[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 56360 lock and a 110600 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 110800 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 1101,200 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 600100 and auxiliary locks of 36056. The main 
chambers are one-half the size of the standard chamber (1,200110) on 
the Ohio River and the auxiliary locks are one-fourth the standard 
auxiliary locks (600100). 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 12125 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 ($42,391.2048.5 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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