatures up to 34K. Since that
    time, improvements have produced superconducting materials at the
    temperature of liquid nitrogen, or 72K. These ``high temperature''
    superconductive (HTS) materials have generated great excitement since
    the projected costs of applications have dropped by orders of
    magnitude, and first viable products appear to be within reach.
                                  the program
        Today, a number of HTS-based pieces of electrical equipment are at
    the prototype stage with capable manufacturing entities intimately
    involved. Early candidates for commercial products include
    Transformers, Electric Motors, Generators, Fault Current Limiters, and
    underground Power Cables. Later in the commercialization process,
    replacements for overhead transmission lines are also foreseen;
    however, this will not be an early application. To enhance and
    accelerate the prospects for early commercialization of HTS products,
    the Department of Energy has developed a vertically integrated program
    in which product oriented teams are focused on the development and
    implementation of HTS equipment. Under the title of the
    Superconductivity Partnership Initiative (SPI), these vertically
    integrated teams typically each consist of an electric utility, a
    system manufacturer, an HTS wire supplier, and one or more national
    laboratories. Supporting these vertical teams is a Second Generation
    Wire Initiative, in which development teams are exploiting research
    breakthroughs at Los Alamos, Argonne, and Oak Ridge National labs that
    promise unprecedented current-carrying capabilities in high-temperature
    superconducting wires. Since superconducting wire is the main component
    of all superconducting cables, products and systems, the price drop
    projected by the Second Generation technology is highly significant and
    important to successful commercialization.
        Transformer development is being carried out by the team of
    Waukesha Electric Systems, Intermagnetics General Corporation,
    Rochester Gas and Electric, Rensselaer Polytechnic Institute, and the
    Oak Ridge National Laboratory. This team has conducted a series of
    reference designs concentrating mostly on a 30-MVA, 138-kV/13.8kV
    transformer which is representative of a class expected to capture
    about half of all U.S. power transformer sales in the next two decades.
    According to industry experts, Japan and Europe are somewhat ahead of
    the United States in transformer development.
        The United States HTS electric motor team is headed by Reliance
    Electric with American Superconductor Corp as the HTS coil supplier and
    manufacturer. Also on this team are Centerior Energy (a utility
    company) and Sandia National Laboratory. ``In February 1996, Reliance
    Electric successfully tested a four-pole, 1,800 rpm synchronous motor
    using HTS windings operating at 27-K at a continuous 150kW output. The
    coils . . . achieved currents of 100A . . . , 25 percent over the
    initial goal of 80 A.'' This program has now been extended to ``develop
    a pre-commercial prototype of a 3.7MW HTS motor''. The demonstration of
    this motor will be an important milestone in the commercialization
    process, since it will provide a measure of efficiency, reliability,
    and projected costs and benefits.
        Generator efforts in the United States have recently begun with a
    team headed by General Electric. The efforts here, again, appear to be
    behind those in Japan. In Japan, funds expended on HTS design,
    development, and demonstration exceed those in the United States. This
    Japanese, heavily funded effort involves 16 member organizations with
    representation from the electric utilities, manufacturers of electric
    power equipment, research organizations, manufacturers of HTS wire and
    tape, refrigeration and cryogenic suppliers, and independent research
    institutes.
        Fault Current Limiters represent a new class of electric utility
    equipment with many attractive properties. This type of equipment may,
    in fact, be a market leader, since its properties appear to provide
    substantial potential cost savings to electric utilities as well as
    containing power outages. This type of equipment is only possible using
    superconducting technology.
        Exciting developments have taken place in the field of underground
    HTS cables for transmission and distribution. In the United States, two
    teams are pursuing two different technical concepts, but each team is
    led by a powerhouse electrical cable manufacturer; Pirelli North
    America, and Southwire Co. First design cables are now under test in
    practical applications. Worldwide, about 10 superconducting electric
    power cable demonstrations are now underway, in various stages of
    completion.
    The Benefits
        Dramatic cost and energy savings are projected when the candidate
    systems and products from superconducting technology are fully
    implemented, with incremental benefits accruing from the time of
    technology readiness and commercial introduction to the time of full
    market penetration. When fully implemented into the electric generation
    and utilization sectors of our economy, superconducting technology is
    expected to save $8 billion per year in retail value of presently lost
    electricity, lost due to transmission and distribution. An additional
    $8 billion per year can be saved with the installation of
    superconductive transformers and electric motors. Yet another $1
    billion or so can be saved by full implementation of HTS generators.
    This totals fully implemented benefits of $17 billion per year from
    full implementation of HTS technology in presently envisioned
    equipment. Oak Ridge National Laboratory (ORNL) experts and studies
    carried out by Energetics, Inc. indicate that HTS underground cable
    savings would be in the range of 125,000 kWhr per mile, per year. At
    the present average rate of 6.89 cents per kWhr, this corresponds to
    retail level monetary savings of $8,612.50 per mile per year. These
    savings will flow directly into reductions in taxpayer electric bills,
    under a competitive electricity delivery environment.
    National Security
        Above ground transmission lines are vulnerable to terrorist attack,
    as well as severe weather. High Temperature Superconductivity would
    allow transmission lines to be placed underground with very large
    capacity increases per cross section. This also allows for a more
    environmentally effective use of the surface land. Higher national
    security and better environmental posture: a good combination.
        There are Defense applications of this technology, enabling in
    nature, applying to directed energy weapons. Exact applications are
    sensitive in nature, but it is important to note that the benefits from
    success in this technology will apply to many cross sections of the
    American economy and infrastructure.
        In conclusion, Mr. Chairman, I thank you for the opportunity to
    present this testimony. Major efforts in this technology are now
    underway in China, South Korea, Japan, and a number of European
    countries, as well as the United States. It is very important that we
    make every effort to be ahead of the rest of the world in this
    technology, and for that reason, I ask that the Committee provide an
    appropriation of $49 million for the Superconductivity R&D program for
    fiscal year 2004.
             electric transmission reliability and technology needs
        I am here, today, to request an appropriation of $18 million for
    fiscal year 2003 for Transmission Reliability, a subject area found
    within the Electric Energy Systems program of the Department of Energy.
    Within that amount, I request that you designate $4 million to continue
    the Aluminum Matrix Composite Conductor program which was started in
    fiscal year 2002. This program has the promise of evolving a new family
    of transmission line conductors which will carry twice the capacity of
    today's conductors, greatly reducing the need for new transmission
    rights-of-way. This will be, clearly, of tremendous benefit to our
    Nation.
        Since 1974, our country has confronted a series of alerts and
    crises involving energy. In the early pursuit of alleviating these
    crises, natural gas, coal, and electricity were examined as possible
    alternatives to oil. However, in the ensuing years, there has been a
    natural gas crisis, a natural gas bubble, another tightening of natural
    gas supply, wide swings in the prices of oil-based products, and now, a
    strong reminder in the electrical sector that our Nation's electricity
    generation and delivery system is in desperate need of upgrading and
    repair. Moreover, a new approach to planning for future electric
    generation and, most importantly, the delivery system, is critical.
        Numerous recent articles and reports describe the situation from a
    variety of perspectives. Clearly, there is no ``National Grid'' to
    accept and deliver electricity. Rather, our present system evolved from
    a patchwork of local systems designed to accept local generation and
    provide it to local customers from a regulated, wholly owned,
    vertically integrated structure. Today, the national thrust is to move
    this system into a configuration wherein merchant power generators sell
    to a variety of widely situated customers on a competitive basis, and
    the power is delivered through a reliable and affordable transmission/
    distribution network. How this situation will ultimately evolve remains
    conjecture; however, it is certain to involve a confluence of
    legislation, regulations, technology advances, and societal changes
    before it is all over.
        The Nation's present patchwork system clearly requires upgrading
    with a more global design based on a new system of planning and
    financing. The U.S. electricity industry is in the midst of a
    transition from a structure dominated by vertically integrated
    utilities regulated primarily at the State level to one dominated by
    competitive markets. In part because of the complexities of this
    transition, planning and construction of new transmission facilities
    are lagging behind the need for such grid expansion.
        Electricity, when transmitted, flows over all available paths to
    reach the customer and it cannot be easily directed in one particular
    way. Major problems are occurring as new merchant power plants are
    being built, but increased transmission capacity is not being
    installed. In 2000, normalized capacity was 17 percent lower relative
    to demand than it had been a decade earlier, and the projection for
    2009 shows a further decline of another 12 percent.
    Upgrades: Replacements, Additions, and Siting
        Transmission rights-of-way are rarely abandoned. Rather, existing
    conductors are replaced, often with wires capable of handling larger
    power flows, or towers and conductors are replaced. Due to the problems
    associated with constructing new transmission lines, it is important to
    examine the possible options for increasing the transmission capability
    on present sites and making maximum use of existing transmission
    systems through upgrades. When feasible, upgrades are an attractive
    alternative, because the costs and lead times are less than those for
    constructing new transmission lines.
        The most obvious but most expensive method for alleviating the
    thermal constraints on a line is to replace the lines with larger ones
    (conductors) through ``restringing'' or to add one or more lines,
    forming ``bundled'' lines. This approach requires consideration of the
    tower structures that support power lines.
        Other typical cost estimates for restringing transmission lines
    with larger conductors are:
      --60 kV line, to 397.5 kcmil: $40,000 per mile,
      --115 kV line, to 715.5 kcmil: $80,000 per mile,
      --230 kV line, to 1,113 kcmil: $120,000 per mile.
        ``Long-distance power transmission can be essential in a
    deregulated system, by increasing competitive offers for customers,''
    said Ken Rose, senior economist with the National Regulatory Research
    Institute in Columbus, Ohio. From suburbs to farms, the giant towers
    and the drooping lines they support are loathed and opposed. ``It's
    easier to site a generation plant than to build a 20-mile transmission
    line through people's backyards,'' said Mike Calimano, vice president
    for operations of the New York Independent System Operator, the State's
    power grid manager. ``We haven't built any [transmission lines] from
    Canada or the West since 1978, and that was a war,'' said Minnesota
    State Attorney General Mike Hatch. ``We had highway patrols trying to
    keep the peace. It was awful then,'' and will be again as new power-
    line projects go forward, he warned.
        The long-distance transmission lines, strung on 150-foot-tall steel
    towers spaced at quarter-mile intervals, face particularly strong local
    opposition. Citizen protests have also stalled plans to build power
    plants, but outrage soars when it comes to the high-voltage wires.
    Aluminum Matrix Composite Conductor Technology
        This advanced transmission line conductor is expected to carry
    twice as much electricity, per line, as present conductors, allowing
    for transmission upgrades without needing additional land rights-of-
    way. The program was begun in fiscal year 2002 with $4 million, and is
    structured to be a 3-year effort at $4 million per year. Substantial
    cost sharing from both industry and utilities is occurring. Continued
    funding would allow industry, Oak Ridge National Laboratory, and the
    Department of Energy to develop and demonstrate a new class of overhead
    conductors through laboratory tests and field trials. Under the
    proposed program, medium and large size constructions of composite
    conductors will be developed and tested in preparation for the field
    trials. Accessories tailored for each conductor construction will also
    be developed and tested. The testing will include a low-voltage outdoor
    test span operated by ORNL that can continuously cycle a 1,200-foot
    multispan line to high-temperature operation.
        Multi-year field trials will demonstrate medium and large size
    conductor performance under different conditions, such as various
    voltages, mechanical loading conditions, and operating conditions. WAPA
    will host the first field trial in fiscal year 2002 under this program.
    Field trials require performance monitoring, which spans more than 1
    year. A number of the proposed laboratory tests require months to carry
    out. Thus it is important that the proposed program be viewed with
    respect to the overall multi-year plan.
    Objectives of the Program in 2003 and 2004
        The level of effort in fiscal year 2003 will be of slightly less
    magnitude than the effort that was executed in fiscal year 2002 due to
    a funding level of $3 million in fiscal year 2003 as opposed to the $4
    million in fiscal year 2002.
        The technical objectives in fiscal year 2003 and fiscal year 2004
    are a continuation of 2002 activities as follows:
      --Monitor the WAPA field trial with the 795 kcmil ACCR over a minimum
            of 1 year, and preferably 2 years.
      --Complete the laboratory testing of the 1272 kcmil and 598 kcmil/TW
            ACCR. The testing is aimed at understanding and modeling the
            conductor mechanical and electrical performance.
      --Complete the thermal cycling of 795 kcmil ACCR at ORNL. Install and
            test the 1272 kcmil and 598/TW conductors on the ORNL test
            line. The objective of this task is to evaluate the performance
            of 795, 1272 and 598/TW and accessories in operation at
            elevated temperature. The test can simulate in 3 months the
            emergency current conditions that would be expected over 40
            years of operation.
      --Install and monitor the 1272 kcmil in a new field trial with a
            utility to be determined. The objective of this field test is
            to demonstrate the installation, operation, and reliability of
            1272 family of conductors for use on 230kV-500kV applications.
      --Install and monitor the 598 kcmil/TW with in a field trial with a
            utility to be determined. The objective of this field test is
            to demonstrate the installation, operation, and reliability of
            high efficiency composite conductors.
      --Evaluate system network impacts of conductor upgrades.
      --Establish national perspective regarding potential of new
            conductors.
      --Draft industry standards necessary for commercial introduction.
        At this point in time, a comprehensive study has been completed by
    the Department of Energy on the National Transmission Grid System. The
    Study was completed in December 2001. Since that time, the Office of
    Management and Budget has refused to fund the results and objectives of
    the study, even though it is comprehensive in nature and could form the
    basis for Congress to appropriate needed funds to fix our Nation's
    critical grid problems. This action is unfortunate, and clearly not in
    the Nation's best interest.
        We ask the subcommittee to restore Transmission Reliability program
    to the funding level that it had in fiscal year 2002--$18 million.
                     cost/benefits of geothermal energy r&d
        I and my firm, have been working with the Department of Energy's
    Geothermal program since 1990, and during the past 13 years, we have
    seen many positive changes in the program which are helpful to the
    industry and to our country as a whole. I come before you, today, to
    request $37 million for the program for fiscal year 2004, of which, $4
    million would be applied to the GeoPowering the West portion of the
    Program.
        Geothermal electric generation, at 16 billion Kw/hrs per year, is
    the largest contributor to delivered electricity from Renewables except
    for Hydro generation. For the past several years, the Geothermal
    Technology program has been held back at budget levels below $30
    million. This has been harmful to the industry which is dependent upon
    the technology evolving from the DOE programs to develop new and ever
    more difficult resources. During the fiscal year 2003 appropriations
    process, the Senate funded the Geothermal program at $37 million.
    Although the Conference only funded the program at $30 million, it was
    certainly a step in the right direction. It is consummately in the
    national interest to increase the funding level of this program to $37
    million annually to accelerate increased geothermal use for energy
    purposes.
        At $37 million, last year's Senate level, it gives the Geothermal
    program the chance to move forward with industry on several fronts. The
    $7 million additional will actually be closer to $14 million
    additional, since it is expected to draw an equal amount of industry
    cost sharing. At the $37 million level, strong programs can move ahead
    addressing Enhanced Geothermal Systems, where tertiary treated waste
    water is injected deep into the earth to provide additional needed
    water to under-saturated geothermal resources. The GeoPowering the West
    program, addressing 19 Western States, can be strengthened. And most
    importantly, Cost-Shared Exploratory Drilling, Reservoir Definition,
    and New Resource Exploration can move forward in areas where it has
    slowed to nearly a stop. Even at $37 million, the Geothermal program
    will be the lowest funded of all Renewables, even though the program
    has been the most successful based on present generation annual levels.
    Overview
        Cost-shared Department of Energy investments in geothermal energy
    R&D, starting in the 1970's, have made possible the establishment of
    the geothermal industry in the United States. Today that industry
    generates over 16 billion kilowatt-hours per year in the United States,
    alone. The total, retail value of this electricity exceeds $1 billion
    per year. The Industry:
      --returns over $41 million annually to the Treasury in royalty and
            production payments for geothermal development on Federal
            lands;
      --supplies the total electric-power needs of about 4 million people
            in the United States, including over 7 percent of the
            electricity in California, about 10 percent of the power in
            Northern Nevada, and about 25 percent of the electricity for
            the Island of Hawaii (the Big Island);
      --employs some 30,000 U.S. workers;
      --displaces emissions of at least 16 million tons of carbon dioxide,
            20,000 tons of sulfur dioxide, 41,000 tons of nitrogen oxides,
            and 1,300 tons of particulate matter every year, compared with
            production of the same amount of electricity from a State-of-
            the-Art coal-fired plant;
      --has installed geothermal projects worth $3.0 billion overseas,
            mostly in the Philippines and Indonesia.
    Near Term Potential
        The geothermal industry, with appropriate government R&D support,
    can provide an additional 600 Megawatts of power in about 18 months.
    This power will come from:
      --Use of tertiary treated wastewater injection (Enhanced Geothermal
            Systems): 200 MW.
      --Implementation of new technologies into old plants, well field
            upgrades, and turbine replacements: 400 MW.
        In addition, direct use increases, through the GeoPowering the West
    initiative, will provide an additional, near term, 100MW of use for
    heating, cooling, industrial drying, agricultural applications, and
    recreational purposes.
        This is an additional 700MW of clean, renewable, geothermal energy
    available within 2 years with appropriate government funding and
    support, right in the heart of the Western States that presently have
    the most critical power problems.
    Longer Term Potential
        The long term potential of Geothermal energy in the United States
    is estimated to be 25,000 MW of electrical generation and an additional
    25,000 MW of direct use. To date, the geothermal industry has made use
    of only the highest grade geothermal resources in the United States.
    The keys to realizing the enormous potential of geothermal energy are
    improved technology to tap resources that can not, at present, be
    economically developed, and cost shared programs with industry for
    accelerated implementation of the technology. Substantial investments
    in R&D by the geothermal industry, acting alone, have not happened and
    are unlikely, because the developers are uniformly financial entities,
    with small engineering components, which rely on the technology
    centered at national laboratories and university institutes for project
    development and engineering.
    Technology Needs
        Applied R&D is essential to reduce the technical and financial
    risks of new technology to a level that is acceptable to the private
    sector and its financial backers. The U.S. geothermal industry has
    conducted a series of workshops to determine the industry's needs for
    new technology and has recommended cost-shared R&D programs to DOE
    based on the highest-priority needs.
        The Geothermal Industry supports the Strategic Plan of the DOE
    Office of Geothermal Technology. The plan calls for increased spending,
    quickly reaching $50-60 million per year, a geothermal budget level
    consistent with that recommended by the President's Committee of
    Advisors on Science and Technology (PCAST) in their 1997 report.
    Technical needs include:
        Drilling.--Geothermal drilling differs dramatically from oil and
    gas drilling since the necessary production holes are three times as
    wide as oil and gas production holes, and they must be drilled through
    hard, volcanic rock rather than sedimentary soils. Also, because of the
    high temperatures and corrosive nature of geothermal fluids, geothermal
    drilling is much more difficult and expensive than conventional oil and
    gas drilling. Each well costs $1 million to $3 million, and an average
    geothermal field consists of 10 to 100 or more wells. The drilling
    technology program continues to show cost-saving advancements.
        Exploration and Reservoir Technology.--The major challenge facing
    the industry in exploration and development of geothermal resources is
    how to remotely detect producing zones deep in the subsurface so that
    drill holes can be sited and steered to intersect them. No two
    geothermal reservoirs are alike. Present exploration techniques are not
    specific enough, and result in too many dry wells, driving up
    development costs. The industry needs better geological, geochemical,
    and geophysical techniques, as well as improved computer methods for
    modeling heat-extraction strategies from geothermal reservoirs.
        Energy Conversion.--The efficiency in converting geothermal steam
    into electricity in the power plant directly affects the cost of power
    generation. During the past decade, the efficiency of dry- and flash-
    steam geothermal power plants was improved by 25 percent. It is
    believed that geothermal power-plant efficiency can be improved by an
    additional 10-20 percent over the next decade with a modest investment
    in R&D.
        Reclaimed Water Use for Geothermal Enhancement.--Many potential
    geothermal resources are not utilized due to insufficient water in the
    hot zones. Reclaimed water, the disposal of which is an expensive
    problem for many communities, could be used productively, in many
    cases, to enhance the geothermal resources, making them more
    economically viable for local use. In the United States, over 300
    western communities each have a potentially useable geothermal resource
    co-located within 5 miles. The technology which will evolve from this
    effort could be broadly applicable to these communities and their
    combined energy and wastewater problems.
        GeoPowering the West.--This initiative, now in its third year,
    seeks to develop, as well as provide information and implement those
    technologies needed to utilize geothermal resources in the over 300
    presently identified ``co-located'' communities in 19 Western States.
    Studies now underway may increase the number of communities to over
    350. The program is creating partnerships with the subject communities
    to utilize hot geothermal waters for direct use applications such as
    space conditioning, industrial drying, agricultural applications, and
    recreational purposes. Additionally, the program will provide
    technology needed to explore these resources for generation potential.
    In the short time that this program has been ongoing, it has played a
    major role in expanding the number of States with geothermal electric
    generation potential from four to eight, or a doubling of candidate
    States. This program is singularly important to the expanded geothermal
    future of our country.
        GeoSciences.--Basic research in the GeoSciences needs to continue
    at national laboratories, universities, and research institutes to
    expand and advance the knowledge base in this technology area. Funding
    the GeoSciences ensures a flow of new, capable, engineers and
    scientists into this important field as well as expanding the basic
    knowledge base surrounding geothermal resources and geothermal energy.
    It is important for this program to continue.
    Conclusion
        The cost shared, cooperative, research, development, and
    implementation programs of the Department of Energy's Geothermal
    program should serve as a model for programs whose purpose is to
    provide and enhance national benefits, while reaping a return on
    investment for the taxpayer. The $41 million that the industry returns
    to various governmental entities in royalties and leases exceeds,
    annually, the amount that the government invests in the future of the
    technology. Yet, the future of the technology and the expanded industry
    is closely tied to these programs. Clearly, the Geothermal research and
    technology development is an outstanding example of a proper, taxpayer
    investment. $37 million is required for fiscal year 2004.
                                     ______

         Prepared Statement of the Solar Energy Industries Association
        Mr. Chairman, members of the committee, I would first like to thank
    you for the opportunity to address the committee regarding the state of
    the solar energy research programs sponsored by the Federal Government.
    Our organization, the Solar Energy Industries Association, represents
    photovoltaic, concentrating solar power, and solar thermal
    manufacturers, distributors, contractors installers and component
    suppliers throughout the United States.
        These businesses have experienced a recent growth rate that can
    only be described as blistering. Our most recent production survey data
    shows that the world photovoltaics market last year increased by
    approximately 40 percent above 2001 levels. These growth rates are why
    U.S. photovoltaic production has doubled since 1996, and quadrupled
    since 1994. Meanwhile, a project is underway to bring an additional 50
    MW clean, reliable Concentrating Solar Power online by 2004. This
    technology alone will be providing more than 400 MW of power in the
    United States--enough to power more than 100,000 U.S. homes.
        Market success is being further recognized at the polls. A USA
    Today/CNN/Gallup poll released in May 2001 found that 91 percent of
    Americans support ``investments in new sources of energy such as solar,
    wind and fuel cells,'' with only 6 percent opposed. Meanwhile, in a
    Washington Post/ABC News poll from June 2001 on American's desired
    solutions to our energy problems, the No. 1 choice across America was
    ``develop more solar and wind power.'' A 2001 Newsweek poll similarly
    found 84 percent of Americans favor increased funding for the
    development of solar and wind power.
        This demand is further spurred by increased performance and
    decreased costs. DOE research continues to bring the cost of solar
    systems down markedly even as performance improves, fostering the
    strong growth of a domestic high-tech manufacturing base. However,
    we're starting to see a very disturbing trend in photovoltaics. The
    U.S. photovoltaics market reportedly increased 60 percent last year.
    Total world manufacturing increased nearly 40 percent. However, U.S.
    manufacturing barely held steady, losing a great deal of market share,
    to Japan and the European Union, as can be seen below.
        Distressingly similar trends can be seen in the concentrating solar
    power market, where the ``power tower'' technology originally developed
    in collaboration with the Department of Energy is now seeing its
    commercial debut in Spain's ``Solar Tres'' project, and in the solar
    hot water market, where Israel and other countries have seized a
    commanding lead.
        In all of these countries, the potential market is no stronger than
    that in the United States. Government support, however, is much more
    robust. In the coming years, we fully expect that increasingly
    relevant, inexpensive, and high-performance solar technologies will
    continue their exponential rate of sales growth. The only question is
    whether the United States will fully harness this engine of
    environmental benefit, energy security, and high-tech jobs growth, or
    if we will simply yield to the competition of other countries, losing
    what was once unassailable market dominance to our competitors. This
    would be a sad echo of what has already happened with the wind turbine
    market.
        Solar energy's benefits to the Nation are far too numerous to list
    here comprehensively. However, we cannot mention enough that as a long-
    lived source of perpetually renewable energy, solar enables us to make
    more of our energy at home, rather than being forced to acquire it
    overseas or from volatile fuel markets. By its modularity and
    simplicity, it can provide quick answers to grid congestion or supply
    inadequacy problems, while sidestepping environmental and NIMBY issues.
    The high coincidence of solar panels' peak output and daily peak demand
    cycles makes them a particularly attractive solution for areas that
    experience load pockets or seasonal demand spikes, avoiding the use of
    the dirtiest and least efficient conventional generators. Finally,
    solar will undoubtedly be one of the critical cornerstone technologies
    of the hydrogen economy, giving us the ability to produce motor fuels
    when and where we want them, with no emissions of any kind.
        The most well known programs within DOE, and those that have
    received the most consistent support are the photovoltaics research
    initiatives. However, even these are likely still not realizing their
    full potential. This is ``gold standard'' research--a 2001 Peer Review
    of the DOE Photovoltaic Program concluded that:

        ``In terms of the programs' relevance to national needs, the
    panelists found that the PV program's work was outstanding across all
    activities . . . In summary, it is the panel's considered opinion that
    the PV program is doing an extremely effective job of setting
    priorities, balancing allocation of available resources, recognizing
    and addressing critical problems and barriers to progress and
    commercialization, and supporting the quality of work required to
    achieve its goals . . . The panel notes that the consistently high
    rankings assigned in this evaluation are very unusual, and they are
    also very deliberate . . . The panel believes this to be a truly
    outstanding element of the Department of Energy's programs.''

                                                                                    SOLAR CELL PRODUCTION, 1988-2002
                                                                                                [MW/year]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          1988     1989     1990     1991     1992     1993      1994      1995      1996      1997     1998     1999     2000      2001      2002
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Rest of World.....................................      3        4        4.7      5        4.6      4.4       5.6       6.35      9.75      9.4     18.7     20.5     23.42     32.62     47.8
    Europe............................................      6.7      7.9     10.2     13.4     16.4     16.55     21.7      20.1      18.8      30.4     33.5     40       60.66     86.38    112.75
    Japan.............................................     12.8     14.2     16.8     19.9     18.8     16.7      16.5      16.4      21.2      35       49       80      128.6     171.22    251.07
    United States.....................................     11.1     14.1     14.8     17.1     18.1     22.44     25.64     34.75     38.85     51       53.7     60.8     74.97    100.32    100.6
                                                       ---------------------------------------------------------------------------------------------------------------------------------------------
          Total.......................................     33.6     40.2     46.5     55.4     57.9     60.09     69.44     77.6      88.6     125.8    154.9    201.3    287.65    390.54    512.22
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

        Within these programs, the cost-shared components have been
    experiencing particular success. The advanced photovoltaics
    manufacturing, (formerly PVMaT,) Thin Films Partnership, and Building-
    Integrated PV (BiPV) programs obtain cost-competitive research in
    coordination with industry, while keeping solar manufacturing in the
    United States. Manufacturers of solar and related equipment are located
    in States including California, Maryland, Delaware, Florida, Arizona,
    New Jersey, Ohio, Michigan, Tennessee, and Massachusetts, employing
    thousands of workers, all of whom benefit from the increased
    performance realized from DOE programs.
        The advanced photovoltaics manufacturing programs have focused on
    helping to bringing efficiency and technology to bear on the complex
    process of manufacturing solar cells, having now brought module-
    manufacturing costs down by more than 50 percent. These innovations
    occur in a competitive cost-sharing environment that ensures rapid and
    cost-effective development and adoption of technologies that would not
    likely emerge otherwise. It is a critical component to maintaining U.S.
    technological viability in the face of particularly aggressive and
    growing German and Japanese research efforts.
        The BiPV program has attracted Administration notice, with the
    Fiscal Year 2003 Congressional Budget Document trumpeting ``an exciting
    and rapidly growing solar application which . . . will help cross the
    profit threshold that holds the key to significant growth in
    distributed, grid-connected electricity markets.'' Meanwhile, the Thin
    Films Partnership continues to make important discoveries, routinely
    knocking down their own efficiency records while investigating
    materials that show the real, near-term potential of cutting module
    prices by half or more. To support the research needs of the evolving
    technology and growing industry behind these programs, SEIA requests at
    least $100 million for the photovoltaics program in total.
        Photovoltaics, of course, do not form a functioning system on their
    own, and we therefore request that the systems and reliability account
    receive robust funding so that all necessary inverter and balance-of-
    systems work can be carried out.
        A worrisome budget note is the effective closeout of the
    Concentrating Solar Power (CSP) program. CSP systems currently produce
    354 MW of clean, reliable, and relatively inexpensive power in the
    California desert. Reentering the market with newer, more refined, and
    more sophisticated technologies, early construction has begun for
    another 50 MW plant in Nevada, and a 1 MW plant in Arizona. Other
    project sites are being sought out or are in early negotiations now,
    and the Western Governor's Association has stated that they support
    further developing this resource.
        A recent ``due diligence'' review of the CSP program, conducted by
    third party consultants Sargent and Lundy under the auspices of the
    National Research Council, found that ``CSP technology is a proven
    technology for energy production, there is a potential market for CSP
    technology and that significant cost reductions are achievable assuming
    reasonable deployment of CSP technologies occurs.'' The
    Administration's own budget document for 2003 states that:

        ``Large-scale CSP technologies have been operating successfully in
    the California desert for 15 years. Over this time the cost of these
    systems has decreased by a factor of 3, and . . . they are currently
    the least expensive source of solar electricity. Recent technology
    advancements . . . (have) revitalized the CSP industry and placed them
    in a position to play a major role in near-term green power
    opportunities, both domestically and overseas, as costs are projected
    to drop into the 6-8 cents/kWh range.''

        Given this degree of support, promise, and sheer technological
    achievement, a closeout budget is simply unjustifiable.
        In the recently released fiscal year 2003 omnibus appropriations,
    Congress instructed the Department to ``spend not less than $5,500,000
    for the continuation of work on concentrating solar power''. This
    minimum level is wholly inadequate to operate an effective program. The
    funding roller coaster for these programs has damaged their ability to
    make long-term investments and to retain top-quality staff. Funding in
    the range of $25 million would allow the Department of Energy, through
    the national laboratories at Sandia and NREL, to validate technology
    and components with industry as well as lowering operations and
    maintenance costs in a stable environment. Given the growth potential
    of this industry, and the very strong international interest in these
    technologies, it seems a small price to pay.
        We also note with interest the provision of the current Senate
    Republican staff draft of the energy bill that provides substantial
    research support for using Concentrating Solar Power as a source of new
    hydrogen fuel. The simplest means of funding this account may well be
    the hydrogen portion of the budget, which should address hydrogen
    production from renewable resources.
        SEIA also strongly supports the Administration's support for Solar
    Buildings products and projects, including the visionary Zero Energy
    Buildings Program. The multi-year goal of Zero Energy Buildings (ZEB)
    is to achieve the requisite technology advances to spur widespread
    adoption of zero energy residences by 2010 and zero energy commercial
    buildings by 2015. This would slow and eventually eliminate new
    buildings' consumption of our finite energy sources. Builders around
    the country are increasingly developing new construction techniques,
    utilizing new building materials, and including solar technologies
    which will achieve zero finite fuel source energy consumption. For
    these programs we request $8 million in funding.
        A different program, formerly filed under the ``solar buildings''
    heading, is Solar Heating and Lighting. Solar water heating
    technologies are utilized around the world in quantities far exceeding
    those in the United States. Such systems can significantly reduce the
    consumption of electricity, and of natural gas, which is increasingly
    being used to generate electricity, exposing the country both to
    increasing energy dependence on foreign nations and to the inherent
    risks of transporting these fuels. Solar water heating technologies are
    already ubiquitous in many other countries, thereby saving other energy
    sources for higher value purposes.
        Within this program, emphasis will be placed on reducing the cost
    of solar water heating by using light-weight polymer materials that can
    replace the heavy copper and glass materials used in today's solar
    thermal collectors. The goal is to complete R&D on new polymers and
    manufacturing processes to reduce the cost of solar water heating to
    4 cents/kWh in 2004. We recommend that this program be funded
    explicitly at the $5 million level.
        We are further concerned that in many cases, the budget for ``solar
    buildings'' is frequently confused by the inclusion of non-solar
    technologies and research programs. These earmarks tend to distract
    resources and attention from important core research, and we urge that
    they be reexamined and strictly limited.
        With these minor changes to the existing budget, we are confident
    that the committee can lay the foundations for a solar future where the
    United States can regain its lead and reap the many benefits of this,
    the cleanest of all energy sources.
                                     ______

         Prepared Statement of the Biomass Energy Research Association
        This testimony pertains to the fiscal year 2004 appropriation for
    biomass research, development, and deployment (RD&D) conducted by the
    Department of Energy's (DOE's) Office of Energy Efficiency and
    Renewable Energy (EERE). Separate statements will be submitted in
    support of biomass RD&D performed under the Interior and Related
    Agencies Bill by EERE's Office of Industrial Technologies, and on
    forest biomass production research by the U.S. Department of
    Agriculture Forest Service (USDAFS).
        BERA recommends that for fiscal year 2004, $114,500,000 be
    appropriated for RD&D under EERE's Biomass and Biorefinery Systems
    Program, and biomass-related Hydrogen Technology Program.
      --$24,000,000 to continue the Bioenergy and Bioproducts Initiative
            (BBI, Crosscutting RD&D) and $5,000,000 to continue the
            Regional Biomass Energy Program (RBEP).
      --$21,000,000 for R&D under the core programs: Advanced Biomass
            Technology--Thermochemical Conversion and Bioconversion.
      --$26,000,000 for R&D and $32,000,000 for the industry cost-shared
            scale-up projects under the core programs: Systems Integration
            and Production (Exclusive of the BBI).
      --$6,500,000 for the biomass-related core programs under Hydrogen
            Technology.
        On behalf of BERA's members, I would like to thank you, Mr.
    Chairman, for the opportunity to present the recommendations of BERA's
    Board of Directors for the high-priority projects and programs that we
    strongly urge be continued or started. BERA is a non-profit association
    based in Washington, DC. It was founded in 1982 by researchers and
    private organizations that are conducting biomass research. Our
    objectives are to promote education and research on the production of
    energy and fuels from virgin and waste biomass that can be economically
    utilized by the public, and to serve as a source of information on
    biomass RD&D policies and programs. BERA does not solicit or accept
    Federal funding for its efforts.
        In fiscal year 2003, about 30 percent of the appropriation for
    EERE's RD&D was provided as earmarked funds. This is less than the 43
    percent figure for fiscal year 2002, but EERE's planned objectives for
    their core programs will be extremely difficult or impossible to
    achieve because the baseline funding requested and the appropriation
    were almost the same in fiscal year 2003. The excessive earmarks do not
    allow for sufficient funding of the core programs, and several cut-
    backs have been necessary. BERA respectfully asks the Subcommittee to
    carefully consider the impacts of earmarks on EERE's RD&D. If they are
    for projects that are not in DOE's formal request, BERA urges that they
    be add-ons to the baseline funds rather than deductions.
        The original goal of the BBI created as a result of ``The Biomass
    Research and Development Act of 2000,'' and Title IX of the Farm Bill,
    was to triple the usage of bioenergy and biobased products. Congress
    has provided annual funding for the BBI since fiscal year 2000. A
    strategic plan has been developed by the multi-agency Biomass Research
    and Development Board (BRDB), co-chaired by the Secretaries of Energy
    and Agriculture, to achieve this goal. Its achievement is necessary
    because of environmental, energy security, and projected fuel supply
    issues, and our increasing dependence on imported oil. We must
    determine whether practical biomass systems capable of displacing much
    larger amounts of fossil fuels can be developed. The fossil fuel
    displaced by waste and virgin biomass in 2000 was 1.55 million BOE per
    day, approximately 79 percent of which was wood-based. In DOE's funding
    request, the BBI is included under ``Crosscutting Biomass R&D.'' BERA
    strongly urges that the BBI be continued in fiscal year 2004 at the
    funding level recommended by BERA, and that the highest priority be
    given to development of this program component.
               program integration, coordination, and management
        For several years, BERA has urged that all biomass-related research
    funded by DOE should be coordinated and managed at DOE Headquarters so
    that the program managers are heavily involved in this activity. We are
    pleased to note that this process, which began in fiscal year 2002, has
    continued in fiscal year 2003. BERA congratulates DOE on the progress
    made in restructuring the program and its management. BERA also
    congratulates DOE and USDA for the new spirit of working together and
    coordinating the programs of each department to increase the usage of
    agricultural and forestry biomass for the production of much larger
    amounts of affordable fuels, electricity, and biomass-derived products
    than have been realized in the past. These efforts are expected to help
    facilitate the transition of waste and virgin biomass in the USA into
    major sources of renewable energy, fuels, and chemicals.
        BERA urges that the BBI be incorporated into the overall Federal
    biomass research program. Without it, the time table for this
    transition will be stretched out for several decades and possibly never
    happen except to a very limited extent for niche markets. Large,
    strategically located, energy plantations are ultimately envisaged in
    which waste biomass acquisition and virgin biomass production systems
    are integrated with conversion systems and operated as analogs of
    petroleum refineries to afford flexible slates of multiple products
    from multiple feedstocks. Unfortunately, relatively large amounts of
    capital and inducements are required to get the private sector involved
    in developing even modest size projects in the field. So to help
    implement this program, BERA includes the BBI as a line-item in its
    annual testimony.
        BERA also continues to recommend that implementation of the BBI
    should include identification of each Federal agency that provides
    funding related to biomass energy development, each agency's programs,
    and the expenditures by each agency. DOE and the USDA have initiated
    this process. This is an on-going activity that should be expanded to
    include other agencies and departments and help fine-tune the critical
    pathways to program goals. Continual analysis of the information
    compiled should enable the coordination of all Federally funded biomass
    energy programs through the BRDB to facilitate new starts focused on
    high priority targets, and help to avoid duplication of efforts,
    unnecessary expenditures, and continuation of projects that have been
    completed or that do not target program goals. Full implementation of
    the BBI will enhance the value of the Federal expenditures on biomass
    research to the country in many different ways.
                              bera recommendations
        BERA's project recommendations consist of a balanced program of
    mission-oriented RD&D on conversion research and technology transfer to
    the private sector. Advanced conversion processes and power generation
    technologies, alternative liquid transportation fuels, and hydrogen-
    from-biomass processes are emphasized. Biomass production RD&D for
    energy uses is ultimately expected to be done by the USDA.
        BERA continues to recommend that at least 50 percent of the Federal
    funds appropriated for biomass research, excluding the funds for scale-
    up projects, are used to sustain a national biomass science and
    technology base via sub-contracts for industry and universities. While
    it is desirable for the national laboratories to coordinate this
    research, increased support for U.S. scientists and engineers in
    industry, academe, and research institutes that are unable to fund
    biomass research will encourage commercialization of emerging
    technologies and serious consideration of new ideas. It will also help
    to expand the professional development and expertise of researchers
    committed to the advancement of biomass technologies.
        In its core RD&D, EERE has terminated research in several microbial
    and thermochemical conversion areas. BERA believes that a balanced
    program of high-priority research should be sustained and protected, so
    we continue to recommend both a diversified portfolio of research and
    an appropriate amount of funding for scale-up without diminishing
    either EERE's R&D or scale-up programs. BERA's specific dollar
    allocations are listed in the table on page 3. Additional commentary on
    each program area is presented on pages 4 and 5. Other mission-oriented
    biomass RD&D programs are funded through EERE's Office of Industrial
    Technologies (OIT) under the Interior and Related Agencies Bill. DOE's
    basic research on biomass energy outside of EERE by the Office of
    Science, which supports academic research, should be designed to
    complement EERE's mission-oriented biomass RD&D and the BBI.
                allocation of appropriations recommended by bera
        BERA recommends that the appropriations for biomass RD&D in fiscal
    year 2004 be allocated as shown in the accompanying table. BERA's
    recommendations are generally listed in the same order as DOE's
    requests for funding under the headings Energy Supply, Biomass Program,
    Biomass/Biorefinery Systems R&D; and Energy Supply, Hydrogen
    Technology, Hydrogen/Fuel Cells/Infrastructure Technologies Program.
    However, several research areas are included that are either new or
    that BERA recommends be restored to sustain a balanced program. Note
    that in fiscal year 2004, EERE incorporated several new changes in
    program names and nomenclature in addition to those made in fiscal year
    2003, and zeroed-out or moved some programs between EERE's Offices.
    Note also that the recommended budget for each scale-up category does
    not include industry cost-sharing, which is required to be a minimum of
    50 percent of each project cost. BERA recommends that funds for the BBI
    be used mainly for scale-up projects after evaluating the projected
    contribution of each project to the BBI's goals. New projects should
    not be started until this is done.

    ----------------------------------------------------------------------------------------------------------------
                                                                                            Recommended Budget
       Office of Energy Efficiency and Renewable              Program Area           -------------------------------
                        Energy                                                         For Research    For Scale-Up
    ----------------------------------------------------------------------------------------------------------------
    Biomass/Biorefinery Systems:
        Advanced Biomass Technology...............  Thermochemical Conversion:
                                                        Combustion..................      $2,000,000
                                                        Gasification................       2,000,000
                                                        Pyrolysis...................       2,000,000
                                                        Liquefaction................       2,000,000
                                                    Bioconversion:
                                                        Fermentation (Ethanol)......       4,000,000
                                                        Organisms and Enzymes.......       6,000,000
                                                        Fermentation (Methane)......       1,000,000
                                                        Chemicals...................       2,000,000
        Systems Integration/Production............  BBI (Crosscutting RD&D)\2\......       2,000,000     $22,000,000
                                                    Thermochemical Conversion:
                                                        Ethanol.....................       3,000,000       4,000,000
                                                        Other Oxygenates/Mixed             4,000,000       4,000,000
                                                     Alcohols.
                                                        Syngas-Based Chemicals,            2,000,000       4,000,000
                                                     Fuels\3\.
                                                        Ash Deposition, Uses,              1,000,000
                                                     Disposal.
                                                        By-Products, Recovery, Uses.       1,000,000
                                                        Improved Emissions, Controls       2,000,000
                                                        Wastewater Treatment........       2,000,000
                                                        Hot Gas Clean-Up............       1,000,000
                                                    Small Modular Biopower..........               0       2,000,000
                                                    Feedstock Infrastructure........       2,000,000
                                                    Bioconversion:
                                                        Ethanol Scale-Up with                      0       8,000,000
                                                     Cellulosics.
                                                        By-Products, Recovery, Uses.       1,000,000
                                                        Improved Emissions, Controls       1,000,000
                                                        Wastewater Treatment........       2,000,000
                                                    Integrated Biorefinery
                                                     Development:
                                                        Designs, Economics, Markets.       1,000,000
                                                        Product Slates, Flexibility,       1,000,000
                                                     Costs.
                                                        Siting, Acquisition,               2,000,000      10,000,000
                                                     Construction.
                                                    Regional Biomass Energy                        0       5,000,000
                                                     Program\3\.
                                                   -----------------------------------------------------------------
          Subtotal................................  ................................      49,000,000      59,000,000
                                                   -----------------------------------------------------------------
    Hydrogen Technology\1\........................  Thermal Processes (Reforming)...         500,000       1,000,000
                                                    Photolytic Processes (Algae)....       1,000,000               0
                                                    Innovative Conversion Processes.       4,000,000               0
                                                   -----------------------------------------------------------------
          Subtotal................................  ................................       5,500,000       1,000,000
                                                   -----------------------------------------------------------------
          Totals..................................  ................................      54,500,000      60,000,000
                                                   =================================================================
          Grand Total.............................                                             $114,500,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ BERA's recommendations pertain only to the biomass-based portion of Hydrogen Technology.
    \2\ BERA's recommendations for the Biomass and Bioproducts Initiative are expected to be used for research and
      scale-up as indicated, but are not allocated by program area in this table.
    \3\ The McNeil Gasification Project in Burlington, VT and the Regional Biomass Energy Program have been zeroed-
      out of EERE's fiscal year 2004 budget. BERA strongly urges that they be restored and continued (see Systems
      Integration/Production, Thermochemical Conversion, and Regional Biomass Energy Program sections in text).

    Advanced Biomass Technology
        Thermochemical Conversion.--Continued R&D to develop advanced
    biomass combustion and gasification methods could have environmental
    and economic benefits that can lead to significant growth in low-cost
    power generation from waste biomass and the disposal of certain kinds
    of high-moisture waste biomass such as biosolids (municipal sewage),
    which are very costly to treat and dispose of. Most of this research
    has been phased out by DOE. Research (not scale-up) should be initiated
    or restored with the goal of developing the next generation of
    thermochemical biomass conversion processes for power generation and
    the utilization of high-moisture biomass for combined disposal-power
    generation applications.
        The pyrolysis of biomass, or its thermal decomposition in the
    absence of oxygen, yields a large number of gaseous, liquid, and solid
    products. Hardwood feedstocks were used commercially until the 1930's
    to manufacture fuel gases, solvents, chemicals, fuel oils, and
    charcoal. Because of the steadily increasing prices of natural gas and
    petroleum crude oils, a few small-scale commercial biomass pyrolysis
    systems have recently been installed and operated under conditions that
    increase product flexibility and selectivity to yield cost-competitive
    products. BERA recommends that exploratory research on biomass
    pyrolysis be added to EERE's program to help design advanced processes.
    All of the basic data compiled during DOE-funded research on biomass
    pyrolysis in the 1970's and 1980's should be reexamined in this work.
        Several thermochemical technologies are available for the
    liquefaction of biomass feedstocks to afford storable liquid fuels and
    chemicals. Included among these conversion methods is pyrolysis under
    certain conditions that maximize the yields of liquid products, the
    catalytic conversion of syngases from biomass to liquid chemicals such
    as ethanol and other oxygenates, catalytic hydrogenation of biomass and
    biomass derivatives such as natural oils for the direct production of
    liquid fuels, and biomass liquefaction under supercritical conditions
    of pressure and/or temperature. BERA recommends that thermochemical
    liquefaction of biomass be added to EERE's program to find and improve
    innovative conversion methods that have a high probability of leading
    to cost-effective, storable liquid fuels from biomass.
        Bioconversion.--The goal of simultaneous conversion of pentoses and
    hexoses from low-cost cellulosics to fermentation ethanol at high
    efficiencies on a commercial scale requires the use of special
    processes for producing genetically engineered organisms and cellulase
    systems at acceptable costs and performance. Research should continue
    to perfect these technologies for incorporation into the overall
    fermentation process designs to be used in the scale-up program for
    fermenting cellulosic feedstocks.
        Methane fermentation (anaerobic digestion) is unique in that it
    produces methane, the major component in natural gas, at high
    concentrations (medium-Btu gas) from a full range of virgin and waste
    biomass. DOE has terminated most of this research. Research can lead to
    advanced processes as well as the alleviation of numerous environmental
    problems encountered during waste treatment and disposal. This research
    should be restored.
        Bioconversion is useful for converting a variety of biomass and
    derivatives to a wide range of commodity and specialty organic
    chemicals and polymers. The use of selected microbial populations is in
    fact the only practical route to certain types of chemicals and
    polymers. An exploratory program to advance this technology is a
    natural adjunct to DOE's on-going biomass fermentation program. BERA
    recommends that part of the research effort under Advanced Biomass
    Technology focus on this field.
    Systems Integration and Production
        Biomass and Bioproducts Initiative (Crosscutting RD&D).--See pages
    1 and 2 of testimony.
        Thermochemical Conversion.--The availability of thermochemical
    biomass conversion processes for producing ethanol, mixed alcohols, and
    other oxygenates offers a range of non-microbial options for
    commercializing biomass liquefaction technologies. This should be one
    of the key components of EERE's program, but is minimal when compared
    with the efforts expended on fermentation ethanol over many years. The
    development of medium-Btu biomass gasification is also a key component
    for the production of fuels, power, and chemicals. However, funding for
    the commercial scale demonstration plant in Burlington, VT by DOE was
    ended in fiscal year 2003. This plant is capable of use as a multi-
    purpose development site for biomass gasification and related
    technologies. BERA recommends that both thermochemical liquefaction and
    gasification RD&D be expanded and continued by EERE. The existing plant
    in Vermont should be utilized to test advanced gas clean-up methods and
    advanced power generation systems.
        Small Modular Biopower.--Research on the development of small,
    biomass combustion turbines should be continued to develop advanced
    designs for small modular systems, and for cogeneration and distributed
    generation.
        Feedstock Infrastructure.--BERA recommends that DOE develop the
    infrastructure, while the Forest Service of the USDA initiates and
    continues RD&D on biomass production, particularly woody biomass.
        Bioconversion.--As reported last year, DOE's contributions to the
    costs of several fermentation ethanol plants have either been completed
    or are winding down. The processes used are conventional and advanced
    technologies, and a plant using corn stalk feedstocks was planned for
    the Midwest. BERA recommends that the existing scale-up projects should
    be completed, the results analyzed, and the technologies confirmed
    before other scale-up projects are started. Since corn continues to be
    the main feedstock for U.S. plants, it is vital to commercialize the
    use of low-cost cellulosic feedstocks to reduce the cost of
    fermentation ethanol. RD&D should focus on the information needed to
    facilitate scale-up and make this happen. Although much of it is in-
    hand now, critical information related to biomass transport, storage,
    and handling; feedstock characterization, pretreatment and hydrolysis;
    storage, maintenance, and use of genetically modified organisms and of
    active cellulase systems for pentose and hexose conversion; nutrient
    cost reductions, by-product recovery and utilization; and improved
    emissions, controls, and wastewater treatment, is still needed to
    design optimum low-cost processes that afford fermentation ethanol at
    competitive motor fuel prices. NREL's fermentation pilot plant and
    counter-current pretreatment pilot plant reactor installed in fiscal
    year 2000 should be fully utilized on a cost-shared basis with DOE's
    industrial partners to support the scale-up of processes operated with
    cellulosic feedstocks.
        Integrated Biorefinery Development.--This program component is
    expected to include the activities necessary to select and integrate
    all unit operations employed in the biorefinery and the biomass
    acquisition systems. This effort should address plant design, siting,
    financing, permitting, construction, environmental controls, waste
    processing and disposal, and sustained plant operations; feedstock
    selection, transport, storage, and delivery; all waste and emissions
    issues; and storage and delivery of all salable products. BERA
    recommends that industrial partners be carefully selected for
    participation in this cost-shared program at the beginning of each
    project. This work should be given the highest priority. Most of the
    funds for the BBI provided by Congress should be used for this effort.
    Long-range planning is essential to ensure that each project has a high
    probability of success and lays the groundwork for continued
    installation of similar systems by the private sector.
        Regional Biomass Energy Program.--The RBEP has been a
    legislatively-mandated model information and outreach program for
    almost 20 years. There is no other Federal program with the information
    transfer role, capabilities, leverage, experience, local-level
    presence, and widespread networks of the RBEP; nor is there a DOE
    program so closely affiliated with State and regional government
    organizations. Historically, RBEP's partners have provided between $2
    to $4 for every $1 of RBEP funds, making it one of the most cost-
    effective Federal programs. If DOE terminates this program, BERA
    recommends that it be transferred to and operated by the USDA, and that
    it continue to be managed by the government host organizations:
    Coalition of Northeast Governors, Southern States Energy Board, Council
    of Great Lakes Governors, and Western Governors Association, which
    provide direct links to the governors and legislators of each State.
    Hydrogen Technology
        Research on the thermal reforming of biomass and on splitting water
    with algae, which is the equivalent of photolysis, should be continued.
    In addition, innovative conversion methods such as the use of anaerobic
    digestion under ambient conditions and catalytic and non-catalytic
    thermochemical gasification under certain operating conditions that
    minimize methane formation while maximizing hydrogen formation should
    be studied. These technologies may lead to low-cost hydrogen production
    methods.
                                     ______

       Prepared Statement of the University Corporation for Atmospheric
                                    Research
        On behalf of the University Corporation for Atmospheric Research
    (UCAR) and the university community involved in weather and climate
    research and related education, training and support activities, I
    submit this written testimony for the record of the Senate Committee on
    Appropriations, Subcommittee on Energy and Water Development.
        UCAR is a consortium of 66 universities that manage and operate the
    National Center for Atmospheric Research (NCAR) and additional programs
    that support and extend the country's scientific research and education
    capabilities. The UCAR mission is to support, enhance, and extend the
    capabilities of the university community, nationally and
    internationally; to understand the behavior of the atmosphere and
    related systems and the global environment; and to foster the transfer
    of knowledge and technology for the betterment of life on earth. In
    addition to its member universities, UCAR has formal relationships with
    approximately 100 additional undergraduate and graduate schools
    including several historically black and minority-serving institutions,
    and 40 international universities and laboratories. UCAR is supported
    by the National Science Foundation (NSF) and other Federal agencies
    including the Department of Energy (DOE).
                             doe office of science
        The DOE is the third largest Federal sponsor of basic research and
    the largest supporter of research in the physical sciences. It supports
    more than 15,000 Ph.D. scientists, graduate students and post-doctoral
    researchers in universities and national laboratories. The programs and
    national user facilities of the agency's Office of Science are vital to
    the Nation's basic research investment across all disciplines in the
    natural and physical sciences. These yield both short-term benefits and
    future advances in environmental research, basic computing and physics
    research, energy supply, homeland security, and educational growth.
        Last month the Senate Committee on Energy and Natural Resources
    responded to the President's fiscal year 2004 request, and expressed
    its concern for DOE's Office of Science budget, and the trend of level
    or flat funding for programs within it. UCAR endorses the views of the
    Committee. The President's request for DOE's Office of Science is flat,
    and has remained level funded for a decade. Funding it at the request
    of $3.3 billion would be significantly less than the $3.6 billion
    recommended in H.R. 34, the Energy and Science Research Investment Act
    of 2003, a bipartisan bill supported by almost 40 House members.
        This request also falls short of the goal of the President's
    Council of Advisors on Science and Technology (PCAST), which
    recommended in its October 2002 report that the budget request begins
    bringing funding for the physical sciences into parity with that of the
    life sciences.
        In order to achieve parity, DOE's Office of Science should be
    funded at $3.6 billion, a level that will critically augment and
    reinvigorate the work of researchers throughout the Nation.
        Within the Office of Science, the Biological and Environmental
    Research (BER) program develops the knowledge necessary to identify,
    understand, and anticipate the potential health and environmental
    consequences of energy production and use. These are issues that are
    absolutely critical to our country's well-being and security. The BER
    program is of particular importance to the work of the atmospheric
    sciences community. Specifically, the Climate Change Research Program
    is dedicated to advancing very important climate work, including
    climate modeling, the atmospheric radiation measurement program, global
    change research, meteorological research. It also supports a mentoring
    program for a 4-year graduate and undergraduate program for minority
    students pursuing careers in the atmospheric and related sciences. The
    request for this program is decreased almost 6 percent from the fiscal
    year 2003 enacted level of $530 million. In following the
    recommendation made above for the Office of Science, it is critical
    BER's allocation be increased by 9 percent, for a total of $577.7
    million.
                   climate change research initiative (ccri)
        In fiscal year 2004, BER will continue to contribute to the
    Administration's Climate Change Research Initiative (CCRI) to deliver
    information useful to policy makers. The BER contribution to the CCRI
    will primarily be through focused research on the carbon cycle to
    further understand carbon dioxide emissions in relation to the North
    American carbon sink. BER will also contribute to the CCRI in other
    areas, including climate change modeling, atmospheric composition, and
    regional impacts of climate change. To make significant headway in
    these areas, it is very important the Committee support the fiscal year
    2004 request for CCRI, of $25.3 million.
                 advanced scientific computing research (ascr)
        DOE's ASCR provides advances in computer science and the
    development of specialized software tools that are necessary to
    research the major scientific question being addressed by the Office of
    Science. ASCR's continued progress is of particular importance to
    atmospheric scientists involved with complex climate model development,
    research that takes enormous amounts of computing power. By their very
    nature, problems dealing with the interaction of the earth's systems
    and global climate change cannot be solved by traditional laboratory
    approaches. Of particular importance to the U.S. National Assessment
    effort in global change is ASCR's critical contribution to the
    multiagency effort to develop the Coupled Parallel Climate Model (PCM)
    and its successor, the Community Climate System Model (version 2.0).
    The fiscal year 2004 request for ASCR is disappointing to the
    community, providing it with a 0.5 percent increase. In order to regain
    our international leadership in advanced computing, it is essential the
    Committee to provide a 9 percent increase for ASCR and fund it at $188
    million.
        On behalf of UCAR and the atmospheric sciences research community,
    I want to thank the Committee for the important work you do for U.S.
    scientific research. We appreciate your attention to the
    recommendations of our community concerning the fiscal year 2004 budget
    of the Department of Energy. We understand and appreciate that the
    Nation is undergoing significant budget pressures at this time, but a
    strong Nation in the future depends on the investments we make in
    science and technology today.
                                     ______

               Prepared Statement of the Nuclear Energy Institute
        On behalf of the nuclear energy industry, thank you for your
    support of nuclear technology-related programs in the Energy Department
    and your oversight of the Nuclear Regulatory Commission (NRC) for
    fiscal year 2003.
        The Nuclear Energy Institute is responsible for developing policy
    for the U.S. nuclear industry. NEI's 270 corporate and other members
    represent a broad spectrum of interests, including every U.S. energy
    company that operates a nuclear power plant. NEI's membership also
    includes nuclear fuel cycle companies, suppliers, engineering and
    consulting firms, national research laboratories, manufacturers of
    radiopharmaceuticals, universities, labor unions and law firms.
        America's 103 nuclear power plants are the safest, most efficient
    and reliable in the world. Nuclear energy is the largest source of
    emission-free electricity generation in the United States. Nuclear
    power plants in 31 States provide electricity for one of every five
    homes and businesses in the Nation, and the industry again last year
    reached record levels for efficiency and electricity production. It is
    essential that Congress adopt policies that foster the further
    development of this vital part of our Nation's energy mix--and fulfill
    existing Federal obligations, such as the commitment to manage used
    nuclear fuel.
        My statement for the record addresses three key points: (1)
    Congress should reclassify the Nuclear Waste Fund, reorienting it to
    its original purpose and ensuring adequate funding for the Yucca
    Mountain repository project; (2) research and development (R&D) on
    advanced nuclear technology should continue to maintain America's
    leadership role in commercial nuclear technologies; and (3) the Nuclear
    Regulatory Commission's (NRC) budget and staffing should be reassessed
    in light of current trends.
        I also will discuss briefly several important programs supported by
    the nuclear energy industry, including research into the health effects
    of low-level radiation.
               congress should reclassify the nuclear waste fund
        National policy clearly establishes the Federal Government's
    responsibility for deep geologic disposal of used nuclear fuel and the
    by-products of defense-related activities. In 1982, the Nuclear Waste
    Policy Act codified Federal policy for developing a repository for
    long-term stewardship of used nuclear fuel.
        President Bush last year approved Yucca Mountain as the site to
    develop a Federal repository and the decision was overwhelmingly upheld
    by the 107th Congress. I commend this committee for its leadership in
    supporting the Yucca Mountain resolution and the President's request
    for funding the program. The next step is for the Department of Energy
    (DOE) to submit an application to the Nuclear Regulatory Commission by
    December 2004 for a license to construct the repository.
        It is imperative that DOE meet its milestones for licensing, so the
    repository can be built and operating by 2010. This is consistent with
    our Nation's longstanding policy for responsible management of used
    nuclear fuel. It also honors the Federal Government's commitment to
    consumers--who, since 1983, have committed more than $22 billion for
    used nuclear fuel disposal. The Nuclear Waste Fund has a balance of
    more than $13 billion and is growing at a rate of about $1 billion
    annually, including interest. The funds collected from consumers of
    electricity from nuclear power plants specifically for used fuel
    management must be available for repository construction and operation.
           fund treatment diverts consumer money from original intent
        The Nuclear Waste Fund was established in 1982 as a separate
    account in the Federal treasury. However, congressional efforts to
    control deficit spending in the 1980's and 1990's changed the status of
    the fund. Appropriations from the fund, but not the receipts, were
    placed under a discretionary spending cap. The result is that the
    Nuclear Waste Fund is subject to appropriations caps and ``pay-as-you-
    go'' budget rules, even though the fund is self-financed. These rules
    expire on September 30, but the President's fiscal year 2004 budget
    proposed that they be continued for 2 more years.
        By the current approach, Congress must fund the used fuel programs
    within the confines of the discretionary spending allocation for the
    Energy and Waster Development Appropriations bill. As a result, Yucca
    Mountain funding consistently has been reduced below the level of
    receipts to provide increased funding in other, unrelated areas,
    despite the fact that receipts into the fund are specifically earmarked
    for the used nuclear fuel disposal program. In short, Congress's
    current budgetary process is taking consumer contributions to the
    Nuclear Waste Fund for use in funding unrelated programs.
        The industry urges Congress to reclassify the Nuclear Waste Fund
    this year to prevent future funding shortfalls for Yucca Mountain. This
    will help ensure that the government does not further delay meeting its
    legal obligation to remove used nuclear fuel from commercial nuclear
    plant sites. And it is the right thing to do with Americans' money.
               industry supports proposal to adjust spending cap
        The nuclear energy industry supports the administration's proposal
    to adjust the fund's discretionary spending cap. We have attached a
    policy brief that examines this issue. We encourage the committee to
    support the proposal. A more permanent solution is needed to ensure
    that funds collected for the waste program are allocated directly to
    the project based on annual project funding requirements and with
    continued congressional oversight.
        The industry strongly supports DOE's fiscal year 2004 funding
    request of $591 million for the Office of Civilian Radioactive Waste
    Management. We do not believe that the program will be able to meet the
    important milestone for submitting a license application to the NRC
    absent this level of funding for the program.
        We strongly urge restoration of funds not appropriated in fiscal
    year 2003 so that the program recovers from reductions in scientific
    study and licensing activities at the lower funding level of $460
    million. Increased funding is necessary for DOE to file a license
    application to the NRC in 2004. In additional, funding for other
    critical activities--such as transportation planning--is essential to
    DOE's ability to achieve the major milestones in the program.
        Although the repository program is the foundation of our national
    policy for managing used nuclear fuel, the nuclear industry also
    recognizes the value in researching emerging technology for used fuel
    treatment and management. Such farsighted R&D programs would allow our
    Nation to remain the world leader in nuclear technologies. However,
    technologies like transmutation--the conversion of used nuclear fuel
    into less toxic materials--still require a Federal repository for
    disposal of the radioactive by-products generated from the process.
              research and development must foster nuclear energy
        Nuclear energy is a secure, domestic source of electricity and
    plays a vital role in meeting national Clean Air Act requirements and
    voluntary greenhouse gas reduction programs. Last year, the industry's
    average capacity factor--a measure of efficiency--was 91.5 percent, and
    103 reactors generated a record 778 billion kilowatt-hours of
    electricity. Production costs are low and stable over many years.
        Nuclear energy is important today, and it will be even more
    important in the future, given rising electricity demand and the nexus
    between energy and environmental policy. For its part, the nuclear
    industry will continue to increase the amount of electricity generated
    by nuclear power by relicensing reactors, continuing to improve
    efficiency and implementing new technology to uprate, or boost the
    output from, current reactors.
        But in the near future, new nuclear power plants will be needed.
        The Energy Information Administration projects that demand for
    electricity will increase about 1.9 percent annually over the next two
    decades. To meet this increased demand, and replace outmoded fossil
    fuel-fired power plants, the United States will need to add more than
    327,000 megawatts of capacity--the equivalent of 36 mid-size (500-
    megawatt) power plants every year between now and 2020.\1\ Some of the
    new plants must be emission-free nuclear reactors.
    ---------------------------------------------------------------------------
        \1\ One-point-nine percent annual increase for 18 years (2003-2020)
    equals 327,300 megawatts increased demand equals about 18,000 megawatts
    per year equals 36 500-megawatt power plants per year.
    ---------------------------------------------------------------------------
        As other nations pursue new or expanded nuclear programs, continued
    R&D also is important for the United States to maintain energy
    diversity--one of the strengths of our electricity infrastructure--to
    expand nuclear energy's environmental benefits to our Nation, and to
    remain the world leader in applying this technology. U.S. leadership is
    necessary to ensure reliable operations and a significant export market
    for U.S. products. The industry supports increased fiscal year 2004
    funding for DOE nuclear energy R&D programs, especially the Nuclear
    Energy Technologies (NET) program, which promotes the development of
    new nuclear energy systems. Within this program, DOE includes Nuclear
    Power 2010, which will foster the construction and operation of new
    nuclear power plants by 2010 as one option to increase domestic
    electricity supply. Already, three companies have identified plant
    sites for potential new plants and are seeking to validate the NRC's
    early site permitting process.
        The nuclear energy industry urges the committee to approve at least
    $60 million for the NET program. Within the NET program, $35 million
    should be earmarked for the Nuclear Power 2010 effort and $20 million
    for R&D needed to bring innovative reactor concepts, known as
    Generation IV reactors, to the marketplace. NEI urges your support for
    a demonstration project for using new reactor designs at a national
    laboratory within the scope of the Generation IV reactor program. The
    industry also supports the National Climate Change Technology
    Initiative at $5 million.
        The Nuclear Energy Research Initiative (NERI)--which seeks to
    expand America's nuclear energy program for the 21st century--fills a
    vital need identified in a 1997 report by the President's Council of
    Advisors on Science and Technology (PCAST). PCAST recommended a
    competitive peer-reviewed R&D program to address potential barriers to
    increased nuclear energy use and to maintain America's nuclear science
    and technology leadership. PCAST also recommended an international
    cooperative program within NERI.
        The nuclear energy industry urges the committee to approve at least
    $32 million in fiscal year 2004 for the NERI program. Within that
    amount, NEI recommends $5 million for International NERI. Although
    current funding has been sufficient to continue projects initiated in
    previous fiscal years, DOE's fiscal year 2004 request reduces funding
    by half, thus restricting any new R&D projects.
        PCAST also recommended another R&D initiative--the Nuclear Energy
    Plant Optimization (NEPO) program--to generate more low-cost energy
    from America's existing nuclear power plants.
        The nuclear energy industry encourages the committee to allocate
    $10 million for the NEPO program, which seeks to improve already high
    efficiency and reliability at U.S. nuclear power plants. This public-
    private partnership is helping to facilitate America's economic growth
    and improving our Nation's air quality. NEPO received $5 million in
    fiscal year 2003--$5 million less than the PCAST recommendation. DOE
    has proposed no funding for the program in fiscal year 2004.
        The industry also requests $26.5 million for DOE's University
    Support Program, which supports vital research and educational programs
    in nuclear science at the Nation's colleges and universities. With
    nuclear plant relicensing and plans for new plants, demand for highly
    educated and trained professionals will continue.
        NEI encourages the committee to consider a new $2 million program
    within the Office of Nuclear Energy to support universities that have
    undergraduate and graduate programs in health physics. The industry's
    most recent survey of human resources revealed that health physics
    professionals are declining in numbers and the need will become acute
    in the next few years when many will retire. This critical resource
    will be necessary to support the industry, government programs at DOE
    sites and national laboratories, NRC activities and homeland security
    programs to respond to potential dirty bomb threats.
        The administration has proposed including nuclear energy in the
    hydrogen fuel initiative. We believe hydrogen offers significant
    promise as a future energy technology. Nuclear energy is the best
    available technology for the large-scale production of hydrogen using
    electrolysis. A DOE program supporting both concepts should be
    supported in fiscal year 2004 at $12 million.
      nrc's budget and staffing should be reassessed in light of current
                                     trends
        Our Nation's focus on security has led to significant security
    enhancements at nuclear power plants. It is appropriate at this time
    for the NRC to review its budget and resource allocations in light of
    current demands and other resources available. For example, the NRC
    currently is budgeted for about 200 staff in its Nuclear Security and
    Incident Response organization. A significant portion of their work
    overlaps with responsibilities of the new Department of Homeland
    Security (DHS)--particularly in the areas of threat and vulnerability
    assessment. The NRC should carefully review its organizational
    structure as the DHS assumes a greater role in securing the Nation's
    energy infrastructure. This review should be completed before
    additional funding is authorized for NRC security-related activities.
        Since September 11, 2001, the nuclear energy industry has remained
    at a heightened level of alert. The defense-in-depth inherent in the
    robust design of our plants has been reassessed and augmented. During
    the past 18 months, our industry has invested an additional $370
    million in security-related improvements, including fortified perimeter
    security; improved background checks; and tighter access control at our
    plants. As part of this effort, the nuclear energy industry has added
    about one-third more security officers, for a total of 7,000 well-
    trained, armed security officers at our 67 nuclear power plant sites.
    The industry will continue to make these investments and improvements
    to enhance private industry's best security program.
        Our Nation's 103 nuclear power reactors are operating at very high
    levels of safety and reliability. In fact, nearly 75 percent of the
    reactors have the NRC's highest safety performance indicator in all
    categories, and most of the others have only a single indicator in the
    next lower level. The excellent safety record of U.S. nuclear power
    plants lays the groundwork for refining regulatory oversight based on
    performance and safety insights. Additionally, insights from the
    reactor oversight process indicate that several major regulations for
    power reactors are not providing a significant safety value. A
    disciplined review of the regulations should be undertaken to eliminate
    or modify outdated requirements.
        The industry commends the Appropriations Committee for reducing the
    nuclear industry user fee assessments for NRC activities that are
    unrelated to regulation of the industry. The proportion of the NRC's
    budget derived from user fees will continue to decrease by 2 percent
    each year through 2005. In that year, licensees will support 90 percent
    of the NRC's budget, which will not include activities that are not
    directly related to regulating the industry.
        In addition, the industry supports an evaluation reviewing the
    scope and content of inspection programs; eliminating research efforts
    of questionable value, such as studies of human performance and
    organizational effectiveness; and streamlining the differing
    professional opinion process to improve its effectiveness, while
    minimizing its impact on issue resolution and the use of management
    resources.
                   industry support for additional activities
        Nuclear Nonproliferation.--The industry supports the disposal of
    excess weapons grade nuclear materials through the use of mixed-oxide
    fuel in reactors in the United States and Russia.
        Low-Dose Radiation Health Effects Research.--The industry strongly
    supports continued funding for the DOE's low-dose radiation research
    program. This program will provide a better understanding of low-dose
    radiation effects to ensure that public and private resources are
    applied in a manner that protects public health and safety without
    imposing unacceptable risks or unreasonable costs on society.
        Nuclear Research Facilities.--The industry is concerned with the
    declining number of nuclear research facilities. We urge the committee
    to request that DOE provide it with a long-term plan for using existing
    nuclear research facilities as well as for the development of new
    research facilities.
        Uranium Facility Decontamination and Decommissioning.--The industry
    fully supports cleanup of the gaseous diffusion plants at Paducah, KY;
    Portsmouth, OH; and Oak Ridge, TN. Each year, commercial nuclear power
    plants contribute more than $150 million to the government-managed
    uranium enrichment plant Decontamination and Decommissioning Fund. NEI
    urges the committee to ensure that these monies are spent on
    decontamination and decommissioning activities at these facilities.
    Other important environmental, safety and/or health activities at these
    facilities should be paid for out of general revenues.
        International Nuclear Safety Program and Nuclear Energy Agency.--
    NEI supports the funding requested for the international nuclear safety
    programs of both the DOE and NRC. They are programs aimed at improving
    the safe commercial use of nuclear energy worldwide.
        Medical Isotopes Infrastructure.--The nuclear industry supports the
    administration's program for the production of medical and research
    isotopes.
                                     ______

              Prepared Statement of The American Chemical Society
        The American Chemical Society (ACS) would like to thank Chairman
    Pete Domenici and Ranking Member Harry Reid for the opportunity to
    submit testimony for the record on the Energy and Water Development
    Appropriations bill for fiscal year 2004.
        ACS is a non-profit scientific and educational organization,
    chartered by Congress, representing more than 160,000 individual
    chemical scientists and engineers. The world's largest scientific
    society, ACS advances the chemical enterprise, increases public
    understanding of chemistry, and brings its expertise to bear on State
    and national matters.
        As Congress and the administration seek to bolster the economy,
    economists agree that investments in basic research boost long-term
    economic growth more than other areas of Federal spending. These
    investments foster the new technologies and trained scientific
    workforce that drive the Nation's public health, defense, energy
    security, and environmental progress. Although industry funds the bulk
    of national R&D, the Federal Government provides 60 percent of basic
    research funding and, remarkably, 40 percent of patents cite Federal
    research as their source. Yet Federal research in the physical sciences
    and engineering has been cut in half since 1970 as a percentage of GDP.
    Fortunately, the President's top science and technology advisory
    council, the House and Senate Appropriations Committees, and the Hart-
    Rudman Commission on National Security have all recognized the need to
    boost investment in physical sciences and engineering research. This
    investment has never been more important given its central role in
    advancing the Nation's economic, energy, and homeland security.
                           acs budget recommendations
        Current Federal efforts to advance energy efficiency, production,
    and new energy sources while reducing air pollution and other
    environmental impacts will demand increased investment in long-term
    energy research. By supporting people, research, and world-class
    science and engineering facilities, the Department of Energy's Office
    of Science expands the frontiers of science in areas critical to DOE's
    energy, environment, and national security missions. Unfortunately, the
    administration's budget request would continue the shrinking investment
    in basic energy research at DOE in recent years, which must be reversed
    to meet these national goals. ACS recommends a budget of $3.6 billion
    for DOE's Office of Science in fiscal year 2004, a 10 percent increase
    over fiscal year 2003.
        Increases will help reverse the declining Federal support for the
    physical sciences and to encourage more students to pursue degrees in
    these fields. The Office of Science is the largest Federal supporter of
    research in the physical sciences, funding almost 40 percent of
    research in these fields. In view of the emphasis placed on the
    physical sciences in the fiscal year 2004 budget, ACS is disappointed
    that this vital office did not receive adequate support.
        The Office of Science fosters the new discoveries and technical
    talent that will continue to be essential to advances in coal,
    hydrogen, biomass, genomics, and many other technology areas.
    Additional funds should be directed to increase the number of grants,
    especially in core energy programs, and to improve research facilities.
    The Office is the primary source of Federal support in many research
    areas essential to our energy security and economy, such as catalysis,
    carbon cycle research, photovoltaics, combustion, and advanced
    computing. Increased investment is also important given the declining
    private support for long-term energy research.
                        increase grants in core programs
        ACS recommends that increases for the Office of Science be directed
    to advancing core energy research across disciplines, which enables DOE
    to respond rapidly to new challenges. For example, DOE capitalized on
    long-term atmospheric chemistry research, particularly in aerosols, and
    quickly developed a single anthrax-bacterium detector. DOE must
    strengthen its ability to attract scientists and train the next
    generation of scientists and engineers by increasing the number of
    grants in its core programs without reducing their size and duration.
    Current appropriations allow the DOE Office of Science to fund only 10
    percent of the unsolicited, peer-reviewed proposals it receives
    annually. This rate is considerably lower than those of other agencies
    and amounts to lost opportunities for both significant discoveries and
    the education of the next generation of scientists and engineers.
        Within the Office of Science, ACS particularly supports the Basic
    Energy Sciences and Biological and Environmental Research programs. As
    the cornerstone of the Office, the Basic Energy Sciences (BES) program
    supports an array of long-term basic research to improve energy
    production and use and reduce the environmental impact of those
    activities. The BES program manages almost all of DOE's scientific
    user-facilities, and provides leading support for nanotechnology and
    advanced computing research--two priority research areas that will have
    important implications for energy efficiency and security. The
    Biological and Environmental Research (BER) program advances
    fundamental understanding in fields such as waste processing,
    bioremediation, and atmospheric chemistry to better understand
    potential long-term health and environmental effects of energy
    production and use and identify opportunities to prevent pollution.
    Progress in these fields is also needed to develop and advance new,
    effective, and efficient processes for the remediation and restoration
    of DOE weapons production sites. ACS supports a strong role for DOE in
    Federal efforts to advance pollution prevention and climate change
    research.
                        doe and the scientific workforce
        As the largest supporter of research in the physical sciences, DOE
    can greatly affect the training and number of scientists in industry,
    government and academia. Inadequate investment in any research field
    constricts the supply of trained scientists and engineers who apply
    research and develop new technology. For instance, declining support
    for nuclear science and engineering will greatly affect the nuclear
    sector as a majority of today's nuclear scientists and engineers near
    retirement. Another example is the synergistic relationship between the
    need for radiochemists and NIH's ability to conduct clinical trials.
    Advances in diagnosis and treatment in nuclear medicine are dependent
    on the synthesis of highly specific radiopharmaceuticals that target
    biological processes in normal and diseased tissues. The Office of
    Science, through BER supported research, occupies a critical place in
    the field of radiopharmaceutical research. The NIH relies on the Office
    of Science's basic research to enable clinical trials.
        Another way for DOE to help attract students and retain talented
    scientists and engineers is to renew its investment in scientific
    infrastructure. The Office of Science effectively operates one of the
    most extensive and remarkable collection of scientific user facilities
    in the world, which provide tools for the research of more than 15,000
    scientists funded by DOE, other Federal agencies, and industry. Many
    facilities are in poor condition or have outmoded instrumentation.
    Additional funding would allow for increased operating time, upgrades,
    instrumentation, and technical support. More complete utilization of
    DOE's facilities would increase the return on investment and maximize
    their scientific contributions and educational value.
        National laboratories also play an important role in providing
    research and training opportunities to enhance the university
    curriculum. ACS supports the initial plan by DOE to utilize its
    national laboratories to help mentor and train science teachers.
    Students at all levels clearly learn better when their teachers have a
    deep understanding of the subject, and the first-rate multidisciplinary
    research and scientific professionals at the national laboratories
    certainly could be a rich resource for science and math teachers. We
    are concerned, however, that increases for this new initiative will
    come at the expense of more fundamental programs and thus urge that new
    funding be provided. ACS also urges stronger coordination among
    agencies with significant K-12 math and science programs in order to
    maximize the Federal investment in this area.
                                     ______

        Prepared Statement of Southeastern Federal Power Customers, Inc.
        Mr. Chairman and Members of the subcommittee, on behalf of the
    Southeastern Federal Power Customers' (``SeFPC''), I am pleased to
    provide testimony in reference to the administration's fiscal year 2004
    budget request for the Department of Energy and related Federal Power
    Marketing Administrations (``PMAs''). My testimony will focus primarily
    on the budget request for the Southeastern Power Administration
    (``SEPA''). Among other issues, we wish to emphasize that the proposed
    changes in SEPA's Puchased Power and Wheeling (``PP&W'') budget would
    have a negative impact on Federal preference power customers throughout
    the Southeast.
        SEPA purchases, transmits, and markets the power generated at
    Federal reservoirs to municipal systems, rural electric cooperatives,
    and other wholesale customers throughout the Southeast. The SeFPC has
    enjoyed a long and successful relationship with SEPA that has greatly
    benefited the approximately 5.8 million customers that are SeFPC
    members. As the subcommittee is aware SEPA markets the energy and
    capacity that is generated from the Federal reservoir projects in the
    Southeast. The SeFPC represents some 238 rural cooperatives and
    municipally owned electric systems in the States of Alabama, Georgia,
    Mississippi, Kentucky, North Carolina, South Carolina, Florida,
    Virginia, and West Virginia, which purchase power from SEPA. In some
    cases, SEPA supplies as much as 25 percent of the power and 10 percent
    of the energy needs of SeFPC customers.
      administration's proposal to phase out purchased power and wheeling
        The administration has proposed significant reductions in PP&W
    funding for SEPA and the other PMAs in fiscal year 2004 and has
    recommended the elimination of all Federal funding for PP&W by the end
    of 2004. The President's proposal would reduce PP&W funding for SEPA by
    over 55 percent in the upcoming fiscal year, from the current level of
    $34.5 million to the proposed level of $15 million. This proposal is
    very troubling to the SeFPC. The failure to fund these important
    programs under SEPA's jurisdiction could have dire consequences for the
    Federal power program in the Southeast and Federal preference power
    generally.
        If the President's proposal becomes law, the power supply for the
    not-for-profit distributors and their customers throughout the
    Southeast will be severely disrupted. SEPA's customers also will likely
    lose the benefits of long-term contractual arrangements for
    transmission and purchased power. Because SEPA does not own its own
    transmission lines, the loss of PP&W appropriations will force us to
    arrange our own transmission services, including delivery services from
    SEPA projects. Also, elimination of SEPA's purchased power funds will
    force us to buy our power from sources other than SEPA at higher
    prices, which will be passed directly to our customers.
        It is important to note that the President's proposal would yield
    no cost savings for the Federal Government. The use of PP&W revenues is
    a discretionary function with no budgetary impact. PP&W funds are
    repaid annually by preference customers.
        Thank you in advance for considering our comments on the
    President's proposed fiscal year 2004 budget for SEPA.
                                     ______

          Prepared Statement of the American Museum of Natural History
                  about the american museum of natural history
        The American Museum of Natural History (AMNH) is one of the
    Nation's preeminent institutions for scientific research and public
    education. Since its founding in 1869, the Museum has pursued its
    mission to ``discover, interpret, and disseminate--through scientific
    research and education--knowledge about human cultures, the natural
    world, and the universe.'' It is renowned for its exhibitions and
    collections of more than 32 million specimens and cultural artifacts.
    With nearly 4 million annual visitors--approximately half of them
    children--its audience is one of the largest and most diverse of any
    museum in the country. Museum scientists conduct groundbreaking
    research in fields ranging from all branches of zoology, comparative
    genomics, and bioinformatics to earth, space, and environmental
    sciences and biodiversity conservation. Their work forms the basis for
    all the Museum's activities that seek to explain complex issues and
    help people to understand the events and processes that created and
    continue to shape the Earth, life and civilization on this planet, and
    the universe beyond.
        Today more than 200 Museum scientists with internationally
    recognized expertise, led by 46 curators, conduct laboratory and
    collections-based research programs as well as fieldwork and training.
    Scientists in five divisions (Anthropology; Earth, Planetary, and Space
    Sciences; Invertebrate Zoology; Paleontology; and Vertebrate Zoology)
    are sequencing DNA and creating new computational tools to retrace the
    evolutionary tree, documenting changes in the environment, making new
    discoveries in the fossil record, and describing human culture in all
    its variety. The Museum also conducts graduate training programs in
    conjunction with a host of distinguished universities, supports
    doctoral and postdoctoral scientists with highly competitive research
    fellowships, and offers talented undergraduates an opportunity to work
    with Museum scientists.
        The AMNH collections of some 32 million natural specimens and
    cultural artifacts are a major scientific resource for Museum
    scientists as well as for more than 250 national and international
    visiting scientists each year. They often include endangered and
    extinct species as well as many of the only known ``type specimens,''
    or examples of species by which all other finds are compared. Within
    the collections are many spectacular individual collections, including
    the world's most comprehensive collections of dinosaurs, fossil
    mammals, Northwest Coast and Siberian cultural artifacts, North
    American butterflies, spiders, Australian and Chinese amphibians,
    reptiles, fishes, and one of the world's most important bird
    collections. The Museum has also established a super-cold storage
    facility, described below, for collection of tissue samples with
    preserved DNA for genomics research. Collections such as these are
    historical libraries of expertly identified and documented examples of
    species and artifacts, providing an irreplaceable record of life on
    earth.
        Permanent and temporary exhibits--from the Rose Center for Earth
    and Space to The Genomic Revolution, discussed below--are among the
    Museum's most potent educational tools, interpreting the work of Museum
    scientists, highlighting its collections, addressing relevant
    scientific and cultural issues, and presenting cutting edge content in
    a way that is accessible to all ages, learning levels, and backgrounds.
    The Education Department builds these exhibitions, as well as the
    Museum's unique resources, to offer rich programming dedicated to
    increasing scientific literacy, to encouraging students to pursue
    science and museum careers, and to providing a forum for exploring the
    world's cultures. These programs attract more than 400,000 students and
    teachers on school visits and more than 5,000 teachers for special
    professional development opportunities. The Museum is also reaching
    beyond its walls: through its National Center for Science Literacy,
    Education, and Technology, launched in 1997 in partnership with NASA,
    it is exploiting new technologies to bring materials, and programs into
    homes, schools, museums, and community organizations around the Nation.
           support for department of energy science mission and goals
        As one of the world's preeminent science organizations, DOE's
    primary strategic goals include maintaining a world class scientific
    research capability and enhancing homeland defense. Its leading science
    program supports fundamental research in energy, matter, and the basic
    forces of nature and the advanced computational and networking tools
    critical to research. The American Museum shares DOE's fundamental
    commitments to cutting-edge research and technology in support of
    science and education, and it seeks, in concert with DOE, to leverage
    complementary resources and to advance our many shared science goals.
    Genomic Science
        DOE is a leader in genomics research, advanced sequencing
    technologies, and instrumentation. With the historic completion of the
    first draft of the human genome, its work on the frontiers of genome
    science continues, including research in energy-related biology,
    comparative genomics, organisms' responses to biological and
    environmental cues, and experimental and computational approaches to
    predictive understanding of microbes and microbial communities.
    Genomics research remains critically important to the DOE mission, not
    only by helping to protect against bio-terrorism but also by
    contributing to the broad goal of developing ``a fundamental,
    comprehensive, and systematic understanding of life.''
        The American Museum is deeply engaged in genome research closely
    tied to DOE's mission areas and research priorities. It is home of one
    of the world's largest natural history collections, a preeminent
    molecular research program, and singular research resources in frozen
    tissue samples and cluster computing. In the era of genomics, museum
    collections have become critical baseline resources for the assessment
    of genetic diversity of natural populations; studying genomic data in a
    natural history context makes it possible to more fully understand the
    impacts of new discoveries in genomics and molecular biology. Genomes
    of the simplest organisms provide a window into the fundamental
    mechanics of life, and understanding their natural capabilities can
    help solve challenges in biodefense, medicine and health care, energy
    supply, and environmental cleanup.
    Frozen Tissue Collection
        In support of its molecular program, the Museum has launched an
    expansion of its collections to include biological tissues and isolated
    DNA preserved in a super-cold storage facility. Because this collection
    preserves genetic material and gene products from rare and endangered
    organisms that may become extinct before science fully exploits their
    potential, it is an invaluable resource for research in many fields
    including genetics, comparative genomics, and biodefense. Capable of
    housing 1 million specimens, it will be the largest super-cold tissue
    collection of its kind. In the past 2 years, 15,000 specimens not
    available at any other institute or facility have already accessioned.
    At the same time, the Museum is pioneering the development of
    collection and storage protocols for such collections. To maximize use
    and utility of the facility for researchers worldwide, the Museum is
    also developing a sophisticated website and online database that
    includes collection information and digitized images.
    Cluster Computing
        DOE science programs are committed to ``providing extraordinary
    tools for extraordinary science.'' The Museum, too, is a leader in
    developing computational tools, as parallel computing is an essential
    enabling technology for phylogenetic (evolutionary) analysis and
    intensive, efficient sampling of a wide array of study organisms.
    Museum scientists have constructed an in-house 560-processor computing
    cluster, and are in the process of upgrading it to 128 dual CPU nodes
    with 2 Gb/sec Myrinet interconnections. It is the fastest parallel
    computing cluster in an evolutionary biology laboratory and one of the
    fastest installed in a non-defense environment.
        Over the past 9 years, Museum scientists have taken a leadership
    role in developing and applying new computational approaches to
    deciphering evolutionary relationships through time and across species;
    their pioneering efforts in cluster computing, algorithm development,
    and evolutionary theory have been widely recognized and commended for
    their broad applicability for biology as a whole. The bioinformatics
    tools Museum scientists are creating will not only help to generate
    evolutionary scenarios, but also will inform and make more efficient
    large genome sequencing efforts. Many of the parallel algorithms and
    implementations (especially cluster-based) will be applicable in other
    informatics contexts such as annotation and assembly, breakpoint
    analysis, and non-genomic areas of evolutionary biology as well as in
    other disciplines.
    Institute of Comparative Genomics
        Building on its strengths in comparative genomics, and in concert
    with the scientific goals of DOE, the Museum has established an
    Institute for Comparative Genomics so as to contribute its unique
    resources and expertise to the Nation's genomic research enterprise.
    Equipped with its molecular labs with DNA sequencers, vast biological
    collections, researchers with expertise in the methods of comparative
    biology, and the parallel computing facility and frozen tissue
    collection described above, the Institute is positioned to be one of
    the world's premier research facilities for mapping the genome across a
    comprehensive spectrum of life forms.
        The Institute has already established a record of significant
    research achievements, which include obtaining a patent for innovative
    approach to analyzing microarray data that will facilitate improved
    diagnoses of diseases such as cancer and development of drugs to treat
    such diseases, developing computational techniques to analyze
    chromosomal sequence data, and winning grants to lead international
    research teams in assembling the ``tree of life.'' In partnership with
    the Department of Energy, with the support of a fiscal year 2002
    appropriation, Dr. Rob DeSalle is conducting research that is making
    notable progress in advancing understanding of bacterial genomics and
    the evolution of pathogenicity.
        These accomplishments are complemented by the Museum's ambitious
    agenda of genomics-related exhibitions, conferences, and public
    education programming, including the landmark exhibition, The Genomic
    Revolution in 2001. The exhibition, attended by approximately 500,000
    visitors and now touring nationally, examines the revolution taking
    place in molecular biology and its impact on modern science and
    technology, natural history, biodiversity, and our everyday lives. We
    have also hosted several international conferences on important
    genomics topics: Sequencing the Human Genome: New Frontiers in Science
    and Technology, in Fall 2000; Conservation Genetics in the Age of
    Genomics in Spring 2001; New Directions in Cluster Computing in June
    2001; and in 2002, an international meeting to examine current
    knowledge of life's history, Assembling the Tree of Life: Science,
    Relevance, and Challenges.
        As it moves forward, the Institute, working in cooperation with New
    York's outstanding biomedical research and educational institutions, is
    focusing on molecular and microbial systematics, on expanding our
    understanding of the evolution of life on earth and the evolution of
    critical organismal form and function through analysis of the genomes
    of selected microbes and other non-human organisms, and on constructing
    large genomic databases. Development of Institute activities will
    entail expanding expertise in microbial systematics and the molecular
    laboratory program that now trains dozens of graduate students every
    year; utilizing the latest sequencing technologies; employing parallel
    computing applications that allow scientists to solve combinatorially
    complex problems involving large real world datasets; and developing of
    K-12 curriculum materials, scientific conferences, and public exhibits.
        The interests and expertise of DOE and the Museum intersect in
    particular in these areas of comparative and microbial genomics. One of
    the goals of DOE's Human Genome Project is to learn about the relevance
    to humans of nonhuman organisms' DNA sequences. DOE science also
    targets an area in which the Museum is expanding its expertise--
    microbial genomics, the study of organisms that have survived and
    thrived in extreme and inhospitable environments. DOE's Genomes to Life
    and microbial genome programs are based on the understanding that
    genomes, especially those of the simplest organisms, provide a window
    into the fundamental mechanics of life. The Genomes to Life program is
    also committed to developing the computational tools to integrate data,
    to understand data, and to model complex biological systems. The
    Institute's programs in comparative and microbial genomics and
    computation could provide vital advances in these endeavors and support
    DOE's biological and environmental research function (the BER account).
        We seek $5 million for support of the Institute of Comparative
    Genomics to partner with DOE and to contribute its unique capacities to
    advancing shared priority areas of genomic science. The Institute
    supports DOE's biological and environmental research function (the BER
    account); and its diverse strengths and unique resources in comparative
    genomics will help to further DOE's goals for building a scientific
    research capacity to enable advances and discoveries in DOE science
    through world-class research. In addition, further development of the
    Museum's super-cold tissue collection will increase enormously the
    possibilities for DNA research and provide an invaluable international
    scientific resource. Our online collection database will ensure public
    access to genomics information, furthering DOE's own goals for
    fostering public understanding of human genomics and the fundamental
    building blocks of life. The Museum intends to support the Institute
    with funds from non-Federal as well as Federal sources and proposes to
    use the requested $5 million towards overall costs for the Institute's
    microbial genomics research program, including expansion and renovation
    of the molecular laboratories to accommodate additional investigators
    and students, research instrumentation, and scientific outreach and
    dissemination (website, online databases).
                                     ______

     Prepared Statement of the University of Medicine and Dentistry of New
                                     Jersey
        The following is the testimony of the University of Medicine and
    Dentistry of New Jersey (UMDNJ), the largest freestanding public
    university of the health sciences in the Nation. The University is
    located on five statewide campuses and contains three medical schools,
    and schools of dentistry, nursing, health related professions, public
    health and graduate biomedical sciences. UMDNJ also comprises a
    University-owned acute care hospital, three core teaching hospitals, an
    integrated behavioral health care delivery system, a statewide system
    for managed care and affiliations with more than 200 health care and
    educational institutions statewide.
        We appreciate the opportunity to bring to your attention our
    priority projects that are consistent with the biomedical research
    mission of the Department of Energy. These projects are statewide in
    scope and include collaborations both within the University system and
    with our affiliates.
        Our first priority is the development of the Child Health Institute
    of New Jersey at the UMDNJ-Robert Wood Johnson Medical School (RWJMS)
    in New Brunswick. As part of the State's public higher education
    system, the medical school encompasses 21 basic science and clinical
    departments and integrates diverse clinical programs conducted at 34
    hospital affiliates and numerous ambulatory care sites in the region.
    RWJMS ranks among the top one-third of medical schools in the Nation in
    terms of grant support per faculty member. It is home to The Cancer
    Institute of New Jersey, the only NCI-designated comprehensive cancer
    center in New Jersey; The Center for Advanced Biotechnology and
    Medicine; the Environmental and Occupational Health Sciences Institute,
    one of the leading environmental health programs in the country; and
    the Child Health Institute of New Jersey.
        The mission of the Child Health Institute is to build a
    comprehensive biomedical research center focused on the health and
    wellness of children. In this program, medical researchers direct
    efforts towards the prevention and cure of environmental and genetic
    diseases of infants and children at molecular and cellular levels.
        The Child Health Institute is integral to the long-term plan for
    the enhancement of research at UMDNJ-RWJMS in developmental genetics,
    particularly as it relates to disorders that affect a child's
    development and growth, physically and cognitively. The program will
    enable the medical school to expand and strengthen basic research
    efforts with clinical departments at the Robert Wood Johnson University
    Hospital (RWJUH) and, in particular, those involved with the new
    Children's Hospital at RWJUH especially Obstetrics, Pediatrics,
    Neurology, Surgery and Psychiatry. The construction of the Child Health
    Institute at RWJMS will fill a critical gap through the expansion, by
    new recruitment, of a intellectual base upon which basic molecular
    programs in child development and health will build.
        At the Child Health Institute, research will serve as the basis for
    new treatments, therapies and cures for such devastating and
    debilitating childhood syndromes as asthma, autism, diabetes, muscular
    dystrophy, birth defects and neuro-developmental disorders. Research
    will focus on the molecular and genetic mechanisms which direct the
    development of human form, subsequent growth, and acquisition of
    function. Broadly, the faculty and students will investigate disorders
    that occur during the process of development to discover and study the
    genes contributing to developmental disabilities and childhood
    diseases; to determine how genes and the environment interact to cause
    childhood diseases; and to identify the causes and possible avenues of
    treatment of cognitive disorders broadly found among conditions such as
    mental retardation, autism and related neurological disorders.
        Normal child development is a water dependent process, reflecting
    water quality, quantity and its ``management'' by cells and tissues.
    Access to uncontaminated water is at the base of the tree of life.
    Pollution of aquatic ecosystems poses a serious threat to the entire
    ecosystem and studying how a toxin affects embryonic development is
    central to understanding the risks pollutants represent, whether
    derived from pesticides, industrial run-off, acid rain or landfills. In
    multiple ways, the embryo is a sentinel for environmental toxins.
    Research at the Child Health Institute will focus on molecular
    mechanisms of early embryonic development, a natural, but vulnerable
    water-based environment.
        The Child Health Institute of New Jersey builds on existing
    significant strengths in genetic, environmental, and neurosciences
    research within the UMDNJ-RWJMS and associated joint programs with
    Rutgers University and other research institutes. For example, the
    Environmental and Occupational Health Sciences Institute (EOHSI) is a
    National Institute of Environmental Health Sciences (NIEHS) recognized
    center of excellence which investigates environmental influences on
    normal and disordered functions; the Cancer Institute of New Jersey
    (CINJ), a National Cancer Institute-designated Comprehensive Cancer
    Center, studies disordered cell growth; and the Center for Advanced
    Biotechnology and Medicine (CABM) characterizes gene structure and
    function.
        The CHI will act as a magnet for additional growth in research and
    healthcare program development in New Jersey. The Institute will
    encompass 150,000 gross square feet and will house more than 40
    research laboratories and associated support facilities. Fourteen
    senior faculty will direct teams of M.D. and Ph.D. researchers,
    visiting scientists, postdoctoral fellows, graduate students and
    technicians for a full complement of some 130 employees.
        Construction costs for the Institute are estimated to be
    approximately $72 million; approximately half of this figure is
    generally associated with local employment. At maturity, the Institute
    is expected to attract $7 to $9 million dollars of new research funding
    annually. The Institute's total annual operating budget is projected to
    be $10 to $12 million, with total economic impact on the New Brunswick
    area projected to be many times this amount.
        The Child Health Institute has assembled over $40 million to fund
    its building and programs through a strong partnership among private,
    corporate and government entitities. The support of the Congress has
    resulted in more than $6 million in directed appropriations for the CHI
    over the past 4 years, including appropriations from this committee in
    fiscal years 2001 and 2002. We respectfully seek $2 million to
    complement support already received in Federal participation to further
    advance the development of the Child Health Institute of New Jersey.
    Requested funding will be utilized for the purchase of analytical
    equipment, including laser scanning and photon microscopes, mass
    spectometer, and ventilated rack systems.
        Our second priority is the Dean and Betty Gallo Prostate Cancer
    Center (GPCC), established at the Cancer Institute of New Jersey (CINJ)
    with the goal of eradicating prostate cancer and improving the lives of
    men at risk for the disease through research, treatment, education and
    prevention. The Center was founded in memory of Rep. Dean Gallo, a New
    Jersey Congressman who died of prostate cancer diagnosed at an advanced
    stage.
        Prostate cancer is a devastating health problem in the Nation and
    in the State of New Jersey, which continues to experience one of the
    highest rate of cancer incidence and mortality. Prostate cancer is the
    most common form of cancer, other than skin cancer, among men in the
    United States and is second only to lung cancer as a cause of cancer-
    related death among men. The American Cancer Society estimates that
    189,000 new cases of prostate cancer will be diagnosed and
    approximately 30,200 men will die of the disease in 2002. Statistics
    released by the Centers for Disease Control in 2002 placed New Jersey
    fourth in the Nation for the rate or prostate cancer incidence.
        The GPCC unites a team of outstanding researchers and clinicians
    who are committed to high quality basic research, translation of
    innovative research to the clinic, exceptional patient care, and
    improving public education and awareness of prostate cancer. GPCC is a
    center of excellence of the Cancer Institute of New Jersey, which is
    the only NCI-designated comprehensive cancer center in the State. GPCC
    efforts are focused in four major areas: (1) Basic, Clinical and
    Translational Research; (2) Epidemiology and Cancer Control; (3)
    Comprehensive Patient Care; and (4) Education and Outreach.
        Basic, Clinical and Translational Research.--GPCC scientists are
    investigating the molecular, genetic and environmental factors that are
    responsible for prostate cancer initiation and progression. Appropriate
    model systems developed by Dr. Abate-Shen at the GPCC are being
    utilized to facilitate the design and implementation of novel
    strategies for prevention and treatment. GPCC is fostering multi-
    disciplinary efforts that will lead to the effective translation of
    basic research to improved patient care and novel clinical trials. The
    translational research program developed at the Gallo Prostate Cancer
    Center has been recognized at national scientific meetings such as
    those organized by the American Association for Clinical Research.
        Epidemiology and Cancer Control.--Additional research activities of
    the GPCC seek to understand the etiology of prostate cancer
    susceptibility and to find effective modalities for prevention of
    prostate cancer.
        Comprehensive Patient Care.--Exceptional patient care is provided
    through a multi-disciplinary patient care team in the areas of
    urological oncology, radiation oncology and medical oncology for each
    patient during all stages of the disease. Currently the Center has
    fourteen active clinical trials that provide our patients with novel
    clinical approaches for treating all stages of prostate cancer. Seventy
    patients were enrolled in clinical trials in 2002.
        Education and Outreach.--GPCC is continuing to educate the public
    throughout the State of New Jersey about the importance of early
    detection of prostate cancer, particularly in underserved communities
    where there is a population at high risk for the disease. The Gallo
    Center has developed an extensive network of partnerships with
    organizations such as the 100 Black Men of New Jersey, the Men's Health
    Network, the National Black Leadership Initiative on Cancer, and the
    Jewish Renaissance Foundation to offer prostate cancer screenings in
    minority and other underserved communities. The goal is to extend
    prostate cancer screening services to all 21 New Jersey counties by
    2004.
        To date, the Gallo Center has raised over $12.2 million in external
    public and private funding sources (including $3 million in support
    from this committee) to expand its research, cancer control and public
    outreach initiatives. The UMDNJ commitment to the overall development
    of The Cancer Institute of New Jersey and of the Gallo Center total
    over $83 million. This important funding has enabled us to establish a
    world-class program in prostate cancer research that includes
    publications in prestigious journals such as the New England Journal of
    Medicine, Genes and Development, Cancer, Cancer Research, and Clinical
    Cancer Research.
        Our fiscal year 2004 initiative is designed to support the further
    expansion of the Center's basic and clinical research initiatives,
    public outreach and cancer control efforts in both the Newark and north
    Jersey region, and the Camden/southern New Jersey region where we can
    increase the availability of cancer programs to the state's major
    population regions. Support of $3 million is sought to strengthen the
    Center's basic and clinical research programs. This additional funding
    will also allow us to enhance our treatment of patients with prostate
    cancer through several new clinical trials for patients at all stages
    of the disease. An additional level of funding support of $3 million is
    requested to expand the Center's public outreach and screening
    activities to reach vulnerable populations in the greater Newark and
    Camden communities and in other locations across the State.
        We thank this committee for its strong support of biomedical
    research and for the University's programs.
                                     ______

          Prepared Statement of the American Public Power Association
        The American Public Power Association (APPA) is the national
    service organization representing the interests of over 2,000 municipal
    and other State and locally owned utilities throughout the United
    States (all but Hawaii). Collectively, public power utilities deliver
    electricity to one of every seven electric consumers (about 40 million
    people), serving some of the Nation's largest cities. However, the vast
    majority of APPA's members serve communities with populations of 10,000
    people or less.
        We appreciate the opportunity to submit this statement outlining
    our fiscal year 2004 funding priorities within the Energy and Water
    Development Subcommittee's jurisdiction.
              renewable energy production incentive program (repi)
        The Department of Energy's REPI program was created in 1992's
    Energy Policy Act (EPAct) as a counterpart to the renewable energy
    production tax credits made available to for-profit utilities. EPAct
    authorizes the Department of Energy (DOE) to make direct payments to
    not-for-profit public power systems and rural electric cooperatives at
    the rate of 1.5 cents per kWh (now closer to 1.7 cents when adjusted
    for inflation) from electricity generated from solar, wind, geothermal
    and biomass projects. According to DOE sources, there is a backlog of
    close to $40 million in requests for REPI funding for 2003. Taking a
    step in the right direction, Congress appropriated $5 million for REPI
    for fiscal year 2003, a 25 percent increase over DOE's request of $4
    million for fiscal year 2003. Despite Congress' allocation and the
    demonstrated need, however, DOE has again asked for only $4 million for
    fiscal year 2004, citing budgetary constraints.
        Fully funding REPI is an issue of comparability for 25 percent of
    the utility sector and the communities these systems serve. For
    example, in 2000, for-profit utilities and private developers received
    about $58 million in renewable energy tax credits for wind power alone.
    The same year, REPI subscribers received only $3.99 million for
    renewable energy projects of all types. While APPA supports increasing
    renewable energy use throughout the utility sector, our member
    utilities simply must receive comparable federally sanctioned
    incentives to help in that effort.
        We believe Congress was committed 10 years ago to removing economic
    barriers to enable all communities to benefit from the production of
    more renewable and clean energy. We also believe that Congress is
    equally committed today--not only to producing more renewable energy,
    but also to diversifying America's portfolio of fuels, decreasing our
    reliance on foreign sources of energy, and reducing greenhouse gas
    emissions. In fact, under a fully funded REPI program, close to 60
    million metric tons of carbon equivalent could be reduced through the
    development existing landfills into landfill-gas-to-energy projects. In
    order to ensure that these efforts and other renewable energy goals are
    achievable throughout the electric utility industry, Congress must
    provide an increase for REPI.
                           renewable energy programs
        As is demonstrated by our strong support for REPI, APPA believes
    that investing in energy efficiency and renewable energy programs is
    critical. We urge the subcommittee to support adequate funding to
    ensure that renewable energy usage continues to increase as part of the
    portfolio of fuel options available to our Nation's electric utilities.
        We appreciate the subcommittee's recognition of the merits of these
    programs as demonstrated by its passage of a substantial increase over
    the President's fiscal year 2003 budget request. We encourage your
    continued support of these vital renewable energy programs.
                 federal power marketing administrations (pmas)
        APPA urges the subcommittee to increase the use of receipts for the
    Purchase Power and Wheeling (PP&W) programs of the Western Area Power
    Administration (WAPA), the Southeastern Power Administration (SEPA) and
    the Southwestern Power Administration (SWPA) in fiscal year 2004.
        The fiscal year 2004 budget proposes to drastically curtail the
    abilities of WAPA, SEPA, and SWPA to use receipts--which do not score--
    to provide these services to customers who cover these costs in their
    electric bills. Appropriations are no longer needed to initiate PP&W
    process, however, the subcommittee does establish ceilings on the use
    of receipts for this important function.
        The PP&W program is important because hydroelectric generation and
    customer use are rarely in exact balance--both vary from hour-to-hour
    and day-to-day. The PMAs often make purchases in the spot market to
    ``firm'' the resource when generation is less than the amount
    contracted for delivery. And, in low-water years, which have been all
    too frequent recently, the PMAs often purchase additional power to
    fulfill their contracts with customers. Wheeling is the charge that the
    PMAs pay to move electricity over a non-Federal transmission line. It
    also reduces the need to build additional Federal transmission
    facilities.
        Therefore, we request that the subcommittee authorize the use of
    receipts in fiscal year 2004 as follows:
      --Western Area Power Administration (WAPA): $186.1 million needed--
            includes $20 million recommended by OMB in the budget plus a
            $166.1 million authorization in the fiscal year 2004 bill.
      --Southeastern Power Administration (SEPA): $34.4 million needed--
            includes $15 million recommended by OMB plus $19.4 million
            authorization in the fiscal year 2004 bill.
      --Southwestern Power Administration (SWPA): $2.8 million needed--
            includes $288,000 recommended by OMB plus $2.6 million
            authorization in the fiscal year 2004 bill.
                      storage for high-level nuclear waste
        Since 1982, the Nation's electricity customers have committed $16.5
    billion to the Nuclear Waste Fund in order to finance centralized
    Federal management of spent nuclear fuel used for commercial purposes.
    We therefore support the administration's efforts to finalize the
    location of a permanent storage site at Yucca Mountain, Nevada, and we
    support its request of $591 million for Civilian Radioactive Waste
    Management in fiscal year 2004 to further this undertaking.
                      advanced hydropower turbine program
        APPA supports the administration's budget request of $7.5 million
    for the Advanced Hydropower Turbine Program for fiscal year 2004. This
    program is a joint industry-government cost-share effort to develop a
    hydroelectric turbine that will protect fish and other aquatic habitats
    while continuing to allow for the production of emissions free
    hydroelectric power.
        During the next 15 years, 220 hydroelectric projects will seek new
    licenses from the Federal Energy Regulatory Commission (FERC). Publicly
    owned projects constitute 50 percent of the total capacity that will be
    up for renewal. Many of these projects were originally licensed over 50
    years ago. Newly imposed licensing conditions can cost hydro project
    owners 10 to 15 percent of power generation. A new, improved turbine
    could help assure that any environmental conditions imposed at
    relicensing in the form of new conditioning, fish passages or reduced
    flows are not accomplished at the expense of emissions-free, renewable
    energy production. This is particularly important given the
    increasingly competitive market in which electric utilities operate
    today. Flow levels will affect the economics of each of these projects
    and many will be unable to compete if the current trend toward flow
    reduction continues.
                  federal energy regulatory commission (ferc)
        The Federal Energy Regulatory Commission (FERC) has requested
    $199.4 million for fiscal year 2004 for its overall operations. APPA
    supports this request. The FERC is charged with regulating certain
    interstate aspects of the natural gas, oil pipeline, hydropower, and
    electric utility industries. Such regulation includes issuing licenses
    and certificates for construction of facilities, approving rates,
    inspecting dams, implementing compliance and enforcement activities,
    and providing other services to regulated businesses. These businesses
    pay fees and charges that cover most of the cost of the government's
    operations.
                  navajo electrification demonstration program
        APPA supports full funding for the Navajo Electrification
    Demonstration Program at its $15 million authorized funding level for
    fiscal year 2004 and for each succeeding year of its authorization
    (through 2006). The purpose of the program is to provide electric power
    to the estimated 18,000 occupied structures in the Navajo Nation that
    lack electric power.
        The Navajo Nation is served by the Navajo Tribal Utility Authority
    (NTUA), an APPA member. NTUA provides electric, natural gas, water,
    wastewater treatment, and photovoltaic services throughout the Navajo
    Indian Reservations in the States of Arizona, New Mexico and Utah.
    Fully funding the Navajo Electrification Demonstration Program will
    significantly improve the quality of life for the people of the Navajo
    Nation.
                 national climate change technology initiative
        APPA supports the administration's efforts to promote greenhouse
    gas reductions through voluntary programs and investments in new
    technologies. We therefore support DOE's request of $15 million for
    fiscal year 2004 to spur innovation of technologies that will reduce,
    avoid, or capture greenhouse gas emissions.
                                     ______

        Prepared Statement of the University of Michigan, University of
     Tennessee, University of Texas, University of Florida, and University
                                 of New Mexico
                  research, education, and doe mission support
        The U.S. Department of Energy (DOE) has provided support to the DOE
    University Research Program in Robotics to pursue long range research
    leading to the ``development and deployment of advanced robotic systems
    capable of reducing human exposure to hazardous environments, and of
    performing a broad spectrum of tasks more safely and effectively than
    utilizing humans.''
        The DOE University Research Program in Robotics (URPR) has proven
    highly effective in technology innovation, education, and DOE mission
    support. The URPR has incorporated mission-oriented university research
    into DOE, and, through close collaboration with the DOE sites, provides
    an avenue for developing creative solutions to problems of vital
    importance to DOE.
        The URPR would like to thank the Committee members for their
    historically strong support of this successful program. Recognizing the
    shift in national priorities post-9/11/01, the URPR has begun to
    include new applications as the target for its technology development.
    Funding was equally split between EM and NNSA during fiscal year 2003.
    This enabled the completion of dedicated research for specific EM
    projects while integrating into the NNSA organization.
                           request for the committee
        We request that the Committee include language for the University
    Research Program in Robotics (URPR) research funds at its historic
    level of $4.35 million to continue developing safer, less expensive,
    and more capable robotic technology for NNSA applications.
              developing advanced robotics for doe and the nation
    Develop Robotic Solutions for Work in Potentially Hazardous
            Environments
        The goal of this program is to invent and utilize state-of-the-art
    robotic technology in order to remove humans from potentially hazardous
    environments and expedite remediation efforts considered essential.
    Established by DOE in fiscal year 1987 to support advanced nuclear
    reactor concepts, the project was moved to EM to support the higher
    priority needs in environmental restoration. Reflecting the change in
    national priorities post-9/11, the URPR began supporting NNSA
    applications during fiscal year 2003. The project has produced an
    impressive array of technological innovations, which have been
    incorporated into robotic solutions being employed across Federal and
    commercial sectors. This successful program demonstrates efficient
    technology innovation while educating tomorrow's technologists,
    inventing our country's intelligent machine systems technology of the
    next century, and meeting today's applied research needs for DOE.
        The URPR represents a DOE-sponsored consortium of five research
    universities (Florida, Michigan, New Mexico, Tennessee, and Texas) of
    long standing, working on the science of remote systems technologies to
    advance their effectiveness in performing physical tasks in hazardous
    environments associated with the DOE nuclear sites. The work of these
    universities is now widely recognized as some of the best in the field
    (the creation of spin-off companies, deployment requests from FEMA at
    Ground Zero, wins in national technology competitions, archival journal
    articles, etc.). Some of the focus technologies include innovative
    mobile platforms and their semi-autonomous navigation, kinesthetic
    input to teleoperation systems, simulation-based design and control,
    manipulation of unwieldy objects, machine vision and scene assessment
    for world modeling, improved radiation hardening of electronic
    components, and integration technology to assist in the assessment and
    deployment of complete solutions in the field. In addition to DOE
    specific applications, the team is increasingly able to deploy their
    technology for DOD applications (aircraft carrier weapon's elevator,
    anti-terrorism systems, submarine operations, etc.), for Homeland
    Security applications (surveillance and monitoring), for commercial
    applications (manufacturing, building construction, space) and for
    human augmentation and training (micro-surgery, rehabilitation of
    humans, reduction of drudgery). We constantly seek to explore strategic
    partnerships and utilize existing deployment resources to more rapidly
    export this technology to the DOE sites that could most benefit from
    this new technology.
    Making the Nation Safer
        In the aftermath of the 9/11 tragedy, our Nation has engaged in a
    long-term war to counter terrorism. The National Research Council
    recently [2002] published a thorough study of the role of science and
    technology in countering terrorism entitled Making the Nation Safer.
    This book represents the collective thoughts of 164 top scientists and
    engineers focusing on homeland security of the United States. It
    represents the combined output of the National Academy of Sciences, the
    National Academy of Engineering, the Institute of Medicine, and the
    National Research Council. It identifies urgent research opportunities.
    Of the seven cross-cutting technology challenges identified by the
    committee, autonomous mobile robotic technologies were highlighted.
    ``Continued development and use of robotic platforms will enable the
    deployment of mobile sensor networks for threat detection and
    intelligence collection. Robotic technologies can also assist humans
    and such activities as ordnance disposal, decontamination, debris
    removal, and firefighting.'' Robotic technologies, cited as a
    ``critical long-term research need,'' are featured throughout the
    individual chapters that address ways for mitigating our society's
    vulnerabilities to terrorism and responding to an attack.
        Our Nation's technology experts recommend: ``Agencies with
    experience in robotics, such as DARPA, should support research on all
    elements of robotic systems--including sensors, networks, and data
    communication and analysis. The aim would be to develop robots to
    assist in chemical (and biological or radiological) defense, thereby
    reducing hazards to humans and increasing the capabilities of defensive
    systems.'' [Rec. 4.8]
        In addition, the report identifies the need to sustain the Nation's
    scientific and engineering talent base and recommends [Rec. 13.4] a
    human resource development program to increase training in those fields
    consistent with the government's long-term priorities for homeland
    security research. The report exhorts that ``expanding the number of
    American scientists and engineers is particularly important.''
        And directly related to our work in radiation sensing and imaging
    is the recommendation [Rec. 2.6] ``A focused and coordinated near-term
    effort should be made by the Department of Energy, through its National
    Nuclear Security Administration, and by the Department of Defense,
    through its Defense Threat Reduction Agency, to evaluate and improve
    the efficacy of special nuclear material detection systems that could
    be deployed at strategic choke points for homeland defense.'' And [Rec
    2.7] ``Research and development support should be provided by the
    Department of Energy and Department of Defense for improving the
    technological capabilities of special nuclear material detection
    systems, especially for detecting highly enriched uranium.'' Our
    ongoing URPR research supports these tasks.
        In summary, the University Research Program in Robotics is a key
    player in executing the recommendations for making the Nation safer. We
    commend the enlightened vision of those who have historically
    recognized the importance of the URPR and supported this project.
                 innovation, education, and doe mission support
        The URPR's strategic mission is to make significant advances in our
    Nation's robotic and manufacturing technology base while emphasizing:
    education, technology innovation through basic R&D, and DOE mission
    support. The URPR has demonstrated that the advantages of operating as
    a consortium are significant. The institutions of the URPR partition
    the technical development into manageable sections which allow each
    university to concentrate within their area of expertise (efficiently
    maintaining world-class levels of excellence) while relying on their
    partners to supply supporting concentrations. With full support of the
    host universities, this effort naturally generated the in-depth human
    and equipment capital required by the DOE community. Practically, the
    long-term distributed interaction and planning among these universities
    in concert with the DOE labs and associated industry allows for
    effective technology development (with software and equipment
    compatibility and portability), for a vigorous and full response to
    application requirements (component technologies, system technologies,
    deployment issues, etc.), and for the supported application of the
    technology. Considering the remarkable achievements of URPR over its
    history, the URPR is in the ideal position to execute its prominent
    role in education, technology innovation, and DOE mission support.
    DOE Mission Contribution--Robotic Technologies
        Since its inception, DOE has promoted robotics as a necessary
    enabling technology to accomplish its mission. The motives for
    undertaking a comprehensive R&D effort in the application of advanced
    robotics to tasks in hazardous environments reflect economic
    considerations, efficiency, and health and safety concerns. The URPR is
    DOE's only needs-driven research program to develop new remote systems
    technologies to support the DOE thrust areas. In contrast, DOD, NIH,
    and NASA continue to prove the benefits of much larger mission-oriented
    robotics programs. During this difficult time of uncertainty, we need
    Congressional support to continue this very successful national program
    in technology innovation for advanced robotic systems.
    Program Request for the Committee
        During fiscal year 2003, the URPR provided vital contributions to
    education and research while addressing DOE technology needs. The
    motivation for this project remains steadfast--removing humans from
    hazardous environments while enhancing safety, reducing costs, and
    increasing response effectiveness. The URPR will begin supporting NNSA
    missions during fiscal year 2004. Thus, the DOE fiscal year 2004 budget
    submission could not include the URPR and Committee language is needed
    to continue the technology missions of the URPR at the fiscal year 2002
    and fiscal year 2003 level of $4.35 million.
                                     ______

      Prepared Statement of the California Government and Private Sector
    Coalition for Operation Clean Air's (OCA) Sustainable Incentive Program
        Mr. Chairman and Members of the Subcommittee, on behalf of the
    California Government and Private Sector Coalition for Operation Clean
    Air's (OCA) Sustainable Incentive Program, we are pleased to submit
    this statement for the record in support of our fiscal year 2004
    funding request of $7,000,000 for OCA as part of a Federal match for
    the $180 million already contributed by California State and local
    agencies and the private sector for incentive programs. This request
    consists of $5,000,000 from the Department of Energy (DOE) for biomass
    incentives, and $2,000,000 from DOE for alternative fuels
    infrastructure funding.
        California's great San Joaquin Valley is in crisis. Home to 3.3
    million people, its 25,000 square miles may have the most unhealthy air
    in the country. Even Los Angeles, long known as the smog capital of the
    Nation, can boast better air quality by certain standards. While peak
    concentrations of air pollutants are still greater in Los Angeles, for
    the past 4 years, the San Joaquin Valley has exceeded Los Angeles in
    violations of the 8-hour Federal health standard.
        A combination of geography, topography, meteorology, extreme
    population growth, urban sprawl and a NAFTA corridor with two major
    highways that produce 5 million big-rig miles per day driven by diesel
    powered trucks, have collided to produce an air basin which over
    300,000 people, nearly 10 percent of the population, suffers from
    chronic breathing disorders. In Fresno County, at the heart of the San
    Joaquin Valley, more than 16 percent of all children suffer from
    asthma, a rate substantially higher than any other place in California.
    The extreme summertime heat works to create smog even though smog-
    forming gases are less than half the amount in the Los Angeles basin.
    There is no prevailing wind to flush the natural geologic bathtub and,
    as a result, pollutants and particulates stagnate, accumulate and
    create unhealthy air.
        Degradation of human health is not the only consequence of poor
    quality air. Because the 8-county air pollution control district is
    designated as a ``severe'' non-attainment area, a significant number of
    the Valley's businesses are required to obtain permits and comply with
    increasingly burdensome regulations imposed by Federal and State law
    and the Air Pollution Control District, resulting in added cost in
    compliance, reporting and record keeping. At the same time, the area is
    burdened by unemployment rates of nearly 20 percent. Encouraging
    business expansion in or relocation to the San Joaquin Valley to combat
    unemployment is extremely difficult in the face of such regulatory
    burdens.
        In the fall of 2003 the San Joaquin Valley Air Pollution Control
    District Board will decide whether to become the first District in the
    Nation voluntarily to declare itself an ``extreme'' non-attainment
    area. That designation, if made, will defer until 2010 the date for
    attainment of Federal standards of air quality, but will come at a cost
    of imposing permitting on thousands of more businesses and even further
    discouraging business expansion or relocation. Unemployment will
    certainly not be improved.
        The San Joaquin Valley is home to the most productive agricultural
    land in the world. Over 350 crops are produced commercially on 27,000
    farms that encompass more than 5 million irrigated acres. While the
    agricultural industry has made great strides at considerable expense to
    replace old diesel engines and manage fugitive dust and other
    emissions, farming cannot help but contribute to the problem. However,
    it is a $14 billion industry that forms the backbone of the Valley's
    economy.
        Industry alone is not the source of the Valley's poor air.
    Population growth faster than the rest of the State and nearly the rest
    of the Nation, in an area without effective mass transit, where cheap
    land has led to a landscape of suburbia and sprawl, results in
    excessive over-reliance on the automobile. Trucking has increased
    dramatically with the increase in population. Other factors such as
    fireplace burning in the winter, open field agricultural burning
    because of lack of adequate alternatives, and wild fires resulting from
    lack of controlled burning in the nearby foothills and mountains all
    contribute to the problem.
        Despite the challenges listed above, much progress has been made.
    The State has spent nearly $80 million on improvement and compliance
    programs. Local government and private industry have spent over $100
    million on technology and compliance. As specific examples, over one
    half of the diesel operated irrigation pumps used by agriculture have
    been replaced with cleaner engines. The City of Tulare has converted
    its entire fleet of vehicles to natural gas as have several other
    private fleet operators. A $45 million federally financed comprehensive
    study of ozone and particulate matter is nearing completion. As a
    result, the number of 1-hour EPA health standard exceedences has been
    reduced by 40 percent since 1989.
        But much more needs to be done. The District estimates that daily
    emissions must be reduced by 300 tons to achieve attainment. There is
    no single or short-term quick fix. The entire Valley is part of the
    problem and the entire Valley will need to be part of the solution.
        Operation Clean Air is a coalition of business, government, health
    care and environmental groups throughout the 8-county San Joaquin
    Valley Air Pollution Control District and Mariposa County. Its goal is
    to clean the Valley's air and increase its economic prosperity. The
    coalition seeks to catalogue efforts that have produced positive
    effects and identify those strategies that could produce even greater
    effects if supported by sufficient resources. At the heart of its
    efforts will be an array of sustainable, voluntary practices and
    activities that can and will be undertaken by all of the residents of
    the San Joaquin Valley, both public and private, to improve air
    quality.
        This unique public-private partnership has invested considerable
    resources in this project to date, and will continue to do so, but
    Federal funding is both imperative and justified to help address what
    is essentially an unfunded Federal mandate.
        For fiscal year 2004, our Coalition is seeking funding of
    $2,000,000 from the Department of Energy (DOE) for the installation and
    operation of alternative fuels infrastructure throughout the San
    Joaquin Valley Air Basin. The alternative fuels infrastructure will
    allow for the accelerated introduction of alternatively fueled vehicles
    in municipal fleets, public school fleets, and private fleets. The
    widespread use of lower-emitting motor vehicles will provide
    significant improvement to air quality in the San Joaquin Valley while
    furthering the goals of the Department of Energy and the National
    Energy Policy Act. Development of alternative fuel infrastructure will
    augment the low-emission vehicle program by providing much needed
    compressed natural gas (CNG) and liquefied natural gas (CNG) fueling
    facilities.
        For fiscal year 2004, our Coalition is also seeking funding of
    $5,000,000 to provide financial incentives to reduce open field burning
    of residual agricultural materials by utilizing biomass-energy power
    plants to burn this material in a controlled environment. This process
    will result in multiple benefits to the San Joaquin Valley by reducing
    air pollution and producing electrical power from a renewable source.
        Thank you very much your consideration of our requests.
                                     ______

     Letter From the Colorado River Energy Distributors Association (CREDA)
                                        Tempe, Arizona, April 10, 2003.
    The Honorable Pete Domenici,
    Chairman, Appropriations Subcommittee on Energy & Water Development,
            127 Dirksen Senate Office Building, Washington, DC 20510.
        RE: Site Security/Anti-Terrorism Costs
        Dear Chairman Domenici: Please include this letter in the hearing
    record for the fiscal year 2004 Energy and Water Development
    Appropriations bill.
        As you are aware, following the events of September 11, 2001, the
    Federal agencies responsible for providing site security and anti-
    terrorism measures have taken additional steps to ensure the security
    of Federal hydropower and transmission facilities and the security of
    the general public. The facilities comprising the Colorado River
    Storage Project provide a multitude of benefits to millions of
    residents in the western United States. The security of these Federal
    generation and delivery facilities is of national concern.
        In the fiscal year 2003 Energy and Water Development Appropriations
    bill, the House and Senate concurred in report language which says that
    increased security costs in the aftermath of the events of September
    11, 2001 are non-reimbursable expenses and should be funded through
    appropriations. This recognition is consistent with the historic
    treatment of such costs in crises such as Pearl Harbor.
        We understand the President's fiscal year 2004 budget for the U.S.
    Bureau of Reclamation and the Western Area Power Administration
    includes additional funding for such anti-terrorism/site security
    activities. In light of this, the Colorado River Energy Distributors
    Association (CREDA) requests that the Energy and Water Development
    Subcommittee including the following in its fiscal year 2004
    appropriations bill:
        For fiscal year 2004 and each fiscal year thereafter, the increased
    costs of ensuring security of Reclamation generation and Western Area
    Power Administration delivery system facilities in the aftermath of the
    events of September 11, 2001 shall be appropriated, non-reimbursable
    and nonreturnable.
        CREDA is a purchaser of Federal hydropower and transmission
    services produced and transmitted by the facilities of the Colorado
    River Storage Project. Our members serve nearly 3 million consumers in
    six western States. CREDA has passed a resolution advocating that the
    costs of increased security of these facilities should be non-
    reimbursable and provided by appropriated funds. In addition, the
    American Public Power Association (APPA), the National Rural Electric
    Cooperative Association (NRECA) and National Water Resources
    Association (NWRA) also have approved or have pending concurring
    resolutions.
        We appreciate your support of statutory language supporting this
    position.
                Sincerely,
                                                  Leslie James,
                                                    Executive Director.
                                     ______

             Prepared Statement of the Southern States Energy Board
        The Southern States Energy Board (SSEB) is pleased to provide this
    statement for the record to the House of Representatives Appropriations
    Subcommittee on Energy and Water Development as it considers fiscal
    year 2004 funding for the U.S. Department of Energy (DOE), Office of
    Energy Efficiency and Renewable Energy (EERE), and specifically related
    to the biomass/biofuels fiscal year 2004 budget request.
        The Board commends Congress for restoring $3,000,000 to the U.S.
    DOE Regional Biomass Energy Program (RBEP) in the fiscal year 2003
    Omnibus Bill. However, SSEB and other regional governors' organizations
    with existing cooperative agreements to administer RBEP have yet to
    receive this appropriated funding. SSEB urges the Congress to restore
    funding for the U.S. DOE Regional Biomass Energy Program and its
    valuable State-based regional network at $5,000,000 in fiscal year
    2004.
        This line item, which would continue an appropriation that has
    appeared in every Federal budget since fiscal year 1983, is for the
    purpose of promoting economic development by fostering the use of
    biobased products and bioenergy, and takes advantage of and sustains
    existing networks and infrastructure developed throughout the Nation by
    the regional governors' organizations.
        Energy independence is a critical element in the President's Energy
    Policy and can be significantly enhanced by developing viable domestic
    alternative energy sources. Just as the Federal energy policy seeks to
    encourage diverse energy sources, eliminating funding for the RBEP
    greatly diminishes the States' ability to participate in the
    development of biomass energy markets.
        The Regional Biomass Energy Program was created by Congress in 1983
    under the Energy and Water Development Appropriations bills Public Law
    97-88 and Public Law 98-50. The enabling legislation instructed DOE to
    design its national program to work with States on a regional basis,
    taking into account regional biomass resources and energy needs. The
    five regional programs, working with representatives in all 50 States,
    Puerto Rico and the Virgin Islands, and hosted primarily by regional
    governors' organizations (Southern States Energy Board, Coalition of
    Northeastern Governors and the Council of Great Lakes Governors) are
    recognized nationally for their combined experience related to biomass
    technologies and policies.
        SSEB and other regional governors' organizations hosting regional
    biomass energy programs are critical partners of DOE for formulating
    policies and facilitating private sector deployment of advanced energy
    technologies and practices into target markets.
        Beyond the potential economic development benefits, participating
    States gain the opportunity to strengthen and integrate the work of
    energy, agriculture, forestry, environmental and other State agencies.
    Where issues are the same among several States, strategies can be
    developed to address these issues across State borders. Examples
    include the development of similar State legislative actions, working
    with the private sector with multi-State locations, and multi-State
    training and outreach to economize resources.
        The southern States have participated in this strategy through the
    Southeastern Regional Biomass Energy Program (SERBEP) which has
    provided over $5.8 million in project funds since 1992 with a cost-
    share of over $21 million by leveraging State and private funding for
    technology development and deployment. In 1999, SSEB was selected as
    the ``host organization'' for the SERBEP and received funding through a
    5-year cooperative agreement.
        SSEB is an interstate compact organization with enabling
    legislation in each member State, covering the 16 States plus Puerto
    Rico and the U.S. Virgin Islands, all members of the Southern Governors
    Association. To assure broad based representation, SSEB is governed by
    a board composed of the governor and a member of the House and Senate
    from each member State. Over the years of administering the SERBEP,
    SSEB has created awareness and support for bioenergy/biobased products
    in the executive and legislative branches of State government, improved
    the effectiveness of SERBEP activities, provided more formal
    interaction between the States and improved policy development and
    coordination in particular.
        We urge Congress to restore this modest but vital appropriation to
    protect the Federal Government's 20-year investment in RBEP, and to
    continue the promotion of the strong Federal interest in viable and
    growing biobased products and bioenergy. Restoration of the
    appropriation for RBEP places the Federal focus where it belongs, with
    the States.
                                     ______

           Prepared Statement of the American Wind Energy Association
      commitment to r&d a crucial factor in achieving wind energy market
                                   potential
    U.S. Wind Energy Industry Has Shown Significant Growth Over the Last 5
            Years
    Continued Emphasis Needed on Small Wind Systems Used to Power Homes,
            Farms and Small Businesses
        The American Wind Energy Association \1\ (AWEA) appreciates this
    opportunity to provide testimony for the record on the Department of
    Energy's Fiscal 2004 wind energy program budget before the Senate
    Appropriations Subcommittee on Energy and Water Development. AWEA's
    testimony addresses the following:
    ---------------------------------------------------------------------------
        \1\ The American Wind Energy Association, or AWEA, was formed in
    1974. The organization represents virtually every facet of the wind
    industry, including turbine and component manufacturers, project
    developers, utilities, academicians, and interested individuals.
    ---------------------------------------------------------------------------
         request for the department of energy wind program--$55 million
        AWEA requests a funding level of $55 million for the wind energy
    program at the Department of Energy (DOE) to support wind energy
    development at the national, State, and local levels. Working in
    conjunction with the U.S. wind industry, power producers, suppliers,
    industrial consumers and residential users, DOE provides important
    technical support, guidance, information, and limited cost-shared
    funding for efforts to explore and develop wind energy resources.
    Moreover, the research and development (R&D) program at DOE is helping
    to support advanced wind energy research that is attracting support
    from major industrial companies. AWEA would like to commend the DOE
    wind program for its efforts over the past year to involve the industry
    in its program planning process. The department has solicited input
    from AWEA on the direction of its program and been responsive to
    comments received from the industry. AWEA's fiscal year 2004 budget
    testimony is focused on two areas within the wind program:
    Utility-Scale Wind Development
        This cost-shared DOE/industry partnership program has proven to be
    successful and with modest annual appropriations has been helpful in
    significantly lowering the cost of wind power. In fact, over the past
    20 years, the cost has been reduced by over 80 percent. The program is
    aimed at further driving down the cost of wind power to a level fully
    competitive with traditional electric power technologies. An important
    emphasis is on developing wind turbines capable of operating in areas
    with lower wind speeds. This would expand wind development potential by
    20 times as well as allow the placement of turbines closer to existing
    transmission lines.
        An additional important element of R&D is applied research in the
    areas of atmospheric physics and aerodynamics. This research can
    provide knowledge that is essential to achieve the industry's
    objectives of reducing the cost of wind energy. In addition to help
    lower the cost of wind power, R&D support is necessary for
    understanding the integration of wind energy into the Nation's power
    systems and better understanding the long-term wind resource and costs
    of operating and maintaining wind power stations. These activities will
    reduce the perceived risks associated with wind energy developments and
    thus reduce the cost of capital for project development.
        Another activity required to reduce risk is an enhancement of the
    blade and gearbox testing capabilities at the National Wind Technology
    Center. The capabilities of the current facilitates are no longer
    sufficient to test the next generation of wind turbines currently being
    developed and deployed. The existing facilities have been instrumental
    in increasing the reliability of wind turbine blades and gearboxes, and
    thus contributing to the reductions in the cost of energy.
    Small Wind Systems
        More emphasis on DOE's small wind turbine program (machines rated
    at 100 kilowatts or below) will help achieve greater cost reductions
    and increase the availability of this energy option for homes, farms,
    schools, and businesses.
                                    overview
        The U.S. wind industry is poised for significant growth. However,
    important challenges lay ahead. For its part, the wind industry
    continues to work to drive down the cost of wind-generated electricity,
    thereby enhancing the competitiveness of the product to electricity
    providers.
        AWEA appreciates the support the subcommittee has provided to the
    DOE wind program. In fiscal year 2003, the wind program was funded at
    the same level requested by the Administration, $44 million. The fiscal
    year 2004 request by the Administration represents a slight drop from
    the current year budget. We believe that the funding provided by the
    committee should reflect the important work conducted by the wind
    program and respectfully request the funding be increased above the
    request level.
        The wind energy program at the Department of Energy has a strong
    history of success. Over the last 20 years, the cost of wind energy has
    dropped by more than 80 percent, to a level that is close to
    competitive with traditional energy technologies. Cost shared industry/
    government research and development activities at DOE and the National
    Renewable Energy Laboratory (NREL) have played an important role in
    this achievement. Programs such as Wind Powering America have been
    educating interested parties across the country on the benefits of wind
    power.
        Continued investment at DOE in domestic energy alternatives like
    wind power will allow the industry to keep driving down costs and
    improving the efficiency of new wind turbines. Wind energy holds the
    greatest potential of all non-hydro renewables to contribute to our
    energy needs over the next decade.
        Wind energy is positioned to be an important part of the Nation's
    energy mix. Wind can be an important component in protecting against
    volatile electricity rates. The costs of a wind plant are primarily up-
    front capital costs, thus the price for electricity is stable over the
    life of the plant because the fuel, the wind, is free.
        Investing in domestic, inexhaustible renewable energy technologies
    strengthens our national security, provides rural economic development,
    spurs new high-tech jobs, and helps protect the environment. There are
    no downsides to investing in wind and other renewables.
        Finally, we want to stress the importance of the wind energy
    Production Tax Credit (PTC), which provides a 1.5-cent per kilowatt-
    hour credit for electricity produced (the credit is currently 1.8 cents
    adjusted for inflation). A 2-year extension of this tax credit was
    approved with bipartisan support in March 2002 and signed into law by
    the President. The credit is set to expire again on December 31, 2003.
    The wind industry is seeking a full long-term extension of the credit,
    in order to provide for more certainty and stability for the industry.
    Bipartisan legislation to extend the credit has been introduced in both
    the House and Senate.
                         utility-scale wind development
        In 2002, the generating capacity from wind power grew by 10
    percent, with 410 megawatts (MW) of new equipment going into service.
    At year's end, the installed capacity nationwide totaled 4,685 MW
    across 27 States, or enough power to serve about 1.3 million average
    U.S. households.
        By mid-2003, installed wind energy capacity in the U.S. is expected
    to be over of 5,000 MW. Development is planned in a number of States,
    including New Mexico, California, Iowa and Minnesota. This new
    development will help spur rural economic development through new
    construction and manufacturing jobs, lease income for landowners, and
    local and county tax payments.
        Cost shared research and development programs at DOE have played a
    key role in the development of wind energy. There is important work to
    be done, however, to continue the momentum the industry has built. For
    instance, the current generation of wind turbines have successfully
    lowered the cost at the best wind sites (Class 5 & 6). However, in
    order for wind to reach its full potential, the industry must penetrate
    areas with moderate wind speeds (Class 3 & 4). Tapping such areas,
    which are often closer to necessary transmission lines, could increase
    the amount of wind development by a factor of 20.
                     small wind systems (100 kw and below)
        AWEA believes a greater emphasis on small wind turbine research and
    development is needed as the demand for these turbines continues to
    grow. Distributed generation with small customer sited power plants has
    great potential for reducing energy costs, promoting competition in the
    marketplace, and strengthening the Nation's electrical supply network.
        AWEA recognizes that some progress has been made at DOE in the
    small wind turbine program. However, it is vital that additional
    resources be dedicated to programs that will help make small wind
    turbines cost-competitive for homeowners. DOE has significant programs
    for technology development and deployment of other distributed energy
    technologies, but programs for small wind have received little
    attention despite the fact that small wind systems arguably have a
    greater market potential.
        The high up-front costs of small wind systems make it very
    difficult for this technology to gain wide acceptance in the domestic
    market. This would change if DOE had the resources to work with
    America's small wind manufacturers to achieve cost reductions similar
    to those achieved by the large, utility-scale wind industry. In some
    States like California, that provide a State rebate for purchasers,
    small wind turbine manufacturers have experienced a surge in sales,
    demonstrating the public support for cost-effective small wind
    turbines.
    Additional Funding Request: Renewable Energy Production Incentive
            (REPI)--$8 million
        AWEA also advocates for additional funding for the Renewable Energy
    Production Incentive (REPI) program as a separate item within the
    Renewable energy budget. Year-to-year uncertainty regarding funding
    levels for the Renewable Energy Production Incentive (REPI) plays havoc
    with the long-term planning needs of running a municipally owned
    utility. Due to insufficient funds for the program, full payments for
    eligible projects have not been made for a number of years. For this
    reason, AWEA suggests the Congress work with the Department of Energy
    to develop long-range alternatives to annual funding of this program.
        The REPI program, authorized by the Energy Policy Act of 1992,
    encourages municipally owned utilities to invest in renewable energy
    technologies including wind energy systems. REPI permits Department of
    Energy to make direct payments to publicly and cooperatively owned
    utilities at the rate of 1.5 cents per kilowatt-hour for electricity
    generated from wind, solar, geothermal, and biomass projects. Because
    wind energy projects require a 2- to 3-year lead-time for permitting
    and construction, it is very important that stable and predictable
    funding be provided.
                                   conclusion
        Continued investments in wind energy R&D are delivering value for
    taxpayers by developing another domestic energy source that strengthens
    our national security, provides rural economic development, spurs new
    high-tech jobs, and helps protect the environment.
        While the wind industry continues to grow in terms of new
    generation capacity installed, continued Department of Energy wind
    energy R&D is vital to growing this domestic power source. The current
    debates in Congress regarding energy policy have brought to light the
    important role wind and other renewable energy technologies, both
    utility-scale and small-scale, can play in our Nation's energy
    strategy.
        AWEA appreciates the opportunity to provide this testimony to the
    Subcommittee. We would be pleased to answer any questions that may
    arise. Thank you.
                                     ______

          Prepared Statement of the American Society for Microbiology
        The American Society for Microbiology (ASM), the largest single
    life science organization in the world, with more than 42,000 members,
    appreciates the opportunity to provide written testimony on the fiscal
    year 2004 budget for the Department of Energy (DOE) science programs.
        The ASM represents scientists working in academic, medical,
    governmental and industrial institutions worldwide. Microbiological
    research is focused on human health and the environment and is directly
    related to DOE programs involving microbial genomics, climate change,
    bioremediation and basic biological processes important to energy
    sciences.
        The Office of Science supports unique and critical pieces of U.S.
    research in scientific computation, climate change, geophysics,
    genomics, and the life sciences. This research is conducted at both the
    DOE national laboratories and at approximately 250 universities
    nationwide through peer-reviewed, competitive research. The Office of
    Science is also an invaluable contributor to the scientific programs of
    the National Institutes of Health (NIH) and the National Science
    Foundation (NSF). These partnerships bridge the gap between the
    physical sciences, the life sciences and computational sciences,
    allowing science to refine and advance our efforts in deciphering
    genomes and their critical functions. The Office of Science is a leader
    in these efforts and promoting multidisciplinary research that seeks to
    harness the capabilities of microbes and microbial communities to help
    us to produce energy, clean up waste, and sequester carbon from the
    atmosphere. Furthermore, these cross-disciplinary programs contribute
    enormously to the knowledge base and training of the next generation of
    scientists while providing worldwide scientific cooperation in physics,
    chemistry, biology, environmental science, mathematics, and advanced
    computational sciences.
        The Office of Science will play an increasingly important role in
    the Administration's goal of U.S. energy independence in this decade.
    Many DOE scientific research programs share the common goal of
    producing and conserving energy in environmentally responsible ways.
    Programs include basic research projects in microbiology, as well as,
    extensive development of biotechnological systems to produce
    alternative fuels and chemicals, to remediate environmental problems,
    and to reduce wastes and pollution.
        The Administration's proposed budget for fiscal year 2004 requests
    $3.3 billion for the Office of Science, an increase of $5 million over
    fiscal year 2003. The ASM would like to submit the following comments
    and recommendations for funding levels for research in the Biological
    and Environmental Research (BER) and Basic Energy Sciences (BES)
    programs for fiscal year 2004. Federal investment in these programs
    today, will help to ensure fundamental research to find solutions to
    future environmental and energy problems while maintaining U.S.
    scientific leadership worldwide.
                               microbial genomics
        The Administration has requested $10 million for fiscal year 2004,
    which is the same level as in fiscal year 2003. In view of the
    tremendous potential from microbial genomic sequencing, the ASM
    recommends that Congress provide $15 million for fiscal year 2004. In
    1994, the Office of Biological and Environmental Research developed the
    Microbial Genomics Program as a compliment to the Human Genome Program.
    This early leadership in microbial genomics has allowed the program to
    decipher the genomic sequences of many of the non-pathogenic
    microorganisms available today. This information provides clues into
    how we can design biotechnological processes that advance research in a
    number of disciplines and national priorities, such as biogeochemical
    cycles, global warming, and alternative energy research. Fundamental
    microbial research will continue to underpin DOE's research
    capabilities in other BER and BES programs, including: Genomes to Life;
    bioremediation research; and carbon sequestration. DOE has also
    developed, at the Joint Genome Institute (JGI), a highly efficient,
    centralized sequencing facility that is a unique and valuable resource
    for serving the Nation's non-medical microbiological researchers.
        Knowing the complete DNA sequence of a microbe provides important
    keys to the biological capabilities of the organism and is the first
    step in developing strategies to more efficiently detect, counteract,
    use, or reengineer that microbe to address an assortment of national
    issues. The DOE has completed the DNA sequencing of more than 50
    microbes with potential uses in energy, waste cleanup, and carbon
    sequestration. For instance, the JGI has completed the genomic DNA of
    several algae important in the ocean's photosynthesis process and in
    soil bacteria that assimilate carbon dioxide, both important biological
    processes for carbon dioxide capture from the atmosphere.
        The ASM applauds DOE's leadership in recognizing this important
    need in science and endorses expansion of its microbial genome
    sequencing efforts, particularly in using DNA sequencing to learn more
    about the functions and roles of the 99 percent of the microbial world
    that cannot yet be grown in culture.
                            genomes to life program
        The ASM strongly supports the Administration's funding of the
    Genomes to Life (GTL) program at $59 million for fiscal year 2004. The
    GTL program is ushering in a new biological era--the era of systems
    biology, which will allow us to understand entire living organisms and
    their interactions with the environment. This new level of exploration
    (i.e., systems biology) will empower scientists to pursue completely
    new approaches to discovery and spur the development of new products or
    services from microbes and other organisms. With a deeper, genetically
    based understanding of living organisms, the potential to utilize and
    refine their functions will allow us to address many of today's
    challenges in carbon sequestration, energy transformation, and
    environmental clean up. The Genomes to Life program has just begun to
    demonstrate the potential application of microorganisms for energy,
    medicine, agriculture, environment, and national security needs. This
    research will potentially offer new biotechnology solutions to these
    challenges and those of tomorrow. Underlying the potential applications
    of biotechnology for clean energy, mitigating climate change, and
    environmental cleanup is the need for a solid understanding of the
    functions, behaviors and interactions of every biological part (the
    genes and proteins) of a microorganism. If we are to improve the
    productivity of forests, bioremediation agents, biomass crops and
    agricultural systems, it is imperative to understand how these
    biological machines work. This will require a staggering amount of
    expertise across the sciences (e.g., physical and computational), new
    computational capabilities, new tools, and new interdisciplinary
    approaches to genomics research.
        In fiscal year 2004, the GTL program will increase its emphasis on
    DNA sequencing of microbes and microbial communities. This sequencing
    will serve as the core biological data needed to further understand the
    control and function of molecular machines and microbial communities.
    The ASM applauds the programs continued focus on microbial communities
    and notes that this represents the kind of interdisciplinary science
    that DOE has done successfully in the past, making use of advanced
    technologies, specialized facilities, teams of scientists, and
    computational power. The ASM also sees this program as the basis for an
    expanded effort to understand more broadly how genomic information can
    be used to understand life at the cellular level and urges Congress to
    fully support this exciting program.
                            climate change research
        The ASM is pleased to see the Administration's support of Climate
    Change Research continue in its fiscal year 2004 budget. The ASM
    endorses the President's proposed $143 million budget, an increase of
    $6 million over fiscal year 2003. The Society is also supportive of the
    proposed $19 million budget for the Ecological Processes section for
    fiscal year 2004, a $5 million increase over fiscal year 2003.
        In fiscal year 2003, the Administration launched the Climate Change
    Research Initiative (CCRI), to study the potential effects of
    greenhouse gases and aerosol emissions on the climate and the
    environment. The Climate Change Research Subprogram is DOE's
    contribution to the cross-agency CCRI and applies DOE's expertise in
    genomics and computational climate modeling to determine the effects of
    greenhouse emissions on the global climate. The Climate Change Research
    subprogram supports four areas of research: Climate and Hydrology,
    Atmospheric Chemistry and Carbon Cycle, Ecological Processes, and Human
    Interactions. This research is focused on understanding the physical,
    chemical, and biological processes affecting the Earth's atmosphere,
    land, and oceans and how these processes may be changing because of
    greenhouse emissions.
        The Ecological Processes portion of the subprogram is focused on
    understanding and simulating the effects of climate and atmospheric
    changes on the biological structure and functioning of planetary
    ecosystems. Research in 2004, will focus on understanding the responses
    of a simplified terrestrial ecosystem (e.g., higher plants, consumers
    of plant production, and soil microorganisms) to changes in a key
    environmental factor, such as, temperature. This research is critical
    if we are to better understand the changes occurring in our ecosystems
    from increasing levels of atmospheric radiation absorptive gases.
        The ASM urges Congress to support this important research within
    the Office of Science budget. The Climate Change Research subprogram is
    a key component in developing more accurate climate modeling and
    ecosystem data, and promises to yield new technologies to address
    future climate changes.
                              basic energy science
        The Administration's requested funding for the Office of Basic
    Energy Sciences (BES) is $1 billion for fiscal year 2004. This program
    is a principal sponsor of fundamental research for the nation in the
    areas of materials sciences, chemistry, geosciences, and biosciences as
    it relates to energy. Biosciences funds an array of microbiological and
    plant research focused on harvesting and converting energy from
    cellulose and other products of photosynthesis into renewable
    resources.
        The ASM is supportive of DOE's continued emphasis upon biobased
    energy research as a key component of the Nation's energy portfolio. In
    2004, biosciences will continue to focus on recent successes in its
    cellulose biosynthesis program, which is funding research into the
    synthesis of cellulose, the most abundant biomolecule, as a potential
    biofuel. Other microbiological research (e.g., Molecular Mechanisms of
    Natural Solar Energy Conversion, $12 million in fiscal year 2004)
    supported by the program includes fundamental research into the
    characterization of molecular mechanisms involved in the conversion of
    solar energy into biomass, biofuels, bioproducts, and other renewable
    energy resources. Furthermore, the ASM believes continued research into
    energy-rich plants and microbes be a DOE priority as genomic
    technologies have given this research area a tremendous new resource
    for advancing the Agency's bioenergy goals.
        The ASM is also supportive of new activities, such as, the
    Metabolic Regulation of Energy Production program ($19 million for
    fiscal year 2004), which supports the biological advances needed to
    complement the chemical nanoscale program within the Office of Science.
                                 bioremediation
        DOE's bioremediation research is contained in the Natural and
    Accelerated Bioremediation Program (NABIR). The Administration's
    proposed budget for the NABIR program is $24.1 million. The ASM
    supports the Administration's request for bioremediation research.
    However, the ASM believes that greater benefits will be achieved if the
    NABIR program is increased to $30 million.
        In fiscal year 2004, the NABIR program will focus on a number of
    efforts: Biotransformation (microbiology to elucidate the mechanisms of
    biotransformation of metals and radionuclides), Community Dynamics and
    Microbial Ecology (structure and activity of subsurface microbial
    communities), and Biogeochemical Dynamics (the dynamic relationships
    among geochemical, geological, hydrological, and microbial processes).
    Bioremediation scientists are searching for cost-effective technologies
    to improve current remediation methods to clean up DOE's contaminated
    sites. This research has the potential to lead to new discoveries into
    reliable methods of bioremediation of metals and radionuclides in soils
    and groundwater. The NABIR program supports the basic research that is
    needed to understand this technology to more reliably develop the
    practical applications for cost-effective cleanup of pollutants at DOE
    sites. The ASM strongly recommends that additional funding be allocated
    to balance the program elements and pollutants studied as originally
    envisioned when the NABIR Program was designed.
                     new technologies and unique facilities
        New technologies and advanced instrumentation derived from DOE's
    expertise in the physical sciences and engineering have become
    increasingly valuable to biologists. The beam lines and other advanced
    technologies for determining molecular structures of cell components
    are at the heart of current advances to understand cell function and
    have practical applications for new drug design. DOE's advances in high
    throughput, low cost DNA sequencing; protein mass spectrometry, cell
    imaging and computational analyses of biological molecules and
    processes are other unique contributions of DOE to the nation's
    biological research enterprise. Furthermore, DOE has unique field
    research facilities for environmental research important to
    understanding biogeochemical cycles, global change and cost-effective
    environmental restoration. In short, DOE's ability to conduct large-
    scale science projects and draw on its unique capabilities in physics,
    computation and engineering is critical for future biological research.
        The ASM strongly supports the basic science agenda across the
    scientific disciplines and encourages Congress to maintain its
    commitment to the Department of Energy research programs to maintain
    U.S. leadership in science and technology.
                                     ______

                 Prepared Statement of the Sun Grant Initiative
                the national need for bioenergy and bioproducts
        Energy Security.--As readily accessible domestic sources of
    petroleum have waned, the United States has steadily increased its
    reliance on imported oil from other nations. The proportion of imported
    oil increased from about 30 percent of domestic consumption in 1970 to
    about 56 percent in 2000. Evidence that world oil supplies will become
    even more limited in the coming decades suggests that alternative
    sources of energy and industrial chemicals must be developed as soon as
    possible. Bioenergy resources can be further developed in ways that
    complement and augment petroleum energy resources, helping to reduce
    our dependence on imported oils while helping constrain the costs of
    energy for American industries and consumers.
        Farm Security.--Farmers have been experiencing economic hardships
    throughout the 1990's and continue today, primarily because of
    excessive production of core commodity crops. The hardships have flowed
    throughout rural America and a devastating exodus to urban centers has
    resulted. Viable alternatives and diversity are needed in agriculture
    to bolster the Nation's independent farm families. Bioenergy and
    bioproducts produced on American farms represent an opportunity to both
    reduce dependence on imported oil while providing a significant source
    of income to American farmers.
        New Industries.--Imported oil is an important feedstock for
    numerous uses other than energy and transportation fuels. Contemporary
    plastics, synthetic fibers, lubricants, solvents, paints and numerous
    other common products depend on petroleum as a feedstock. In the
    future, agriculture will produce biobased feedstocks for production of
    these products as well as many other non-food uses. Agriculture will
    also be integral to manufacturing pharmaceuticals, cosmetics, building
    materials, biocatalysts, and numerous other biobased products. The
    development of biobased products will complement, augment, and be
    integrated with the petroleum industry.
        Rural Economic Development.--New biobased industries will benefit
    not only agricultural producers but will also stimulate economic
    development in the surrounding rural communities. In many cases,
    transportation logistics and infrastructure requirements will require
    that new biobased industries be physically located in rural
    communities--new capital investments and economic stimulation will stay
    in the rural community! A biobased economy will revitalize rural
    America.
        Environmental Protection.--The use of renewable bioenergy and the
    production of many biobased products will have numerous benefits for
    the environment. The increased use of renewable bioenergy will help
    reduce greenhouse gases and will help U.S. communities and industries
    improve air quality while remaining economically viable and
    competitive. Products that were once ``wastes'' can now become
    resources and ingredients in the development of new bioproducts. In
    turn, bioproducts can be designed to be biodegradable, further reducing
    the ``waste stream'' and reducing the demand for trash disposal land
    fills.
        New Science and Engineering Technologies.--The latest scientific
    and engineering breakthroughs will be brought to bear on the challenge
    of moving to a bio-based economy. For example, genomics,
    nanobiotechology, and new computer modeling technologies will be
    utilized to improve our technical understanding of plant biochemistry,
    to develop new enzymatic processes and new materials for bioenergy
    production and the development of new bioproducts.
                            the sun grant initiative
        Land Grant Universities.--Today, land grant universities serve
    agriculture by implementing research, extension, and educational
    programs to benefit agricultural producers and consumers, to assist
    rural families and communities, and to conserve the world's natural
    resources. Clearly, agriculture will play an important role in
    providing power, fuels, and biobased products for America. Because of
    the unique position land grant universities have in science, service
    and education, it is critical that they are proactively involved in
    creating the biobased economy. Over the past several years, land grant
    universities have been working to develop a new model for harnessing
    the capacities of the distributed agricultural research and education
    system into a national network that can work in ready partnership with
    the Federal agencies to help reach national bioenergy goals, which has
    led to the development of the Sun Grant Initiative.
        The Sun Grant Mission.--The mission of the Sun Grant Initiative is
    to (1) enhance national energy security through development,
    distribution and implementation of biobased energy technologies, (2)
    promote diversification and the economic viability of America's
    agriculture through land grant based research, extension, and education
    programs in renewable energy and biobased products, and (3) promote
    opportunities for biobased economic diversification and the development
    of new biobased industries in rural communities.
        Centers of Excellence and a National Network.--A network of five
    land grant universities are serving as regional Sun Grant Centers of
    Excellence (Figure 1). The universities include South Dakota State
    University, Oklahoma State University, the University of Tennessee-
    Knoxville, Cornell University, and Oregon State University. Federal
    funds will be shared equally among each of the regions. As Federal
    funds become available, up to 25 percent of the funds will be utilized
    at each center to enhance their abilities to develop model research,
    extension, and educational programs on agriculture-based renewable
    energy technologies and biobased industries located in rural
    communities. The balance of the funds in each region will be awarded
    competitively among all land grant universities in the region, drawing
    on the expertise of all land grant universities to address national
    priorities at the regional level.

        These regional programs will embrace the multi-state, multi-
    function, multi-disciplinary integrated approach that is at the heart
    of the land grant method of addressing problems. The centers will
    interface their activities with DOE research laboratories at Oak Ridge,
    TN (ORNL, Oak Ridge National Laboratory) and Golden, CO (NREL, National
    Renewable Energy Laboratory).
    National Priorities
        The Sun Grant Initiative programs will revitalize rural
    communities, enhance the Nation's energy security and improve our soil,
    water, and air. The primary challenges that must be faced include:
      --The emergence of agriculturally based bio-industries that can
            coexist with and complement petroleum based industries.
      --Developing biobased industries that improve the environment and
            protect air, water, soil, and other natural resources.
      --Developing biobased industries that diversify American agriculture
            and complement food production.
      --Developing industries that provide opportunities for the growth and
            prosperity of rural America.
        The transition to agriculturally-based bio-industries will create
    economic opportunities for other sectors of the U.S. economy through
    creation of high-tech companies and jobs. Through the Sun Grant
    Initiative, the United States will continue to be a world leader in
    technology and innovation for future high-tech commerce and trade. We
    will not only produce biomass feedstocks, we will also lead the world
    in the technologies and the intellectual property that makes this
    transition to a biobased economy possible.
    Regional Priorities
        During the development of the Sun Grant Initiative a series of
    regional workshops were held with agricultural, industry and community
    leaders. Priority needs were identified for bioenergy and bioproducts
    projects within each region. The unique structure of the Sun Grant
    Initiative will enable the land grant universities to address national
    issues of concern to the Federal agencies in the context of regional
    and local needs and circumstances.
    relation to the sun grant initiative to federal agency biomass programs
        The Biomass Research and Development Act of 2000 established an
    Interagency Board to coordinate the biomass-related programs within and
    among Federal departments and agencies. It is co-chaired by the
    Departments of Energy and Agriculture. Other member agencies include:
    the Department of Interior, Environmental Protection Agency, National
    Science Foundation, Office of Science and Technology Policy and the
    Office of the Federal Environmental Executive. The Act also established
    an Advisory Committee to advise the Secretaries of Energy and
    Agriculture and the Interagency Board on the future direction of
    biomass research and development investments. The Advisory Committee,
    now in its third year of activity, consists of 31 members from
    industry, academia, non-profit organizations, and the agricultural and
    forestry sectors, who are experts in their respective fields. In
    December of 2002, the Biomass Research and Development Technical
    Advisory Committee released a science ``roadmap'' outlining recommended
    priorities for the development of biomass technologies in the United
    States. In addition, Section 9008 of the Farm Security and Rural
    Development Act of 2002 provided for a reauthorization of the funding
    for the Biomass Research and Development Act of 2000 and provided
    funding to support biomass production. Building on these several
    legislative authorities, the Department of Energy and the Natural
    Resources Conservation Service of the Department of Agriculture are
    collaborating in the development and implementation of a Biomass
    Research and Development Initiative to address the priorities
    identified in the roadmap.
        One of the remaining challenges in developing bioenergy and
    bioproducts technologies is that they have to be developed as a
    complete system to be cost effective and economically viable. Many new
    biobased businesses have failed because they only addressed one part of
    a new biobased economy. In order for farmers to increase production of
    a needed biofuels feedstock materials they need to be assured of a
    steady demand. In order for bio-industries to develop a new product,
    they have to be assured of a steady supply of biobased feedstock
    materials. The rate limiting cost in developing biobased feedstock is
    often the cost of shipment; it may be most cost effective to process
    feedstock within a 50-mile radius of the site where it was grown, which
    in turn requires a distributed network of bioprocesses or generators.
    The generators may not break even unless they are also used to co-
    generate heat or unless they feed energy back into local energy grids.
    The Sun Grant Initiative provides a means for the Department of Energy
    and the Department of Agriculture to access the research and education
    expertise of the land grant university system across the country to
    develop new technologies and education programs. The structure of the
    Sun Grant Initiative will enable the Departments to ``put all the
    pieces'' together to create comprehensive regional scale projects that
    can address multiple real world production needs simultaneously. The
    Sun Grant Initiative complements and completes the mix of legislative
    and funding tools that support biomass research and development.
                            legislative developments
        Legislation to authorize the Sun Grant Initiative was developed in
    2002. The proposed legislative language defines the regional Centers of
    Excellence and the network of collaborating universities, as well as
    the mechanism for apportioning and distributing funds described in this
    testimony. The proposed legislative language will authorize funding for
    the Sun Grant Initiative at the level of $100 million. There is bi-
    partisan support for introducing and passing this language in 2003. It
    is our understanding that there will be communications from leading
    Senate offices to the Committee indicating support for moving this
    initiative forward and initiating start-up funding in fiscal year 2004.
                                funding request
        We request initial start-up funding of $20 million for the Sun
    Grant Initiative in fiscal year 2004. We suggest that funding be
    provided through the Energy Efficiency and Renewable Energy programs of
    the Department of Energy, in order to augment and expand the
    Department's biomass and bioenergy research and development programs.
    In order to facilitate coordination and collaboration with the
    Department of Agriculture, we are also recommending funding of $1
    million be provided in fiscal year 2004 through the USDA's Cooperative
    State Research, Extension and Education Service.
                                     ______

       Prepared Statement of the Health Physics Society (HPS) and Health
                 Physics Program Directors Organization (HPPDO)
        This written testimony for the record for fiscal year 2004 requests
    add-on appropriations to the Department of Energy's Office of Nuclear
    Engineering, Science and Technology (DOE-NE) to address an issue of
    extreme importance to the safety of our Nation's workers, members of
    the public, and our environment.
        The safety of our Nation's workers, members of the public, and our
    environment is in jeopardy because of the projected near-term and long-
    term shortage of sufficient educated radiation safety professionals to
    protect them. Protection of workers, the public, and the environment is
    necessary as we use radiation and nuclear technologies to support our
    Nation's energy, health, and security needs. The national shortage of
    radiation safety professionals is primarily due to the fact that the
    Nation's academic research and education programs responsible for
    radiation safety and health are being terminated. Resolving this
    shortage in national educational infrastructure has become one of the
    highest priorities of the professional organizations responsible for
    the performance and education of radiation safety professionals, i.e.,
    the Health Physics Society (HPS) and the Health Physics Program
    Directors Organization (HPPDO).
        The Committee has expressed strong support for the University
    Reactor Fuel Assistance and Support program's efforts to provide
    fellowships, scholarships, and grants to students enrolled in science
    and engineering programs at U.S. universities, and has expressed
    concern about the ability of the Nation to respond to the growing
    demand for trained experts in nuclear science and technology.
    Accordingly, the Committee has appropriated funds in fiscal year 2002
    (Senate Report 107-039) and fiscal year 2003 (Senate Report 107-220) to
    the DOE-NE for addressing this problem through the University Reactor
    Fuel Assistance and Support line item. Senate authorization committees
    have also recognized the seriousness of this problem and introduced
    provisions to address it through authorization of funds to university
    programs in bills in the 107th Congress such as S.242, S.472 and H.R.4.
        Health Physics is the profession that specializes in radiation
    safety, an integral and necessary distinct discipline within the
    nuclear sciences. A recent workforce study by the Nuclear Energy
    Institute (NEI) has shown that the projected demand for health
    physicists for both the Government and Industry far surpasses the
    current ability of the academic programs to meet these employment
    demands. The fact that this serious problem can potentially impact our
    national cleanup program, our defense needs, and our nuclear power
    industry is documented in the NEI study. The NEI study does not address
    the impact the lack of sufficient qualified radiation safety
    professionals will have on our Nation's health and homeland security
    programs.
        In a recent letter to the HPS, the DOE stated, ``We share your view
    that an anticipated shortfall in the Nation's supply of radiation
    safety professionals could have a deleterious effect on the safety of
    our Nations' workers, the public and the quality of health care.'' This
    view has been reinforced in a recent meeting with DOE-NE Director
    William D. Magwood, IV, in which Director Magwood expressed support for
    our organizations' submittal of testimony to this Committee to
    appropriate a $2 million add-on in fiscal year 2004 (fiscal year 2004)
    to the DOE University Reactor Fuel Assistance and Support line item.
        Following is the testimony prepared by the HPPDO and HPS providing
    details of how an appropriation of approximately $2 million in fiscal
    year 2004 would be used to start to stem the decline of health physics
    university academic programs, and to assist in the public's
    understanding of radiation safety as it is applied to the Nation's
    energy, health, and security policies.
    Requested Funding Levels--$2,067,000 Fiscal Year 2004
        Distribution Categories.--Academic Program Support: HP Graduate
    Fellowship Program, HP Undergraduate Scholarship Program, Health
    Physics Education & Research (HPER) Grants, HP Minority-Majority
    Partnerships. Health Physics Society Programs: HPS Grant to support
    ABET-ASAC Accreditation, HPS Grant to support Science Teacher
    Workshops.
        HP Graduate Fellowships ($780,000 in Fiscal Year 2004).--This
    program will greatly expand the existing NE/HP fellowship program in
    DOE-NE and will replace programs lost from DOE-ES&H in 1999. The
    program will specifically target and recruit students into MS and Ph.D.
    programs at DOE-approved health physics academic programs. A total of
    20 fellows will be targeted for initial 2004-2005 support. In addition
    to tuition and fees, students will receive a stipend set at $20,000 per
    year making the program competitive with the NSF Graduate Fellowship
    Program. All students appointed to the program will be required to
    participate in a practicum at a DOE site at least once during their
    fellowship tenure. Applicants must be either U.S. citizens or permanent
    resident aliens. A proposed DOE-approval list of graduate programs in
    health physics is given in Appendix A.
        HP Undergraduate Scholarships ($64,000 in Fiscal Year 2004).--This
    program will target the recruitment of 20 undergraduate students into
    academic programs offering B.S. degrees in health physics or
    radiological engineering. The award will consist of an annual stipend
    of $3,000. The program is open to students who will become Sophomores,
    Juniors, or Seniors by September 2005. The award is limited for the
    duration of the undergraduate program, typically 36 months for
    Sophomores, 24 months for Juniors and 12 months for Seniors. A
    Scholarship appointment will not exceed 36 months. Applicants must be
    either U.S. citizens or permanent resident aliens. A proposed DOE-
    approved list of undergraduate programs is given in Appendix A.
        Health Physics Education & Research (HPER) Grants ($895,000 in
    Fiscal Year 2004).--These competitive awards will be provided to
    universities to (1) support basic and applied research in health
    physics and radiation protection, (2) assist in the recruitment and
    retention of junior faculty at academic programs in health physics, and
    (3) contribute to the strengthening of the academic community's health
    physics infrastructure. A total of 7 research grants will be initially
    funded in 2004-2005 at $120,000 per award. Applications must be from
    DOE-approved graduate programs in health physics (see Appendix A).
        Health Physics Minority-Majority University Partnerships ($213,000
    in Fiscal Year 2004).--As an extension of the existing MMUP in Nuclear
    Engineering, DOE-NE would sponsor a program that encourages existing
    health physics academic programs to establish partnerships with
    Historically Black Colleges and Universities and other Minority
    Educational Institutions. These partnerships will include new
    articulation agreements between these universities, new agreements with
    DOE facilities for internships and research participation programs, and
    specialized instruction courses designed to introduce the non-
    traditional student to the principles of health physics. This program
    will encourage students from minority institutions to seek advanced
    degrees in health physics through the offering of undergraduate
    scholarships and graduate fellowships. At the proposed funding level it
    is expected that as many as four partnerships would be established.
    Each partnership would be funded at approximately $100,000 a year and
    would be renewable up to 3 years.
        HPS Grant to Support ABET-ASAC Accreditation ($65,000 in Fiscal
    Year 2004)--In 2001, the Health Physics Society was granted status as
    the Cognizant Technical Society for the Health Physics and Radiological
    Sciences within the Accreditation Board for Engineering and Technology
    (ABET). Accreditation criteria are thus in place for health physics
    academic programs to be accredited through ABET's Applied Science
    Accreditation Commission (ASAC). A DOE-NE grant to the Health Physics
    Society is proposed which would support this accreditation effort in
    two areas:
      --ABET-ASAC Matching Grant Program ($50,000 in Fiscal Year 2004).--
            This program would permit academic programs in health physics
            to apply for $5,000 matching grants from the Health Physics
            Society to support their costs for preparation of an
            accreditation self-study packet and for fees associated with
            ABET-ASAC accreditation site visits. It is anticipated that
            this matching grant program will be particularly important for
            smaller programs that seek to be accredited, but have limited
            resources for this effort. A total of 10 awards would be
            available in the 2004-2005 academic year.
      --ABET-ASAC Evaluator Training Program ($15,000 in fiscal year
            2004).--This program would fund the HPS Academic Education
            Committee's Subcommittee on Program Accreditation. A total of
            ten $1,000 travel awards would be available for ABET Evaluators
            to serve as observers during ABET-ASAC accreditation visits to
            HP and other programs as part of their evaluator training. An
            additional $5,000 would be made available to the Subcommittee
            to sponsor workshops on Self-Study preparation and ABET-ASAC
            Evaluator training at annual meetings of the Health Physics
            Society.
        HPS Grant to Support the Science-Teacher Workshop Committee
    ($50,000 in Fiscal Year 2004).--This program would provide a DOE-NE
    grant to the Health Physics Society to support its efforts in material
    development, instructor training, advertisement, and execution of
    Science-Teacher Workshops across the country as organized by regional
    chapters of the Health Physics Society. The HPS Science-Teacher
    Workshop Committee would administer the grant through formal proposals
    from individual HPS Chapters.
     appendix a.--graduate and undergraduate programs in health physics \1\
    ---------------------------------------------------------------------------
        \1\ These programs are currently considered by HPPDO to be
    ``strong'' programs as they are supported by more than a single faculty
    member, have active research programs in radiation protection, have a
    long history of producing graduates, and have been active in Health
    Physics Society committees and academic program and accreditation
    planning.
    ---------------------------------------------------------------------------
    Proposed DOE Approval List for HP Fellowships, HPER Grant Award, and HP
            Scholarships--To Be Replaced with ABET-ASAC List of Programs by
            2006
        Clemson University.--Dept. of Environmental Eng. and Science,
    Clemson, South Carolina. Director: Robert Fjeld, Ph.D.
        Colorado State University.--Dept. of Environmental and Radiological
    Health Sciences, Ft. Collins, Colorado. Director: Thomas Borak, Ph.D.
        Georgia Institute of Technology.--School of Mechanical Engineering,
    Atlanta, Georgia. Director: Nolan Hertel, Ph.D.
        Idaho State University.--Department of Physics, Pocatello, Idaho.
    Director: Richard Brey, Ph.D.
        Oregon State University.--Department of Nuclear Engineering &
    Radiation Health Physics, Corvallis, Oregon. Director: David Hamby,
    Ph.D.
        Texas A&M University.--Department of Nuclear Engineering, College
    Station, Texas. Director: Ian Hamilton, Ph.D.
        University of Florida.--Dept. of Nuclear & Radiological
    Engineering, Gainesville, Florida. Director: Wesley Bolch, Ph.D.
        University of Massachusetts at Lowell.--Department of Physics,
    Lowell, Massachusetts. Director: Clayton French, Ph.D.
        University of Michigan.--Department of Nuclear Engineering &
    Radiological Sciences, Ann Arbor, Michigan. Director: Kim Kearfott,
    Ph.D.
        University of Nevada Las Vegas.--Department of Health Physics, Las
    Vegas, Nevada. Director: Mark Rudin, Ph.D.
        University of Tennessee--Knoxville.--Department of Nuclear
    Engineering, Knoxville, Tennessee. Director: Larry Miller, Ph.D.
                 undergraduate only programs in health physics
    (Proposed DOE Approval List for HP Scholarships--To Be Replaced With
            ABET-ASAC List of Programs by 2006)
        Bloomsburg University.--Department of Physics, Bloomsburg,
    Pennsylvania. Director: Jack Couch, Ph.D.
        Francis Marion University.--Dept. of Physics and Astronomy,
    Florence, South Carolina. Director: Derek Jokisch, Ph.D.
                                     ______

           Prepared Statement of the Navajo Tribal Utility Authority
        In December 2000, Congress enacted Public Law 106-511, 602, the
    ``Navajo Nation Electrification Demonstration Program'' (NNEDP). The
    legislation was modeled on the historic Tennessee Valley Authority
    legislation of the 1930's. Likewise, the goal of the NNEDP is to extend
    electrical power to households on the Navajo Nation which currently
    lack it. In fiscal year 2002 and fiscal year 2003, Congress
    appropriated $3 million and $2.8 million, respectively. For fiscal year
    2004, we are requesting the full $15 million per year authorized in the
    public law. On behalf of the Navajo Tribal Utility Authority (NTUA) and
    the Navajo Nation, our Congressman Tom Udall (D-NM) and Congressman
    Rick Renzi (R-AZ) have submitted the request.
        Created in 1959, NTUA provides the vast Navajo Nation with the
    modern conveniences of electricity, natural gas, water, wastewater
    treatment services, and, recently, photovoltaic services. Currently,
    NTUA serves approximately 31,314 electric customers, about 7,017
    natural gas customers, 26,580 water customers, and 11,760 wastewater
    customers throughout the 25,000-square-mile Navajo Nation. The Navajo
    Nation spreads across northwestern New Mexico, northeastern Arizona,
    and southeastern Utah. It is roughly the size of West Virginia.
        Historically, the Navajo Nation suffers from the lack of access to
    electricity and other basic infrastructure needs. On March 19, 2003,
    during a hearing, the Department of Interior noted to the Senate
    Committee on Indian Affairs that a ``huge portion of the Navajo people
    lack access to any electricity at all.'' We conservatively estimate
    that 18,000 homes throughout the Navajo Nation are still without modern
    utility services.
        To successfully implement the NNEDP, we have developed a 5-year
    strategic plan. In the Construction Phase (Phase One), we focused on
    Navajo households located near existing power lines so that the
    greatest number of new customers possible could be connected to
    electricity with the amount of funding available. In completing Phase
    One, NTUA has connected 505 Navajo Nation households. NTUA did this by
    targeting groups of homes and homes near existing power lines. This
    moved us toward the ultimate goal of NNEDP to ensure that every
    household on the vast Navajo Nation has access to a reliable and
    affordable source of electricity by the year 2006. In completing Phase
    Two (fiscal year 2003), we will spend approximately $2 million for
    electrical line extensions and $1 million for photovoltaic services.
        The impact that NNEDP has had on Navajo families who until now were
    living without electrical power is tremendous. On June 13, 2002, the
    home of Lee and Genevieve Horseson of Tonalea, Arizona--located in the
    rugged, remote country of northeastern Arizona--was the first NNEDP
    home to receive electricity. The moment was unforgettable for the
    Horseson family, NTUA, and the Navajo Nation when the lights lit up.
    What seemed like a distant dream had become an immediate reality for
    the Horseson family. Since then, many families like the Horsesons,
    living in different locations across the Navajo Nation, have celebrated
    being connected with electrical service for the first time.
        In another instance, Mrytle Curley, a single mother of six living
    in Arizona, wrote a letter to NTUA thanking us for choosing her as one
    of the first beneficiaries of the NNEDP. Navajo citizens like Ms.
    Curley once thought that electrical service was an impossible dream
    because they were unable to pay for member extension construction
    costs. Today, each evening, Ms. Curley and her children sit down to eat
    dinner and complete school homework together--in adequate light! Each
    week, as the project unfolds, more and more Navajo families are
    enjoying the quality of life that other Americans take for granted.
        NTUA and the Navajo Nation are committed to successfully
    implementing and completing the NNDEP. We envision that we will connect
    a significant number of Navajo homes throughout New Mexico, Arizona,
    and Utah when we complete the project. Moreover, the electricity
    service will contribute to improving the economic and social well-being
    of Navajo people. Again, we respectfully request the House of
    Representatives Appropriations Subcommittee on Energy and Water fully
    fund the congressionally authorized appropriations of $15 million for
    the Navajo Nation Electrification Demonstration Project. With the
    funding, we will continue to build and upgrade power lines to provide
    electrical service to Navajo Nation households which currently lack
    basic electrical service. True to our motto of Building Together for
    Progress, we are demonstrating that Progress has indeed reached
    hundreds of homes throughout our beloved Navajo Nation.

         Proposed Budget Fiscal Year 2004 Navajo Nation Electrification
                              Demonstration Program
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Member Extensions: NTUA estimates that 950-1000 new          $10,155,202
     customers are candidates for power line extensions
     residing on the Navajo Nation and Eastern Navajo Agency
     for fiscal year 2004. These customers have yet to be
     serviced due to their inability to pay for member
     extension construction costs...........................
    Photovoltaic: NTUA estimates that 152 new customers are        2,291,211
     candidates for PV systems for fiscal year 2004. These
     customers live in areas too remote to economically
     justify construction of an electrical distribution line
     extension. The average cost to for each hybrid PV unit
     and installation is $15,000............................
    Distribution: To adequately meet current and new               1,624,587
     customer electrical load needs, NTUA estimates 34 miles
     of 1-phase to 3-phase line conversion will be needed
     for fiscal year 2004...................................
    Training: NTUA will administer training to staff                  75,000
     involving installation and maintenance of hybrid PV
     units. NTUA will also educate new PV customers on
     proper usage and management of their PV units..........
    Project Administration & Support: To undertake the               854,000
     NNEDP, NTUA needs additional staff: Project Manager,
     Project Coordinator, Inspectors, Office staff,
     Engineering technicians, Archeologist, and ROW agents.
     All will be needed to manage the increased workload
     impacting the organization.
        The scope of work for extending power distribution
     lines includes Project Management, Finance and
     Accounting, Engineering, Construction, Material
     Management, and Customer Service. Some of the specific
     items include site surveys, secondary service wiring
     including the pole, transformer, meters and meter
     loops, engineering documentation, right-of-way
     acquisition, archeologist, and procurement of material
     to build electric distribution lines...................
                                                             ---------------
          TOTAL.............................................      15,000,000
    ------------------------------------------------------------------------

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    American Museum of Natural History, Prepared Statement of the....   472
    American Public Power Association, Prepared Statement of the.....   478
    American Society for Microbiology, Prepared Statement of the.....   488
    American Wind Energy Association, Prepared Statement of the......   485
    Arkansas River Basin Interstate Committee, Prepared Statement of
      the............................................................   376
    Associated Branch Pilots, Port of New Orleans, Prepared Statement
      of the.........................................................   372
    Association of State Dam Safety Officials, Prepared Statement of
      the............................................................   308

    Baker, Kenneth E., Deputy Administrator for Defense Nuclear
      Nonproliferation, National Nuclear Safety Administration,
      Department of Energy...........................................   247
        Statement of.................................................   279
    Beckner, Dr. Everet H., Deputy Administrator for Defense
      Programs, National Nuclear Safety Administration, Department of
      Energy.........................................................   247
        Statement of.................................................   277
    Bennett, Hon. Robert F., U.S. Senator From Utah, Questions
      Submitted by...................................................   236
    Biomass Energy Research Association, Prepared Statement of the...   460
    Board of Levee Commissioners for the Yazoo-Mississippi Delta,
      Prepared Statement of the......................................   348
    Board of Mississippi Levee Commissioners, Prepared Statement of
      the............................................................   341
    Bob Lawrence & Associates, Inc., Prepared Statement of...........   450
    Bond, Hon. Christopher S., U.S. Senator From Missouri, Statement
      of.............................................................    10
    Bowman, Admiral Frank L., Deputy Administrator for Naval
      Reactors, National Nuclear Safety Administration, Department of
      Energy.........................................................   247
        Prepared Statement of........................................   269
        Statement of.................................................   266
    Brazos River Harbor Navigation District, Prepared Statement of
      the............................................................   404
    Brooks, Ambassador Linton F., Under Secretary for Nuclear
      Security, Administrator for National Nuclear Security
      Administration, Department of Energy, Statements of..........247, 251
        Prepared Statement of........................................   254
    Brownlee, Honorable Les, Under Secretary of the United States
      Army and Acting Assistant Secretary of the Army (Civil Works),
      Corps of Engineers--Civil, Department of the Army, Department
      of Defense--Civil, Statements of............................... 1, 14
        Prepared Statement of........................................    15
    Byrd, Hon. Robert C., U.S. Senator From West Virginia, Questions
      Submitted by...................................................    73

    Caddo/Bossier Port Commission, Prepared Statement of the.........   340
    Calaveras County Water District, Prepared Statement of the.......   317
    California Government and Private Sector Coalition for Operation
      Clean Air's (OCA) Sustainable Incentive Program, Prepared
      Statement of the...............................................   482
    Cameron County, Texas, Prepared Statement of.....................   405
    Central Arizona Water Conservation District (CAWCD), Prepared
      Statement of the...............................................   425
    Chambers County-Cedar Bayou Navigation District, Prepared
      Statement of the...............................................   407
    Chu, Margaret S.Y., Director, Office of Civilian Radioactive
      Waste Management, Department of Energy, Statement of...........   205
        Prepared Statement of........................................   208
    City of Flagstaff, Arizona, Prepared Statement of the............   374
    City of Los Angeles Board of Harbor Commissioners, Port of Los
      Angeles, Prepared Statement of the.............................   363
    City of Miami Beach, Florida, Prepared Statement of the..........   410
    City of Newark, New Jersey, Prepared Statement of the............   408
    City of St. Helena, California, Prepared Statement of the........   322
    Cochran, Hon. Thad, U.S. Senator From Mississippi:
        Opening Statement of.........................................     1
        Prepared Statements of.......................................3, 128
        Questions Submitted by.....................................183, 234
        Statement of.................................................   194
    Colorado River Basin Salinity Control Forum, Prepared Statement
      of the.........................................................   428
    Colorado River Energy Distributors Association (CREDA), Letter
      From the.......................................................   484
    Coosa-Alabama River Improvement Association, Prepared Statement
      of the.........................................................   397
    Craig, Hon. Larry, U.S. Senator From Idaho, Statements of........3, 129
    Crescent River Port Pilots' Association, Prepared Statement of
      the............................................................   373
    Crow Creek Sioux Tribe, Prepared Statement of the................   436

    DINAMO, The Association for the Development of Inland Navigation
      in America's Ohio Valley, Prepared Statement of................   302
    Domenici, Hon. Pete V., U.S. Senator From New Mexico:
        Opening Statements of.................................125, 189, 247
        Prepared Statements of.......................................1, 127
        Question(s) Submitted by................65, 110, 169, 228, 242, 283
    Dorgan, Hon. Byron L., U.S. Senator From North Dakota:
        Questions Submitted by......................................82, 120
        Statement of.................................................    12

    Fifth Louisiana Levee District, Prepared Statement of the........   402
    Flowers, Lieutenant General Robert B., Commander and Chief of
      Engineers, Corps of Engineers--Civil, Department of the Army,
      Department of Defense--Civil...................................     1
        Prepared Statement of........................................    29
        Statement of.................................................    27
    Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural
      Water, Prepared Statement of the...............................   430

    Garman, David K., Director, Office of Energy Efficiency and
      Renewable Energy, Department of Energy, Statement of...........   142
        Prepared Statement of........................................   143
    Garrison Diversion Conservancy District, Prepared Statement of
      the............................................................   414
    Green Brook Flood Control Commission, Prepared Statement of the..   411
    Griffin, Major General Robert H., Director of Civil Works, Corps
      of Engineers--Civil, Department of the Army, Department of
      Defense--Civil.................................................     1
        Prepared Statement of........................................    35

    Health Physics Society (HPS) and Health Physics Program Directors
      Organization (HPPDO), Prepared Statement of the................   494
    Hollings, Hon. Ernest F., U.S. Senator From South Carolina,
      Question Submitted by..........................................    82

    Jicarilla Apache Nation, Prepared Statement of the...............   438
    Johnston, J. Ronald, Program Director, CUP Completion Act Office,
      Bureau of Reclamation, Department of the Interior..............    85
        Prepared Statement of........................................   105

    Keys, John W., III, Commissioner, Bureau of Reclamation,
      Department of the Interior.....................................    85
        Prepared Statement of........................................    99
        Statement of.................................................    97

    Lake Charles Harbor and Terminal District, Prepared Statement of
      the............................................................   372
    Little River Drainage District, Letter From the..................   343
    Louisiana Department of Transportation and Development, Prepared
      Statement of the...............................................   352
    Louisiana Governor's Task Force on Maritime Industry, Prepared
      Statement of the...............................................   365
    Magwood, William D., IV, Director, Office of Nuclear Energy,
      Science and Technology, Department of Energy, Statement of.....   152
        Prepared Statement of........................................   154
    McConnell, Hon. Mitch, U.S. Senator From Kentucky, Questions
      Submitted by...................................................   235
    Metropolitan Water District of Southern California, Letter From
      the............................................................   448
    Metropolitan Water Reclamation District of Greater Chicago,
      Prepared Statement of the......................................   315
    Mid-Dakota Project, Prepared Statement of the....................   441
    Midwest Area River Coalition 2000, Prepared Statement of the.....   390
    Mississippi Valley Flood Control Association, Prepared Statement
      of the.........................................................   346
    Moss Landing Harbor District, Monterey Bay, California, Prepared
      Statement of the...............................................   392
    Murray, Hon. Patty, U.S. Senator From Washington:
        Questions Submitted by.....................................188, 236
        Statement of.................................................    11

    Napa County Flood Control and Water Conservation District,
      Prepared Statement of the......................................   319
    National Mining Association, Prepared Statement of the...........   386
    National Urban Agriculture Council, Prepared Statement of the....   422
    Navajo Tribal Utility Authority, Prepared Statement of the.......   497
    North Dakota Rural Water Systems Association, Letter From the....   419
    Nuclear Energy Institute, Prepared Statement of the..............   466

    Orange County, California and the Orange County Flood Control
      District, Prepared Statement of................................   301
    Orbach, Dr. Raymond L., Director, Office of Science, Department
      of Energy, Statements of.....................................125, 131
        Prepared Statement of........................................   133
    Oregon Water Resources Congress, Prepared Statement of the.......   420

    Perkins County Rural Water System, Inc., Prepared Statements of
      the..........................................................398, 444
    Pontchartrain Levee District, Prepared Statement of the..........   400
    Port of Garibaldi, Prepared Statement of the.....................   394
    Port of Greater Baton Rouge, Prepared Statement of the...........   371
    Port of New Orleans, Prepared Statement of the...................   368
    Port of South Louisiana, Prepared Statement of the...............   370

    Raley, Bennett W., Assistant Secretary for Water and Science,
      Bureau of Reclamation, Department of the Interior..............    85
        Prepared Statement of........................................    88
        Summary Statement of.........................................    85
    Red River Valley Association, Prepared Statement of the..........   333
    Reid, Hon. Harry, U.S. Senator From Nevada:
        Prepared Statements of..................................8, 130, 192
        Questions Submitted by.......................69, 116, 184, 244, 297
        Statements of...........................................4, 190, 249
    Riverside County Flood Control and Water Conservation District,
      Prepared Statement of the......................................   313
    Roberson, Jessie Hill, Assistant Secretary, Office of
      Environmental Management, Department of Energy, Statements of189, 196
        Prepared Statement of........................................   198

    Salt River Pima-Maricopa Indian Community and the City of Mesa,
      Arizona, Prepared Statement of the.............................   385
    Santa Clara Valley Water District, San Jose, California, Prepared
      Statement of the...............................................   324
    Seminole Tribe of Florida, Prepared Statement of the.............   311
    Solar Energy Industries Association, Prepared Statement of the...   456
    Southeastern Federal Power Customers, Inc., Prepared Statements
      of...........................................................361, 472
    Southern States Energy Board, Prepared Statement of the..........   484
    St. Francis Levee District of Arkansas, Prepared Statement of....   350
    State of Louisiana Red River Waterway Commission, Prepared
      Statement of the...............................................   339
    Steamship Association of Louisiana, Prepared Statement of the....   369
    Stevens, Hon. Ted, U.S. Senator From Alaska, Statement of........    12
    Sun Grant Initiative, Prepared Statement of the..................   491

    The American Chemical Society, Prepared Statement of.............   470
    The Nature Conservancy, Prepared Statement of....................   359
    Trezise, John, Director of Budget, Office of Budget, Bureau of
      Reclamation, Department of the Interior........................    85
    Tumalo Irrigation District, Letter From the......................   428

    University Corporation for Atmospheric Research, Prepared
      Statement of
      the............................................................   465
    University of Medicine and Dentistry of New Jersey, Prepared
      Statement of the...............................................   475
    University of Florida, Prepared Statement of the.................   480
    University of Michigan, Prepared Statement of the................   480
    University of New Mexico, Prepared Statement of the..............   480
    University of Tennessee, Prepared Statement of the...............   480
    University of Texas, Prepared Statement of the...................   480
    Upper Mississippi River Basin Association, Prepared Statement of
      the............................................................   356

    Volusia County, Florida, Prepared Statement of...................   309

    Wyoming Water Association, Letter From the.......................   435

                                 SUBJECT INDEX

                                  ----------

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

                                                                       Page
    Activities Under the:
        Construction, General Appropriation..........................    40
        Flood Control and Coastal Emergencies Appropriation..........    52
        Formerly Utilized Sites Remedial Action Program (FUSRAP).....    53
        General Expenses Appropriation...............................    53
        General Investigations Appropriation.........................    36
        Operation and Maintenance, General (O&M) Appropriation.......    42
    Additional Committee Questions...................................    65
    Alamogordo Flood Control.........................................    69
    Appropriation Accounts...........................................    18
    Army:
        Civil Works Program for Fiscal Year 2004.....................    15
        Recommendation...............................................    71
    Bluestone Dam Safety Project.....................................    76
    Civil Works:
        Budget Less Than Previous Years Appropriations...............    70
        Contribution to National Defense.............................    69
        Program:
            Backlogs.................................................    30
            Transformation...........................................    32
        Value to the National Economy................................    70
    Commodity Flow Through Corps Built Harbors.......................    72
    Constraining Corps Construction..................................    65
    Deteriorating Infrastructure--Economic Impacts...................    73
    Devils Lake, North Dakota........................................    82
    Economic Security Requirements...................................    70
    Emergency Supplemental...........................................    69
    Environmental Projects...........................................    73
    Future Water Challenges..........................................    31
    Grand Forks, North Dakota--East Grand Forks, Minnesota...........    83
    Greenbrier River Basin Flood Control.............................    77
    Historic Spending for Infrastructure Maintenance.................    73
    Homeland Security................................................    81
    Inland Waterway and Harbor Maintenance Trust Funds...............    67
    Little Kanawha River Feasibility Study...........................    79
    London Locks Rehabilitation......................................    75
    Lower Mud River..................................................    78
    Marmet Locks Replacement.........................................    74
    Minimizing Vulnerability to Terrorist Threat.....................    72
    National Water Policy............................................    70
    Need For A More Robust Business Management System................    32
    Operations and Maintenance.......................................    79
    Plant Placement and Improvement Program..........................    54
    Power Marketing Administrations (PMA's) Direct Spending Proposal.    68
    Preconstruction Engineering and Design...........................    70
    Program Highlights...............................................    15
    Proposal to Use Inland Waterways Trust Fund for Operations and
      Maintenance of Corps Inland Waterways Infrastructure...........    80
    Proposed Studies and Management Initiatives......................    17
    Relationship to National Defense.................................    71
    Robert C. Byrd Locks and Dam.....................................    79
    Summary of Fiscal Year 2004 Program Budget.......................    29
    Support for Others...............................................    54
    Terrorist Threat.................................................    72
    Transformation of the Corps......................................    66
    West Virginia:
        Flood Recovery...............................................    73
        Tug Fork Flood Protection Projects...........................    77
    Winfield Locks and Dam, West Virginia............................    79

                              DEPARTMENT OF ENERGY

                     National Nuclear Safety Administration

    Additional Committee Questions...................................   283
    Budget Summary Tables............................................   255
    Facilities and Infrastructure Initiative.........................   288
    Fiscal Year 2004 Department of Energy Budget Request.............   272
    Management Issues................................................   264
    Materials Protection in Russia...................................   292
    Modern Pit Facility..............................................   287
    MPC&A Outside of the Former Soviet Union.........................   293
    NASA's Nuclear Systems Initiative................................   295
    Naval:
        Reactor Labs.................................................   296
        Reactors.....................................................   262
            Fiscal Year 2004 Department of Energy Budget Detail......   274
    Nevada Test Site.................................................   298
    Nonproliferation:
        Budget.......................................................   291
        Programs.....................................................   299
        Reducing the Global Nuclear Danger...........................   260
    Nuclear:
        Forces and the Nuclear Posture Review........................   256
        Power--Today and in the Future...............................   270
        Security.....................................................   297
        Weapons Stockpile............................................   299
    Office of the Administrator......................................   264
    Overall Budget for Stockpile Stewardship.........................   284
    Performance Measurements, Goals, and Accomplishments.............   276
    Pit Production...................................................   285
    President's Management Agenda....................................   276
    Program Infrastructure and Administrative Requirements...........   275
    Relationship to Department of Homeland Security..................   263
    Role of NNSA Labs in Department of Homeland Security.............   295
    Russian:
        Plutonium Disposition Program................................   293
        Transition Initiatives.......................................   294
    Safeguards and Security:
        Funding......................................................   283
        Throughout the Complex.......................................   263
    Secure Transportation............................................   260
    Supercomputing...................................................   285
    Tritium..........................................................   284
    TTC--Right Core at the Right Time................................   271
    Weapons Activities--Stockpile Stewardship........................   257

                Office of Civilian Radioactive Waste Management

    Additional Committee Questions...................................   228
    Cost Reduction and System Enhancement Through Science and
      Technology.....................................................   211
    Fiscal Year:
        2002 Accomplishments.........................................   209
        2003 On-going Activities.....................................   209
        2004 Key Activities..........................................   210
    Legacy Management at Yucca Mountain..............................   245
    Modes of Transportation..........................................   242
    National Transportation and Waste Acceptance Program.............   212
    Nevada Stakeholders Support......................................   215
    Program:
        Direction....................................................   212
        Management and Integration.................................210, 212
    Questions Submitted to the Office of Civilian Radioactive Waste
      Management.....................................................   242
    Shipment Casks...................................................   243
    Stakeholder Involvement..........................................   244
    The 2010 Objective...............................................   208
    The Fiscal Year 2004 Budget Request..............................   208
    Transportation...................................................   242
        Plan for Yucca Mountain......................................   214
        Planning Process.............................................   244
    Yucca Mountain...................................................   244
        Funding:
            Issues...................................................   223
            Level....................................................   242
        License Application Challenges...............................   213

                Office of Energy Efficiency and Renewable Energy

    Additional Committee Questions...................................   169
    Advanced:
        Computing....................................................   170
        Fuel Cycle Initiative........................................   177
        Nuclear Medicine Initiative..................................   177
    Biomass R&D......................................................   181
    Cost of Depleted Tails Disposal..................................   180
    Cuts to NERI and NEPO............................................   178
    Demonstration Projects...........................................   182
    Diagnostic and Instrumentation Laboratory (DIAL).................   183
    Energy Efficiency and Renewable Energy...........................   186
    Fiscal Year 2004 Energy and Water Development Budget Request.....   145
    Funding of Science Programs......................................   171
    Future Nuclear Energy Budget Requirements........................   174
    Genomes to Life and Other Funding Shortfalls.....................   171
    Global Climate Change Research...................................   173
    High Temperature Superconductivity Center........................   182
    Hydrogen.......................................................162, 180
    International Thermonuclear Experimental Reactor Project Within
      Fusion.........................................................   169
    LES..............................................................   179
    Low Dose Radiation Research......................................   172
    Nanoscale Research...............................................   171
    NASA's Nuclear Systems Initiative................................   176
    Nuclear:
        Hydrogen Initiative..........................................   175
        Power 2010 Initiative........................................   175
    Other Renewables.................................................   163
    Science........................................................184, 188
        Education....................................................   171
        In an Underground Laboratory.................................   173
        Lab Infrastructure...........................................   174
    The President's Hydrogen Fuel Initiative.........................   144
    University Reactor Fuel Assistance and Support...................   178
    Uranium-233......................................................   179

                       Office of Environmental Management

    A Year of Transformation.........................................   199
    Additional Committee Questions...................................   228
    Advanced Vitrification System (AVS) and Radioactive Isolation
      Consortium (RIC)...............................................   195
    Clean-up Situation at Los Alamos.................................   231
    Completion of Clean-up at Sandia.................................   230
    Environmental Management's Future Years Budget Profile...........   216
    Future Budgets...................................................   229
    Idaho:
        Clean-Up.....................................................   222
        Removal of Buried Waste......................................   230
    Los Alamos Accelerated Clean-Up Plan.............................   220
    Major Activities to be Completed by 2008 as Listed in the
      Performance Management Plans (PMPs)............................   217
    New Mexico Environmental Department Proposed Rulemaking..........   224
    Post Clean-Up Employment.........................................   226
    Privately Funded:
        Technologies.................................................   227
        Technology for EM............................................   234
    Questions Submitted to the Office of Environmental Management....   228
    Rocky Flats Model................................................   228
    Safeguards and Security..........................................   229
        Costs........................................................   225
    Science and Technology:
        Budget.......................................................   232
        Development Investments......................................   221
        Funding......................................................   224
    The Fiscal Year 2004 Budget Request..............................   202
    Title X of the Energy Policy Act of 1992.........................   232
    Waste Management Education:
        And Research Consortium......................................   230
        Research Program.............................................   221

                Office of Nuclear Energy, Science and Technology

    Additional Committee Questions...................................   169
    Advanced:
        Computing....................................................   170
        Fuel Cycle Initiative.................................152, 155, 177
        Nuclear Medicine Initiative..................................   177
    Biomass R&D......................................................   181
    Cost of Depleted Tails Disposal..................................   180
    Cuts to NERI and NEPO............................................   178
    Demonstration Projects...........................................   182
    Diagnostic and Instrumentation Laboratory (DIAL).................   183
    Domestic Enrichment..............................................   169
    Energy Efficiency and Renewable Energy...........................   186
    Funding of Science Programs......................................   171
    Future Nuclear Energy Budget Requirements........................   174
    Generation IV Nuclear Energy.....................................   168
        Systems....................................................153, 155
    Genomes to Life and Other Funding Shortfalls.....................   171
    Global Climate Change Research...................................   173
    High Temperature Superconductivity Center........................   182
    Hydrogen.........................................................   180
    INEEL--DOE's Command Center for Nuclear R&D......................   157
    International Thermonuclear Experimental Reactor Project Within
      Fusion.........................................................   169
    LES..............................................................   179
    Low Dose Radiation Research......................................   172
    Nanoscale Research...............................................   171
    NASA's Nuclear Systems Initiative................................   176
    Nuclear Hydrogen Initiative...............................153, 155, 175
    Nuclear Power 2010.............................................153, 156
        Initiative...................................................   175
    Radiological Facilities Management...............................   157
    Science........................................................184, 188
        Education....................................................   171
        In an Underground Laboratory.................................   173
        Lab Infrastructure...........................................   174
    University Reactor Fuel Assistance and Support.................156, 178
    Uranium-233......................................................   179

                               Office of Science

    Accomplishments and Awards.......................................   165
    Additional Committee Questions...................................   169
    Advanced:
        Computing....................................................   170
        Fuel Cycle Initiative........................................   177
        Nuclear Medicine Initiative..................................   177
        Scientific Computing Research................................   136
    Basic:
        Energy Sciences..............................................   137
        Research with Historic Results...............................   165
    Biological and Environmental Research............................   137
    Biomass R&D......................................................   181
    Computing for Science's Sake.....................................   166
    Cost of Depleted Tails Disposal..................................   180
    Cuts to NERI and NEPO............................................   178
    Demonstration Projects...........................................   182
    Diagnostic and Instrumentation Laboratory (DIAL).................   183
    Enabling World-Class R&D.........................................   167
    Enhancing National Security......................................   167
    Energy Efficiency and Renewable Energy...........................   186
    Expanding the Frontiers of Discovery.............................   166
    Fiscal Year 2004 Science Priorities..............................   135
    Funding of Science Programs......................................   171
    Fusion Energy Sciences...........................................   138
    Future Nuclear Energy Budget Requirements........................   174
    Genomes to Life and Other Funding Shortfalls.....................   171
    Global Climate Change Research...................................   173
    Helping to Develop the Internet..................................   165
    High:
        Energy Physics...............................................   138
        Temperature Superconductivity Center.........................   182
    Hydrogen.........................................................   180
    Improving:
        Energy Security..............................................   167
        The Science of Climate Change Research.......................   166
    International Thermonuclear Experimental Reactor Project Within
      Fusion.........................................................   169
    LES..............................................................   179
    Low Dose Radiation Research......................................   172
        Program......................................................   159
    Low-Level Radiation..............................................   158
    Medical Imaging..................................................   167
    Micromachining...................................................   161
    Nanoscale Research...............................................   171
    Nanosciences.....................................................   160
    NASA's Nuclear Systems Initiative................................   176
    Nuclear:
        Hydrogen Initiative..........................................   175
        Physics......................................................   139
        Power 2010 Initiative........................................   175
    Pioneering the Human Genome Project..............................   166
    Restoring Sight to the Blind.....................................   167
    Safeguards and Security..........................................   140
    Science........................................................184, 188
        Accomplishments..............................................   135
        Achievements.................................................   164
        Education....................................................   171
        In an Underground Laboratory.................................   173
        Laboratories Infrastructure................................140, 174
        Program Direction............................................   141
        Programs.....................................................   136
    University Reactor Fuel Assistance and Support...................   178
    Uranium-233......................................................   179
    Workforce Development............................................   140

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    Additional Committee Questions...................................   110
    Animas-La Plata..................................................   114
    Budget Highlights................................................    98
    Bureau of Reclamation............................................    89
    California:
        Bay-Delta....................................................   118
            Restoration..............................................   103
    Central Utah Project.............................................   108
        Completion Act...............................................    90
    Central Valley Project Restoration Fund..........................   103
    Conservation Grants..............................................    92
    Conserving Wildlife and Fisheries................................    92
    Cooperative Conservation Initiative..............................    92
    Demonstrated Commitment and Accomplishments......................   100
    Departmental Budget Overview.....................................    89
    Desalination...................................................119, 120
    Drought:
        Assistance.................................................115, 124
        Emergency Assistance Program Weather Modification............   116
    Energy and Water Development Act.................................   117
    Fiscal Year:
        2002 Accomplishments Highlights and Future Planned Activities   104
        2004 Planned Activities......................................   105
    Flaming Gorge EIS................................................   109
    Helping to Meet the Nation's Energy Needs........................    94
    Indian Education.................................................    95
    Interior's Trust Responsibility..................................   122
    Law Enforcement and Security.....................................    96
    Loan Program.....................................................   103
    Middle Rio Grande Levees.........................................   112
    Ongoing Projects.................................................   116
    Other Partnerships...............................................    93
    Performance Assessment Rating Tool (PART)......................103, 121
    Policy and Administration........................................   103
    President's Management Agenda....................................   104
    Preventing Water Management Crisis Monies........................   107
    Reclamation's Core Mission.......................................   123
    Recreation.......................................................    95
    Red River Valley.................................................   123
    Rural Water Legislation..........................................   121
    Salt Cedar on the Pecos River....................................   113
    Santa Fe Wells...................................................   114
    Science..........................................................    96
        And Technology Budget........................................   124
    Section 208......................................................   114
    Security Issues..................................................   109
    Silvery Minnow on the Rio Grande.................................   110
    Specific Project Requests........................................    87
    Sumner Peck.....................................................88, 120
    Taking Care of Parks.............................................    95
    Title XVI--Water Reclamation and Reuse....................117, 119, 120
    Trust Programs...................................................    90
    Underfinancing...................................................   122
    Water:
        And Related Resources........................................   100
        Initiative...................................................    86
    Western:
        Area Power Administration....................................   118
        Water Initiative.................................102, 115, 116, 120
    Wildland Fire and Healthy Forests...............................93, 106

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